Annex 1: Minor changes in the law Change 33: Requiring an apportionment to be just and reasonable: sections 479, 599, 875, 880, 952, 956 and 994
This change requires certain apportionments that are not required by the source legislation to bemade on a just and reasonable basis to be made on such a basis.
In some cases where there is an apportionment under legislation rewritten in this Act, theapportionment is required by the source legislation to be made on a just and reasonable basis.In other cases, it is required to be made only on a just basis or only on a reasonable basis, orthere are no requirements. In new tax legislation it is now the practice to require anapportionment to be just and reasonable. For example, before it was repealed by ITEPA,section 140B(4) of ICTA (inserted by FA 1998) required a just and reasonable apportionmentto be made of any consideration given partly in respect of one thing and partly in respect ofanother. There is no reason why an apportionment should not be on a just and reasonablebasis. And it is desirable that all apportionments should be made on the same basis.
On the other hand, section 784(4) of ICTA provides that “the amount to be deducted … shall be such proportion of the capital expenditure which is still unallowed as is reasonable” (rather than such proportion as is just and reasonable).
If an apportionment under legislation rewritten in this Act is not required tobe made on a just and reasonable basis, the rewritten provision requires the apportionment tobe made on a just and reasonable basis. The changes are as follows.
	Sections 505(1B) and 784(4) of ICTA and section 120(6) of FA 2006 require apportionments (or a “proportion”) to be reasonable. Sections 479, 875(5)(a) and 599 respectively require those things to be just as well as reasonable.
	Sections 343(9), 343ZA(7), 518(9) and 783(8) of ICTA require apportionments to be just. Sections 952, 956, 994 and 880 respectively require apportionments to be reasonable as well as just.
The same change has been made in previous rewrite Acts to provide a uniform expression of the basis on which apportionments are to be made.
This change makes minor amendments to a number of existing rules, but is expected tohave no practical effect as it is in line with generally accepted practice.