Annex 1: Minor changes in the law made by the Act: Change 14: Requiring an apportionment to be just and reasonable: sections 61, 65, 78, 93, 289, 294, 316, 471, 472, 645, 719 and 722
This change requires any apportionment that is not required by the source legislation to be made 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, the apportionment 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, or there are no requirements. In new tax legislation it is now the practice to require an apportionment to be just and reasonable. For example, before it was replaced by ITEPA, section 140B(4) of ICTA (inserted by FA 1998) required a just and reasonable apportionment to be made of any consideration given partly in respect of one thing and partly in respect of another. There is no reason why an apportionment should not be on a just and reasonable basis. And it is desirable that all apportionments should be made on the same basis.
Accordingly, where an apportionment under legislation rewritten in this Act is not required to be made on a just and reasonable basis, the rewritten provision requires the apportionment to be made on a just and reasonable basis. The changes are as follows:
	section 87(3) of ICTA (apportionment of deemed rent attributable to part of land not occupied for the purposes of a trade, profession or vocation required to be just) (see section 61(5));
	section 87(5) of ICTA, which applies section 37(6) of ICTA (amount chargeable on the superior interest to be proportionately adjusted between parts of premises; no requirements as to the basis on which the adjustment is to be made) (see section 65(6));
	section 579(5) of ICTA (apportionment of a redundancy payment where the employee is employed in different capacities; no requirements as to the basis on which the apportionment is to be made) (see section 78(2));
	sections 80(4) and (8) and 81(5) of ICTA (apportionment of expenses between foreign trades required to be made on a reasonable basis) (see section 93(2), (3) and (5));
	section 37(3) of ICTA (apportionment of appropriate fraction of the amount chargeable on the superior interest attributable to a part of premises required to be just) (see section 289(3));
	section 37(6) of ICTA (amount chargeable on the superior interest to be proportionately adjusted between parts of premises; no requirements as to the basis on which the adjustment is to be made) (see section 294(6));
	section 30(2)(a) of ICTA (apportionment of deemed payment in respect of expenditure on sea walls, as may be just) (see section 316(2));
	section 547A(12) of ICTA (non-fractional interest in the rights conferred by a policy or contract treated as if it were such a share in the rights as may justly and reasonably be regarded as representing the interest) (see section 471(7));
	section 547A(7) of ICTA (apportionment of any property that represents property provided for the purpose of a trust and other property required to be just) (see section 472(4));
	section 660E(5) of ICTA (apportionment of any property that represents both property provided by the settlor and other property required to be just) (see section 645(1));
	section 656(3) of ICTA (in the case of certain purchased life annuities, the proportion which the capital element in any annuity payment bears to the total amount of the payment is in certain circumstances to be such as may be just, having regard to certain factors) (see section 719(8)); and
	section 656(4) of ICTA (apportionment of consideration given in connection with the grant of an annuity required to be just) (see section 722(3) and (4)).
This change makes minor amendments to a number of existing rules, but is expected to have no practical effect as it is in line with current practice.