Commentary on Sections Structure of Chapters Overview Section 687: Charge to tax on income not otherwise charged
2635.This section is based on section 18 of ICTA. Schedule D Cases IV and V charge tax in respect of income, whether from securities or possessions out of the United Kingdom. Schedule D Case VI charges tax in respect of annual profits or gains. The scope of all three cases is derived from section 18(1) of ICTA, which refers to “annual profits or gains”. Case law does not indicate a difference, in the context of section 18 of ICTA, in the meaning of “annual profits and gains” and “income”. The choice of term appears to be dictated (although not consistently) by the degree to which a calculation of profit or loss is relevant to the calculation of the income charged.
2636.The section uses income rather than (annual) profits or gains. There is nothing known which is “income” within the usual meaning of the term and therefore caught by this section but which would not be caught under Schedule D Cases V or VI.
2637.Subsection (2) ensures that section 683 (charge to tax on annual payments not otherwise charged) has the exclusive right to charge any annual payments not falling within any other charge.
2638.Subsection (3) protects an exemption, whether provided by Part 6 of this Act or other legislation.
2639.Subsection (5) lists some exemptions which apply particularly to this charge. Other exemptions may (exceptionally) apply: for example, see section 771 of this Act (relevant foreign income of consular officers and employees).