MISCELLANEOUS UK SOURCE INCOMEThe sched D, case III charge covers interest, annuities or other annual payments; discounts; and income from securities that pay interest payable out of the public revenue.

Such income is chargeable on a fiscal-year basis, the only exception being partnership income dealt with in the section on investment income in [1996] Gazette, 12 June, 24 and income falling within the transitional provisions.

The fiscal-year basis applies to new sources of income arising after 6 April 1994, and for existing sources from 6 April 1997.

The transitional year is 1996/97, with the assessment based on half of the aggregate income arising in 1995/96 and 1996/97.

If the source ceases prior to 6 April 1998, the transitional provisions do not apply, the old rules applying throughout.

Moreover, if the 1995/96 assessment is already on the fiscal-year basis, the assessment for 1996/97 will likewise be on an actual rather than averaging basis.SCHEDULE D, CASE VICase VI is the sweep-up charge which taxes any annual profits or gains not falling under any other head.

Again, the charge is on the profits or gains arising in the fiscal year.

There are no statutory transitional provisions.

In those cases where certain income has been assessed on a non-statutory preceding-year basis, the sched D, case I transitional provisions will in practice be applied in 1996/97.DIVIDENDSThere is no change to the basis of assessment of dividends, which are taxable by reference to the year of receipt.OVERSEAS INCOMEThe current, fiscal-year, basis generally applies to income from foreign securities (sched D, case IV) and income from foreign possessions (schedD, case V) from 6 April 1994 for new sources, and from 6 April 1997 for sources in existence before that date.

Income from a trade or profession carried on, managed and controlled abroad falls within schedule D, case V.

This is most likely to apply to a UK resident partner in an overseas partnership.

The sched D, cases I and II basis periods set out in the section about investment income in the previous article on provisions for partnership (see [1996] Gazette, 12 June, 24) then apply instead of the actual fiscal-year basis.

The provisions relating to opening years, overlaps, changes of accounting date, cessation and overlap relief will then also apply.TRANSITIONAL PROVISIONSFor foreign income first arising prior to 6 April 1 994, 1996/97 is the transitional year, with the assessment normally on half of the aggregate income arising in 1995/96 and 1996/97.

In the case of non-domiciled individuals taxed on a remittance basis, the 1996/97 charge is on half the remittances in those two years.

If 1995/96 was actually assessed on a fiscal-year basis, these averaging provisions do not apply for 1996/97.

If the source ceases prior to 6 April 1998 the old rules apply.INCOME FROM LET PROPERTY OVERSEASIncome from let property overseas is chargeable to tax under sched D, case V.

Under the new system income is to be determined under the new sched A rules set out in a previous article (see [1996] Gazette, 19 June, 31).

There are similar phasing in and transitional rules.

The favourable 'quasi-trading' treatment accorded to UK furnished holiday lettings described in the section on furnished holiday letting in the previous article (see [1996] Gazette, 19 June, 31is not given to overseas lettings.