(1) Schedule 24 to the Principal Act is amended -

(a) in paragraph 5 by inserting the following after subparagraph (3):

"(4) Where Chapter 2A of Part 15 applies to a person for a tax year, the specified rate shall be ascertained by dividing the income tax payable by that person for that year in accordance with section 485E by the amount of the individual's adjusted income, within the meaning of section 485C, for that year.",

(b) in paragraph 7 -

(i) in subparagraph (3) by substituting the following for clause (c):

"(c) notwithstanding anything in clauses (a) and (b), where any part of the foreign tax in respect of the income (including any foreign tax which under clause (b) is to be treated as increasing the amount of the income) cannot be allowed as a credit against either income tax or corporation tax, the amount of the income shall be treated as reduced by that part of that foreign tax, but, for the purposes of corporation tax, the amount by which the income is treated as reduced by that part of the foreign tax shall not exceed the amount of income which would be the amount referred to in paragraph 4 as 'the relevant income', taking account of the provisions of subparagraphs (2) and (2A) of that paragraph.",