(1) Chapter 4 of Part 27 of the Principal Act is amended -

(a) in section 747D by substituting the following for paragraph (b):

"(b) where the person is a company and the payment is not taken into account as a receipt of a trade carried on by the company, the income represented by the payment shall be charged to tax under Case III of Schedule D.",

and

(b) in section 747E by substituting the following for subsection (1):

"(1) Where on or after 1 January 2001 a person who has a material interest in an offshore fund, disposes of an interest in the offshore fund and the disposal gives rise to a gain computed in accordance with subsection (2) then, notwithstanding sections 745 and 747, where the gain is not taken into account in computing the profits or gains of a trade carried on by a company, the amount of that gain shall -

(a) be treated as an amount of income chargeable to tax under Case IV of Schedule D, and

(b) where the person is not a company, and the person has correctly included details of the disposal in a return made by the person, the rate of income tax to be charged on that income shall, notwithstanding section 15, be the rate determined by the formula -

(S + 3) per cent,

where S is the standard rate per cent.".