Taxes Consolidation Act 1997 section 12

The charge to income tax

Section 12 provides that income tax is charged on all income (described as property, profits or gains) under four categories known as Schedules: Schedule C (section 17), Schedule D (section 18), Schedule E (section 19), and Schedule F (section 20).

• Income tax is charged on all property, profits or gains falling within four Schedules (C, D, E and F), each governed by a specific section of the Act.
• Each Schedule deals with a different type or source of income, and the rules applicable to that Schedule determine how the income is taxed.
• The Schedule system dates back to 1799 when income tax was first introduced in Great Britain by William Pitt, originally as a temporary wartime measure at a rate of 10% on incomes over £60 per year.
• The Schedules are based on the concept that a taxpayer must have a "source" of income (such as land, a trade, or employment) — the source being the tree and the income being the fruit — although exceptions exist for income received after a source has ceased.