Law

Finance Act 1995

United Kingdom · statute

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In force since 2023-08-01, as the publisher states.

Copy read on 2026-11-08. The page it was read from

Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.

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Contents: 184 provisions
  1. Title and introductory text
  2. 1 Low-strength wine, made-wine and cider.
  3. 2 Wine and made-wine: rates.
  4. 3 Spirits, beer and cider: rates.
  5. 4 Alcoholic ingredients relief.
  6. 5 Denatured alcohol.
  7. 6 Rates of duty.
  8. 7 Rates of duty: further provisions.
  9. 8 Hydrocarbon oil: “road vehicle”.
  10. 9 Road fuel gas: old stock.
  11. 10 Rates of duty.
  12. 11 Rates of duty: further provisions.
  13. 12 Pool betting duty.
  14. 13 Rates of duty.
  15. 14 Extension of duty to amusement machines.
  16. 15 Rates of duty.
  17. 16 Assessment of interest on duty.
  18. 17 Preferential debts.
  19. 18 Increased rates on 30th November 1994.
  20. 19 Vehicle excise and registration: other provisions.
  21. 20 Recovery of overpaid excise duty.
  22. 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  23. 22 Imported works of art, antiques, etc.
  24. 23 Agents acting in their own names.
  25. 24 Margin schemes.
  26. 25 Groups of companies.
  27. 27 Set-off of credits.
  28. 28 Transactions treated as supplies for purposes of zero-rating etc.
  29. 29 Goods removed from warehousing regime.
  30. 30 Fuel supplied for private use.
  31. 31 Appeals: payment of amounts shown in returns.
  32. 32 Penalties for failure to notify etc.
  33. 33 Correction of consolidation errors.
  34. 34 Insurance premium tax.
  35. 35 Charge and rates of income tax for 1995-96.
  36. 36 Personal allowance.
  37. 37 Charge and rate of corporation tax for 1995.
  38. 38 Small companies.
  39. 39 Income chargeable under Schedule A.
  40. 40 Non-residents and their representatives.
  41. 41 Income from overseas property.
  42. 42 Abolition of interest relief for commercially let property.
  43. 43 Cars available for private use.
  44. 44 Cars: accessories for the disabled.
  45. 45 Beneficial loan arrangements: replacement loans.
  46. 46 Relief on re-investment: property companies etc.
  47. 47 Relief on re-investment: amount of relief, etc.
  48. 48 Roll-over relief and groups of companies.
  49. 49 De-grouping charges.
  50. 50 Corporate bonds.
  51. 51 Companies carrying on life assurance business.
  52. 52 Meaning of “insurance company”.
  53. 53 Transfer of life insurance business.
  54. 54 Friendly societies.
  55. 55 Qualifying life insurance policies.
  56. 56 Foreign life policies etc.
  57. 57 Duties of insurers in relation to life policies etc.
  58. 58 Personal pensions: income withdrawals.
  59. 59 Pensions: meaning of insurance company etc.
  60. 60 Application of section 59.
  61. 61 Cessation of approval of certain retirement benefits schemes.
  62. 62 Follow-up TESSAs.
  63. 63 TESSAs: European institutions.
  64. 64 Personal equity plans: tax representatives.
  65. 65 Contractual savings schemes.
  66. 66 Enterprise investment scheme: ICTA amendments.
  67. 67 Enterprise investment scheme: TCGA amendments.
  68. 68 Business expansion scheme: ICTA amendments
  69. 69 Business expansion scheme: TCGA amendments.
  70. 70 Approval of companies as trusts.
  71. 71 Income tax relief.
  72. 72 Capital gains.
  73. 73 Regulations.
  74. 74 Settlements: liability of settlor.
  75. 75 Deceased persons’ estates: taxation of beneficiaries.
  76. 76 Untaxed income of a deceased person’s estate.
  77. 77 Interest on gilt-edged securities payable without deduction of tax.
  78. 78 Periodic accounting for tax on interest on gilt-edged securities.
  79. 79 Sale and repurchase of securities: exclusion from accrued income scheme.
  80. 80 Treatment of price differential on sale and repurchase of securities.
  81. 81 Manufactured interest payments: exclusion from bond-washing provisions.
  82. 82 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  83. 83 Power to make special provision for special cases.
  84. 84 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  85. 85 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  86. 86 Deduction of tax from interest on deposits.
  87. 87 Interest payments deemed to be distributions.
  88. 88 Generalisation of ss.63 to 66 of Finance Act 1993.
  89. 89 Application of ss.63 to 66 to debts held by associates of banks.
  90. 90 Relief for post-cessation expenditure.
  91. 91 Employee liabilities and indemnity insurance.
  92. 92 Post-employment deductions.
  93. 93 Incidental overnight expenses etc.
  94. 94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  95. 95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  96. 96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  97. 97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  98. 98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  99. 99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  100. 100 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  101. 101 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  102. 102 Commencement of certain provisions.
  103. 103 Liability of trustees.
  104. 104 Returns and self-assessments.
  105. 105 Records for purposes of returns.
  106. 106 Return of employees’ emoluments etc.
  107. 107 Procedure for making claims etc.
  108. 108 Payments on account of income tax.
  109. 109 Surcharges on unpaid tax.
  110. 110 Interest on overdue tax.
  111. 111 Assessments in respect of income taken into account under PAYE.
  112. 112 Recovery of certain amounts deducted or paid under MIRAS.
  113. 113 Allowable losses: capital gains tax.
  114. 114 Liability of trustees and personal representatives: capital gains tax.
  115. 115 Minor amendments and repeals.
  116. 116 Transitional provisions.
  117. 117 Treatment of partnerships.
  118. 118 Loss relief: general.
  119. 119 Relief for losses on unquoted shares.
  120. 120 Relief for pre-trading expenditure.
  121. 121 Basis of apportionment for Cases I, II and VI of Schedule D.
  122. 122 Amendments of transitional provisions.
  123. 123 Prevention of exploitation of transitional provisions.
  124. 124 Change of residence.
  125. 125 Non-resident partners.
  126. 126 UK representatives of non-residents.
  127. 127 Persons not treated as UK representatives.
  128. 128 Limit on income chargeable on non-residents: income tax.
  129. 129 Limit on income chargeable on non-residents: corporation tax.
  130. 130 Exchange gains and losses: general.
  131. 131 Exchange gains and losses: transitional provision.
  132. 132 Currency contracts: transitional provisions.
  133. 133 Controlled foreign companies.
  134. 134 Offshore funds.
  135. 135 Change in ownership of investment company: deductions.
  136. 136 Profit-related pay.
  137. 137 Part-time workers: miscellaneous provisions.
  138. 138 Charities, etc.: lotteries.
  139. 139 Sub-contractors in the construction industry.
  140. 140 Valuation of trading stock on discontinuance of trade.
  141. 141 Incapacity benefit.
  142. 142 Annuities purchased where certain claims or actions are settled.
  143. 143 Lloyd’s underwriters: new-style special reserve funds.
  144. 144 Local government residuary body.
  145. 145 Payment of rent &c., under deduction of tax.
  146. 146 Restriction of unrelievable field losses.
  147. 147 Removal of time limits for claims for unrelievable field losses.
  148. 148 Transfer of interests in fields: restriction of transferred losses.
  149. 149 Transfer: associated bodies.
  150. 150 Northern Ireland transfer: associated bodies.
  151. 151 Lease or tack: associated bodies.
  152. 152 Open-ended investment companies.
  153. 153 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  154. 154 Short rotation coppice.
  155. 155 Inheritance tax: agricultural property.
  156. 156 Proceedings for tax in sheriff court.
  157. 157 Certificates of tax deposit.
  158. 158 Amendment of the Exchequer and Audit Departments Act 1866.
  159. 159 Ports levy.
  160. 160 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  161. 161 Interpretation.
  162. 162 Repeals.
  163. 163 Short title.
  164. SCHEDULE 1 Table of rates of duty on wine and made-wine
  165. SCHEDULE 2 Denatured alcohol
  166. SCHEDULE 3 Amusement Machine Licence Duty
  167. SCHEDULE 4 Vehicle Excise and Registration
  168. SCHEDULE 5 Insurance Premium Tax
  169. SCHEDULE 6 Amendments in connection with charge under Schedule A
  170. SCHEDULE 7
  171. SCHEDULE 9 Transfer of Life Insurance Business
  172. SCHEDULE 10 Friendly Societies
  173. SCHEDULE 13 Enterprise Investment Scheme
  174. SCHEDULE 16
  175. SCHEDULE 17 Settlements: liability of settlor
  176. SCHEDULE 18 Deceased persons’ estates
  177. SCHEDULE 19
  178. SCHEDULE 20 Claims etc. not included in returns
  179. SCHEDULE 21 Self-assessment etc: transitional provisions
  180. SCHEDULE 22 Prevention of exploitation of SCHEDULE 2 TO ITTOIA 2005 (SO FAR AS RELATING TO OVERLAP PROFIT)
  181. SCHEDULE 24 Exchange gains and losses
  182. SCHEDULE 25 Controlled Foreign Companies
  183. SCHEDULE 28
  184. SCHEDULE 29 Repeals

Proposed changes to this act

No one has proposed a change to this act yet.

184 provisions

41 Income from overseas property.

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Propose a change

42 Abolition of interest relief for commercially let property.

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) That Act shall be further amended as follows— (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Propose a change

43 Cars available for private use.

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Propose a change

44 Cars: accessories for the disabled.

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Propose a change

45 Beneficial loan arrangements: replacement loans.

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Propose a change

46 Relief on re-investment: property companies etc.

(1) Chapter IA of Part V of the Taxation of Chargeable Gains Act 1992 (roll-over relief on re-investment) shall be amended as follows. (2) In section 164A (relief on re-investment for individuals) the following subsection shall be inserted after subsection (12)— (13) Where an acquisition is made on or after 29th November 1994 section 164H shall be ignored in deciding whether it is an acquisition of a qualifying investment for the purposes of this section. (3) In section 164F (failure of conditions of relief) the following subsection shall be inserted after subsection (2)— (2A) In deciding for the purposes of subsection (2)(b) above whether a company is a qualifying company at a time falling on or after 29th November 1994 section 164H shall be ignored. (4) In section 164I (qualifying trades) the following subsection shall be inserted after subsection (4)— (4A) In deciding whether a trade complies with this section at a time falling on or after 29th November 1994 paragraphs (g) and (h) of subsection (2) above shall be ignored.

Propose a change

47 Relief on re-investment: amount of relief, etc.

(1) Chapter IA of Part V of the Taxation of Chargeable Gains Act 1992 (roll-over relief on re-investment) shall be amended as follows. (2) In section 164A after subsection (13) (inserted by section 46 above) there shall be inserted— (14) This section is subject to sections 164FF and 164FG. (3) In section 164F after subsection (10B) there shall be inserted— (10C) Subsection (10A) above is subject to sections 164FF and 164FG. (4) After section 164F there shall be inserted— Qualifying investment acquired from husband or wife. 164FF (1) This section applies where— (a) a claim is made under subsection (2) of section 164A or subsection (10A) of section 164F; and (b) the qualifying investment as respects which the claim is made is acquired by a disposal to which section 58 applies. (2) The amounts by reference to which the reduction is determined shall be treated as including the amount of the consideration which the claimant would under this Act be treated as having given for the qualifying investment if he had, immediately upon acquiring the qualifying investment, disposed of it on a disposal which was not a no gain/no loss disposal. (3) Where— (a) the claimant makes a disposal, which is not a no gain/no loss disposal, of the qualifying investment, and (b) any disposal after 31st March 1982 and before he acquired the qualifying investment was a no gain/no loss disposal, nothing in paragraph 1 of Schedule 3, section 35 or section 55 shall operate to defeat the reduction falling to be made under section 164A(2)(b) or, as the case may be, section 164F(10A)(b) in the consideration for the acquisition of the qualifying investment. (4) Where— (a) the claimant makes a disposal of the qualifying investment and that disposal is a disposal to which section 58 applies, and (b) any disposal after 31st March 1982 and before the claimant acquired the qualifying investment was a no gain/no loss disposal, nothing in the application of paragraph 1 of Schedule 3, section 35 or section 55 to the person to whom the claimant makes the disposal of the qualifying investment shall operate to defeat the reduction made under section 164A(2)(b) or, as the case may be, section 164F(10A)(b). (5) For the purposes of this section a no gain/no loss disposal is one on which by virtue of any of the enactments specified in section 35(3)(d) neither a gain nor a loss accrues. (5) After section 164FF (inserted by subsection (4) above) there shall be inserted— Multiple claims. 164FG (1) This section applies where— (a) a reduction is claimed by a person as respects a qualifying investment under subsection (2) of section 164A or subsection (10A) of section 164F; and (b) any other reduction has been or is being claimed by that person under either subsection as respects that investment. (2) Subject to subsection (5) below, the reductions shall be treated as claimed separately in such sequence as the claimant elects or an officer of the Board in default of an election determines. (3) In relation to a later claim as respects the qualifying investment under either subsection, the subsection shall have effect as if each of the relevant amounts were reduced by the aggregate of any reductions made in the amount or value of the consideration for the acquisition of that investment by virtue of any earlier claims as respects that investment. (4) In subsection (3) above “the relevant amounts” means— (a) if the claim is under section 164A(2), the amounts referred to in subsection (2)(a)(ii) and (iii) and any amount required to be included by virtue of section 164FF(2); and (b) if the claim is under section 164F(10A), the amounts referred to in subsection (10A)(a)(i) and (ii) and any amount required to be included by virtue of section 164FF(2). (5) A claim that has become final shall be treated as made earlier than any claim that has not become final. (6) For the purposes of subsection (5) above, a claim becomes final when— (a) it may no longer be amended, or (b) it is finally determined, whichever occurs first. (6) Subsection (4) above (and subsections (1) to (3) above so far as relating to subsection (4) above) shall apply to a claim as respects a qualifying investment if— (a) the qualifying investment is acquired on or after 20th June 1994; or (b) the claim is under section 164A(2) and relates to a disposal on or after that day; or (c) the claim is under subsection (10A) of section 164F and relates to a gain which (apart from that subsection) would accrue on or after that day. (7) Subsection (5) above (and subsections (1) to (3) above so far as relating to subsection (5) above) shall apply to a claim as respects a qualifying investment if— (a) the qualifying investment is acquired on or after 20th June 1994; or (b) the claim is under section 164A(2) and relates to a disposal on or after that day; or (c) the claim is under subsection (10A) of section 164F and relates to a gain which (apart from that subsection) would accrue on or after that day; or (d) there is another claim as respects that qualifying investment which is under section 164A(2) and which relates to a disposal on or after that day; or (e) there is another claim as respects that qualifying investment which is under subsection (10A) of section 164F and which relates to a gain which (apart from that subsection) would accrue on or after that day. (8) Any such adjustment as is appropriate in consequence of this section may be made (whether by discharge or repayment of tax, the making of an assessment or otherwise).

Propose a change

48 Roll-over relief and groups of companies.

(1) In section 175 of the Taxation of Chargeable Gains Act 1992 (replacement of business assets by members of a group), after subsection (2) there shall be inserted the following subsections— (2A) Section 152 shall apply where— (a) the disposal is by a company which, at the time of the disposal, is a member of a group of companies, (b) the acquisition is by another company which, at the time of the acquisition, is a member of the same group, and (c) the claim is made by both companies, as if both companies were the same person. (2B) Section 152 shall apply where a company which is a member of a group of companies but is not carrying on a trade— (a) disposes of assets (or an interest in assets) used, and used only, for the purposes of the trade which (in accordance with subsection (1) above) is treated as carried on by the members of the group which carry on a trade, or (b) acquires assets (or an interest in assets) taken into use, and used only, for those purposes, as if the first company were carrying on that trade. (2C) Section 152 shall not apply if the acquisition of, or of the interest in, the new assets— (a) is made by a company which is a member of a group of companies, and (b) is one to which any of the enactments specified in section 35(3)(d) applies. (2) In section 247 of the Taxation of Chargeable Gains Act 1992 (roll-over relief on compulsory acquisition of land), after subsection (5) there shall be inserted the following subsection— (5A) Subsections (2A) and (2C) of section 175 shall apply in relation to this section as they apply in relation to section 152 (but as if the reference in subsection (2C) to the new assets were a reference to the new land). (3) Subject to subsection (4) below— (a) the subsection inserted into section 175 of the Taxation of Chargeable Gains Act 1992 by subsection (1) above as subsection (2A) shall be deemed always to have had effect; and (b) the earlier enactments corresponding to that section shall be deemed to have contained provision to the same effect as that subsection (2A). (4) Paragraph (c) of that subsection (2A) shall not apply unless the claim is made on or after 29th November 1994. (5) The subsection inserted into section 175 of the Taxation of Chargeable Gains Act 1992 by subsection (1) above as subsection (2B) shall apply where the disposal or the acquisition is on or after 29th November 1994; and the subsection so inserted as subsection (2C) shall apply where the acquisition is on or after that date. (6) The subsection inserted into section 247 of the Taxation of Chargeable Gains Act 1992 by subsection (2) above shall apply— (a) so far as it relates to section 175(2A), where the disposal or the acquisition is on or after 29th November 1994; and (b) so far as it relates to section 175(2C), where the acquisition is on or after that date.

Propose a change

49 De-grouping charges.

(1) In section 179 of the Taxation of Chargeable Gains Act 1992 (de-grouping charges), after subsection (2) there shall be inserted the following subsections— (2A) Where— (a) a company that has ceased to be a member of a group of companies (“the first group”) acquired an asset from another company which was a member of that group at the time of the acquisition, (b) subsection (2) above applies in the case of that company’s ceasing to be a member of the first group so that subsection (1) above does not have effect as respects the acquisition of that asset, (c) the company that made the acquisition subsequently ceases to be a member of another group of companies (“the second group”), and (d) there is a connection between the two groups, subsection (1) above shall have effect in relation to the company’s ceasing to be a member of the second group as if it had been the second group of which both companies had been members at the time of the acquisition. (2B) For the purposes of subsection (2A) above there is a connection between the first group and the second group if, at the time when the chargeable company ceases to be a member of the second group, the company which is the principal company of that group is under the control of— (a) the company which is the principal company of the first group or, if that group no longer exists, which was the principal company of that group when the chargeable company ceased to be a member of it; (b) any company which controls the company mentioned in paragraph (a) above or which has had it under its control at any time in the period since the chargeable company ceased to be a member of the first group; or (c) any company which has, at any time in that period, had under its control either— (i) a company which would have fallen within paragraph (b) above if it had continued to exist, or (ii) a company which would have fallen within this paragraph (whether by reference to a company which would have fallen within that paragraph or to a company or series of companies falling within this sub-paragraph). (2) After subsection (9) of that section there shall be inserted the following subsection— (9A) Section 416(2) to (6) of the Taxes Act (meaning of control) shall have effect for the purposes of subsection (2B) above as it has effect for the purposes of Part XI of that Act; but a person carrying on a business of banking shall not for the purposes of that subsection be regarded as having control of any company by reason only of having, or of the consequences of having exercised, any rights of that person in respect of loan capital or debt issued or incurred by the company for money lent by that person to the company in the ordinary course of that business. (3) This section has effect in relation to a company in any case in which the time of the company’s ceasing to be a member of the second group is on or after 29th November 1994.

Propose a change

50 Corporate bonds.

In section 117 of the Taxation of Chargeable Gains Act 1992 (qualifying corporate bonds) the following subsection shall be inserted after subsection (2)— (2A) Where it falls to be decided whether at any time on or after 29th November 1994 a security (whenever issued) is a corporate bond for the purposes of this section, a security which falls within paragraph 2(2)(c) of Schedule 11 to the Finance Act 1989 (quoted indexed securities) shall be treated as not being a corporate bond within the definition in subsection (1) above.

Propose a change

51 Companies carrying on life assurance business.

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Propose a change

52 Meaning of “insurance company”.

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) In section 59(3)(b) of the Inheritance Tax Act 1984 (interests of insurance companies acquired before 14th March 1975 to be qualifying interests in possession), for the words from “if” onwards there shall be substituted if the company is an insurance company (within the meaning of Chapter I of Part XII of the Taxes Act 1988) and either— (i) is authorised to carry on long term business under section 3 or 4 of the Insurance Companies Act 1982; or (ii) carries on through a branch or agency in the United Kingdom the whole or any part of any long term business which it is authorised to carry on by an authorisation granted outside the United Kingdom for the purposes of the first long term insurance Directive; and in paragraph (b) above “long term business” and “the first long term insurance Directive” have the same meanings as in that Act of 1982. (5) Subsections (1) to (3) above shall have effect in relation to any accounting period ending after 30th June 1994; and subsection (4) above shall have effect for the purposes of the making, on an anniversary or other occasion after that date, of any charge to tax under section 64 or 65 of the Inheritance Tax Act 1984.

Propose a change

53 Transfer of life insurance business.

(1) The amendments specified in Schedule 9 to this Act (which relate to enactments referring to the transfer of the whole or part of the long term business of an insurance company) shall have effect. (2) This section and that Schedule shall have effect in relation to any transfers sanctioned or authorised after 30th June 1994.

Propose a change

54 Friendly societies.

Schedule 10 to this Act (which makes provision about friendly societies) shall have effect.

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55 Qualifying life insurance policies.

(1) Subject to subsections (2) and (3) below— (a) paragraph 21 of Schedule 15 to the Taxes Act 1988 (certification of policies and of standard forms etc.) shall not apply, in relation to any time on or after the appointed date, for determining whether a policy is or would be a qualifying policy at that time; and (b) no certificate may be issued under that paragraph at any time on or after that date except, in the case of a certificate under sub-paragraph (1)(a) of that paragraph, in relation to a time before that date. (2) Subsection (1) above shall not affect the right of any person to bring or continue with an appeal under paragraph 21(3) of that Schedule against either a refusal before the appointed date to certify any policy or a refusal on or after that date to certify any policy in relation to times before that date. (3) A certificate issued— (a) before the appointed date in pursuance of paragraph 21(1)(a) of that Schedule, or (b) in pursuance of a determination on an appeal determined after that date by virtue of subsection (2) above, shall, in relation to any time on or after that date or, as the case may be, the date on which it is issued, be conclusive evidence that the policy to which it relates is (subject to paragraphs A1(2), B2(2) and B3(3) of that Schedule and to any variation of the policy) a qualifying policy. (4) Paragraph 22 of that Schedule (certificates from body issuing policy) shall cease to have effect in relation to any time on or after the appointed date. (5) Paragraph 24 of that Schedule (policies issued by non-resident companies) shall have effect in relation to times on or after the appointed date— (a) with the substitution of the following sub-paragraphs for sub-paragraph (2)— (2) Subject to section 55(3) of the Finance Act 1995 (transitional provision for the certification of certain policies), a new non-resident policy that falls outside sub-paragraph (2A) below shall not be a qualifying policy until such time as the conditions in sub-paragraph (3) are fulfilled with respect to it. (2A) A policy falls outside this sub-paragraph unless, at the time immediately before the appointed day, it was a qualifying policy by virtue of sub-paragraphs (2)(b) and (4) of this paragraph, as they had effect in relation to that time. ; and (b) with the omission, in sub-paragraph (3), of the word “first” and of sub-paragraph (4). (6) In paragraph 25 of that Schedule (policies substituted for policies issued by non-resident companies), for sub-paragraph (2) there shall be substituted the following sub-paragraph— (2) The modifications are the following— (a) if, apart from paragraph 24, the old policy or any related policy (within the meaning of paragraph 17(2)(b)) of which account falls to be taken would have been a qualifying policy, that policy shall be assumed to have been a qualifying policy for the purposes of paragraph 17(2); and (b) if, apart from this paragraph, the new policy would be a qualifying policy, it shall not be such a policy unless the circumstances are as specified in paragraph 17(3); and (c) in paragraph 17(3)(c) the words “either by a branch or agency of theirs outside the United Kingdom or” shall be omitted; and references in this sub-paragraph to being a qualifying policy shall have effect, in relation to any time before the appointed date, as including a reference to being capable of being certified as such a policy. (7) In paragraph 27(1) of that Schedule, except so far as it has effect for the purposes of any case to which paragraph 21 of that Schedule applies by virtue of the preceding provisions of this section, for “paragraphs 21 and” there shall be substituted “ paragraph ”. (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9) In this section “the appointed date” means such date as may be specified for the purpose in an order made by the Board.

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56 Foreign life policies etc.

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57 Duties of insurers in relation to life policies etc.

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58 Personal pensions: income withdrawals.

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59 Pensions: meaning of insurance company etc.

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60 Application of section 59.

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61 Cessation of approval of certain retirement benefits schemes.

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62 Follow-up TESSAs.

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63 TESSAs: European institutions.

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64 Personal equity plans: tax representatives.

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65 Contractual savings schemes.

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66 Enterprise investment scheme: ICTA amendments.

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67 Enterprise investment scheme: TCGA amendments.

Schedule 13 to this Act (which contains amendments relating to chargeable gains as regards the enterprise investment scheme) shall have effect.

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68 Business expansion scheme: ICTA amendments

(1) Chapter III of Part VII of the Taxes Act 1988 as it has effect in relation to shares issued before 1st January 1994 (the business expansion scheme) shall be amended as follows. (2) In section 289 (the relief) the following subsection shall be inserted after subsection (12) (which defines “the relevant period” for the purposes of the Chapter)— (12A) In arriving at the relevant period for the purposes of sections 294 to 296 any time falling on or after 29th November 1994 shall be ignored; and subsection (12) above shall have effect subject to the preceding provisions of this subsection. (3) In section 305 (reorganisation of share capital) the following subsections shall be inserted after subsection (4)— (5) Subsection (2) above shall not apply where the reorganisation occurs on or after 29th November 1994. (6) Subsection (2) above shall not apply by virtue of subsection (3) above where the rights are disposed of on or after 29th November 1994.

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69 Business expansion scheme: TCGA amendments.

In section 150 of the Taxation of Chargeable Gains Act 1992 (business expansion schemes) the following subsections shall be inserted after subsection (8) (which disapplies provisions about exchanges, reconstructions or amalgamations in certain circumstances)— (8A) Subsection (8) above shall not have effect to disapply section 135 or 136 where— (a) the new holding consists of new ordinary shares carrying no present or future preferential right to dividends or to a company’s assets on its winding up and no present or future preferential right to be redeemed, (b) the new shares are issued on or after 29th November 1994 and after the end of the relevant period, and (c) the condition in subsection (8B) below is fulfilled. (8B) The condition is that at some time before the issue of the new shares— (a) the company issuing them issued eligible shares, and (b) a certificate in relation to those eligible shares was issued by the company for the purposes of subsection (2) of section 306 of the Taxes Act and in accordance with that section. (8C) In subsection (8A) above— (a) “new holding” shall be construed in accordance with sections 126, 127, 135 and 136; (b) “relevant period” means the period found by applying section 289(12)(a) of the Taxes Act by reference to the company issuing the shares referred to in subsection (8) above and by reference to those shares.

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70 Approval of companies as trusts.

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71 Income tax relief.

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72 Capital gains.

(1) The Taxation of Chargeable Gains Act 1992 shall be amended as follows. (2) In section 100(1) (exemption from charge for gains accruing to authorised unit trusts, investment trusts etc.), after “investment trust” there shall be inserted “ a venture capital trust ”. (3) In Chapter III of Part IV (miscellaneous provisions relating to securities), after section 151 there shall be inserted the following sections— Venture capital trusts: reliefs. 151A (1) A gain or loss accruing to an individual on a qualifying disposal of any ordinary shares in a company which— (a) was a venture capital trust at the time when he acquired the shares, and (b) is still such a trust at the time of the disposal, shall not be a chargeable gain or, as the case may be, an allowable loss. (2) For the purposes of this section a disposal of shares is a qualifying disposal in so far as— (a) it is made by an individual who has attained the age of eighteen years; (b) the shares disposed of were not acquired in excess of the permitted maximum for any year of assessment; and (c) that individual acquired those shares for bona fide commercial purposes and not as part of a scheme or arrangement the main purpose of which, or one of the main purposes of which, is the avoidance of tax. (3) Schedule 5C shall have effect for providing relief in respect of gains invested in venture capital trusts. (4) In determining for the purposes of this section whether a disposal by any person of shares in a venture capital trust relates to shares acquired in excess of the permitted maximum for any year of assessment, it shall be assumed (subject to subsection (5) below)— (a) as between shares acquired by the same person on different days, that those acquired on an earlier day are disposed of by that person before those acquired on a later day; and (b) as between shares acquired by the same person on the same day, that those acquired in excess of the permitted maximum are disposed of by that person before he disposes of any other shares acquired on that day. (5) It shall be assumed for the purposes of subsection (1) above that a person who disposes of shares in a venture capital trust disposes of shares acquired at a time when it was not such a trust before he disposes of any other shares in that trust. (6) References in this section to shares in a venture capital trust acquired in excess of the permitted maximum for any year of assessment shall be construed in accordance with the provisions of Part II of Schedule 15B to the Taxes Act; and the provisions of that Part of that Schedule shall apply (with subsections (4) and (5) above) for identifying the shares which are, in any case, to be treated as representing shares acquired in excess of the permitted maximum. (7) In this section and section 151B “ordinary shares”, in relation to a company, means any shares forming part of the company’s ordinary share capital (within the meaning of the Taxes Act). Venture capital trusts: supplementary. 151B (1) Sections 104, 105 and 107 shall not apply to any shares in a venture capital trust which are eligible for relief under section 151A(1). (2) Subject to the following provisions of this section, where— (a) an individual holds any ordinary shares in a venture capital trust, (b) some of those shares fall within one of the paragraphs of subsection (3) below, and (c) others of those shares fall within at least one other of those paragraphs, then, if there is within the meaning of section 126 a reorganisation affecting those shares, section 127 shall apply separately in relation to the shares (if any) falling within each of the paragraphs of that subsection (so that shares of each kind are treated as a separate holding of original shares and identified with a separate new holding). (3) The kinds of shares referred to in subsection (2) above are— (a) any shares in a venture capital trust which are eligible for relief under section 151A(1) and by reference to which any person has been given or is entitled to claim relief under Part I of Schedule 15B to the Taxes Act; (b) any shares in a venture capital trust which are eligible for relief under section 151A(1) but by reference to which no person has been given, or is entitled to claim, any relief under that Part of that Schedule; (c) any shares in a venture capital trust by reference to which any person has been given, or is entitled to claim, any relief under that Part of that Schedule but which are not shares that are eligible for relief under section 151A(1); and (d) any shares in a venture capital trust that do not fall within any of paragraphs (a) to (c) above. (4) Where— (a) an individual holds ordinary shares in a company (“the existing holding”), (b) there is, by virtue of any such allotment for payment as is mentioned in section 126(2)(a), a reorganisation affecting the existing holding, and (c) immediately following the reorganisation, the shares or the allotted holding are shares falling within any of paragraphs (a) to (c) of subsection (3) above, sections 127 to 130 shall not apply in relation to the existing holding. (5) Sections 135 and 136 shall not apply where— (a) the exchanged holding consists of shares falling within paragraph (a) or (b) of subsection (3) above; and (b) that for which the exchanged holding is or is treated as exchanged does not consist of ordinary shares in a venture capital trust. (6) Where— (a) the approval of any company as a venture capital trust is withdrawn, and (b) the withdrawal of the approval is not one to which section 842AA(8) of the Taxes Act applies, any person who at the time when the withdrawal takes effect is holding shares in that company which (apart from the withdrawal) would be eligible for relief under section 151A(1) shall be deemed for the purposes of this Act, at that time, to have disposed of and immediately re-acquired those shares for a consideration equal to their market value at that time. (7) The disposal that is deemed to take place by virtue of subsection (6) above shall be deemed for the purposes of section 151A to take place while the company is still a venture capital trust; but, for the purpose of applying sections 104, 105 and 107 to the shares that are deemed to be re-acquired, it shall be assumed that the re-acquisition for which that subsection provides takes place immediately after the company ceases to be such a trust. (8) For the purposes of this section— (a) shares are eligible for relief under section 151A(1) at any time when they are held by an individual whose disposal of the shares at that time would (on the assumption, where it is not the case, that the individual attained the age of eighteen years before that time) be a disposal to which section 151A(1) would apply; and (b) shares shall not, in relation to any time, be treated as shares by reference to which relief has been given under Part I of Schedule 15B to the Taxes Act if that time falls after— (i) any relief given by reference to those shares has been reduced or withdrawn, (ii) any chargeable event (within the meaning of Schedule 5C) has occurred in relation to those shares, or (iii) the death of a person who held those shares immediately before his death; and (c) the references, in relation to sections 135 and 136, to the exchanged holding is a reference to the shares in company B or, as the case may be, to the shares or debentures in respect of which shares or debentures are issued under the arrangement in question. (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5) In section 257(1) (gifts to charities etc.), after paragraph (b) there shall be inserted— and the disposal is not one in relation to which section 151A(1) has effect. (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7) In section 288(1) (interpretation), after the definition of “trading stock” there shall be inserted the following definition— “venture capital trust” has the meaning given by section 842AA of the Taxes Act; . (8) Subsection (2) above shall have effect in relation to gains accruing on or after 6th April 1995 and the other provisions of this section have effect for the year 1995-96 and subsequent years of assessment.

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73 Regulations.

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74 Settlements: liability of settlor.

(1) Schedule 17 to this Act has effect with respect to settlements and the liability of the settlor, as follows— Part I inserts new provisions in place of sections 660 to 676 and 683 to 685 of the Taxes Act 1988, Part II makes minor and consequential amendments of that Act, and Part III contains consequential amendments of other enactments. (2) The amendments made by Schedule 17 have effect for the year 1995-96 and subsequent years of assessment and apply to every settlement, wherever and whenever it was made or entered into.

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75 Deceased persons’ estates: taxation of beneficiaries.

Part XVI of the Taxes Act 1988 (deceased persons’ estates) shall have effect with the amendments specified in Schedule 18 to this Act.

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76 Untaxed income of a deceased person’s estate.

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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77 Interest on gilt-edged securities payable without deduction of tax.

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78 Periodic accounting for tax on interest on gilt-edged securities.

(1) After the section 51A of the Taxes Act 1988 inserted by section 77 above there shall be inserted the following section— Periodic accounting for tax on interest on gilt-edged securities. 51B (1) The Treasury may by regulations provide for persons to whom payments of interest on relevant gilt-edged securities are made without deduction of tax to be required to make periodic returns to an officer of the Board of— (a) amounts of any payments of such interest made to that person, and (b) amounts of tax for which, assuming the payments to bear tax at the basic rate for the relevant year of assessment, that person is to be accountable under the regulations in respect of those payments; and any such regulations may further provide for the amounts of tax required to be included in any such return to become due, at the time when the return is required to be made, from the person required to make it. (2) Regulations made by the Treasury for the purposes of this section may— (a) specify such periods as the Treasury may consider appropriate as the periods for which returns are to be made, and in respect of which any person is to account for tax, under the regulations; (b) make provision for enabling returns under the regulations to be combined with returns under Schedule 16 and for requiring particulars of claims and calculations made for the purposes of the regulations to be set out in the returns; (c) provide, in respect of any period for which a return is to be made by any person under the regulations, for that person to be obliged, before the end of the period, to make a payment on account of amounts that may become due from him in respect of that period; (d) impose a requirement for a special return to be made for the purposes of any obligation imposed by virtue of paragraph (c) above; (e) provide for the amount which, under the regulations, is to be due from any person in respect of any period to be reduced by reference to amounts which— (i) are paid by or on behalf of that person under contracts or arrangements relating to transfers of gilt-edged securities; and (ii) are or fall to be treated as representative of interest on those securities; (f) authorise amounts in respect of which there is an obligation to account for tax under the regulations to be treated for specified purposes of the Tax Acts as payments on which a person has borne income tax by deduction; (g) make provision for the assessment of amounts due under the regulations and for the repayment in specified circumstances of amounts paid under the regulations; (h) make provision for interest to be payable, at such rate as may be determined by or under the regulations, on amounts that have become due under the regulations but have not been paid; (i) make provision, where payments of interest on any relevant gilt-edged securities would be comprised in the income of a member of Lloyd’s, for obligations that may be imposed by regulations under this section on the person to whom the interest is paid to be imposed, instead, on such other person as may be described in the regulations. (3) Regulations made by the Treasury for the purposes of this section may— (a) include provision which for the purposes of the regulations makes any provision corresponding, with or without modifications, to any of the provisions of Schedule 16; (b) make provision modifying the operation of Schedule 19AB in relation to cases where payments of interest on relevant gilt-edged securities are made without deduction of tax to companies carrying on pension business; (c) include provision which requires obligations and liabilities under the regulations to be treated as obligations and liabilities to which provisions of Schedule 23 to the Finance Act 1995 (UK representatives) apply; and (d) include provision which, for any of the purposes of the regulations, applies provisions of sections 126 and 127 of, and Schedule 23 to, that Act in relation to times before those provisions otherwise come into force. (4) Regulations made by the Treasury for the purposes of this section may— (a) make different provision for different cases; and (b) contain such supplementary, incidental, consequential and transitional provision as appears to the Treasury to be appropriate; and subsection (3) of section 178 of the Finance Act 1989 (extent of powers to set rates of interest) shall apply for the purposes of the power conferred by virtue of subsection (2)(h) above as it applies for the purposes of the power to make regulations under that section. (5) In this section “relevant gilt-edged securities” means securities which are gilt-edged securities within the meaning of section 51A, other than any to which a direction of the Treasury under section 50 relates. (6) In this section “relevant year of assessment”— (a) in relation to a manufactured payment, means the year of assessment in which it is received by the person to whom it is paid; and (b) in relation to any other payment of interest, means the year of assessment in which the payment is made; and in this subsection “manufactured payment” means any payment which for the purposes of Schedule 23A is a payment of manufactured interest. (2) In the Table in section 98 of the Management Act (penalties in respect of certain information provisions), immediately before the entry in the second column relating to section 124(3) of the Taxes Act 1988 there shall be inserted the following entry— regulations under section 51B; .

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79 Sale and repurchase of securities: exclusion from accrued income scheme.

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80 Treatment of price differential on sale and repurchase of securities.

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) In section 729 of that Act (sale and repurchase of securities), after subsection (5) there shall be inserted the following subsection— (5A) This section shall not apply where section 737A applies; and this section shall be disregarded in determining whether the condition in subsection (2)(b) of that section is fulfilled in any case. (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) After section 263 of the Taxation of Chargeable Gains Act 1992 there shall be inserted the following section— Agreements for sale and repurchase of securities. 263A (1) Subject to subsections (2) to (4) below, in any case falling within subsection (1) of section 730A of the Taxes Act (treatment of price differential on sale and repurchase of securities) and in any case which would fall within that subsection if the sale price and the repurchase price were different— (a) the acquisition of the securities in question by the interim holder and the disposal of those securities by him to the repurchaser, and (b) except where the repurchaser is or may be different from the original owner, the disposal of those securities by the original owner and any acquisition of those securities by the original owner as the repurchaser, shall be disregarded for the purposes of capital gains tax. (2) Subsection (1) above does not apply in any case where the repurchase price of the securities in question falls to be calculated for the purposes of section 730A of the Taxes Act by reference to provisions of section 737C of that Act that are not in force in relation to those securities when the repurchase price becomes due. (3) Subsection (1) above does not apply if— (a) the agreement or agreements under which provision is made for the sale and repurchase are not such as would be entered into by persons dealing with each other at arm’s length; or (b) any of the benefits or risks arising from fluctuations, before the repurchase takes place, in the market value of the securities sold accrues to, or falls on, the interim holder. (4) Subsection (1) above does not apply in relation to any disposal or acquisition of qualifying corporate bonds in a case where the securities disposed of by the original owner or those acquired by him, or by any other person, as the repurchaser are not such bonds. (5) Expressions used in this section and in section 730A of the Taxes Act have the same meanings in this section as in that section. (5) This section shall have effect where the agreement to sell the securities is entered into on or after the date on which this Act is passed.

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