Law
Finance Act 1994
United Kingdom · statute
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In force since 2026-04-01, 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: 333 provisions
- Title and introductory text
- 1 Wine, made-wine and cider.
- 2 Tobacco products.
- 3 Hydrocarbon oil.
- 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 5 Vehicles excise duty: miscellaneous provisions.
- 6 Gaming machine licence duty.
- 7 Meaning of tribunal
- 8 Penalty for evasion of excise duty.
- 9 Penalties for contraventions of statutory requirements.
- 10 Exceptions to liability under section 9.
- 10A Breaches of controlled goods agreements
- 11 Breaches of walking possession agreements.
- 12 Assessments to excise duty.
- 12A Other assessments relating to excise duty matters.
- 12B Section 12A: supplementary provisions.
- 13 Assessments to penalties.
- 13A Meaning of “relevant decision”
- 14 Requirement for review of decision under section 152(b) of the Management Act etc
- 14A Review out of time
- 15 Review procedure.
- 15A Offer of review of relevant decision
- 15B Right to require review
- 15C Review by HMRC
- 15D Extensions of time
- 15E Review out of time
- 15F Nature of review etc
- 16 Appeals to a tribunal.
- 16A Temporary approvals etc pending review or appeal: eligibility
- 16B Temporary approvals etc pending review or appeal: process
- 16C Temporary approvals etc pending review or appeal: modifications
- 17 Interpretation.
- 18 Consequential modifications of enactments.
- 19 Commencement of Chapter.
- 20 Interpretation, etc.
- 21 Requirements about keeping records.
- 22 Records and rules of evidence.
- 23 Furnishing of information and production of documents.
- 24 Power of entry.
- 25 Order for production of documents.
- 26 Procedure when documents are removed.
- 27 Failure of officer to comply with requirements under section 26.
- 28 Air passenger duty.
- 29 Chargeable aircraft.
- 29A Chargeable aircraft: exceptions
- 30 The rate of duty.
- 30A Northern Ireland long haul and ultra-long haul rates of duty
- 31 Passengers: exceptions.
- 32 Change of circumstances after ticket issued etc.
- 33 Registration of aircraft operators.
- 33A Registration of Northern Ireland long haul aircraft operators
- 34 Fiscal representatives.
- 34A Administrative representatives.
- 35 Fiscal representatives: supplementary.
- 36 Security for payment of duty.
- 37 Handling agents.
- 38 Accounting for and payment of duty.
- 39 Schemes for simplified operation of Chapter
- 40 Administration and enforcement.
- 41 Offences.
- 41A Northern Ireland long haul rates of duty: disclosure of information
- 42 Regulations and orders.
- 43 Interpretation.
- 44 Commencement.
- 45
- 46 Repayment supplement.
- 47
- 48 Insurance premium tax.
- 49 Charge to tax.
- 50 Chargeable amount.
- 51 Rate of tax.
- 51A Premiums liable to tax at the higher rate.
- 52 Liability to pay tax.
- 52A Certain fees to be treated as premiums under higher rate contracts.
- 53 Registration of insurers.
- 53AA Registration of taxable intermediaries.
- 53A Information required to keep register up to date.
- 54 Accounting for tax and time for payment.
- 55 Credit.
- 56 Power to assess.
- 57 Tax representatives.
- 58 Rights and duties of tax representatives.
- 59 Appeals
- 59A Offer of review
- 59B Right to require review
- 59C Review by HMRC
- 59D Extensions of time
- 59E Review out of time
- 59F Nature of review etc
- 59G Bringing of appeals
- 60 Further provisions relating to appeals
- 61 Review and appeal: commencement.
- 62 Partnership, bankruptcy, transfer of business, etc.
- 63 Groups of companies.
- 64 Information, powers, penalties, etc.
- 65 Liability of insured in certain cases.
- 66 Directions as to amounts of premiums.
- 66A Rate increases: deemed date of receipt of certain premiums
- 66B Section 66A: exceptions and apportionments
- 66C Rate changes: premiums relating to more than one period of cover
- 67 Deemed date of receipt of certain premiums.
- 68 Special accounting schemes.
- 69 Charge to tax where different rates of tax apply.
- 69A Part-exempt contracts: excepted premiums
- 69B Treatment of excepted premiums where limits breached after receipt
- 69C Part-exempt contracts: exemption from requirement to make returns
- 69D Withdrawal of exemption
- 70 Interpretation: taxable insurance contracts.
- 71 Taxable insurance contracts: power to change definition.
- 72 Interpretation: premium.
- 73 Interpretation: other provisions.
- 74 Orders and regulations.
- 75 Charge and rates of income tax for 1994-95.
- 76 Personal allowance.
- 77 Rate of relief to married couples etc.
- 78 Amount by reference to which MCA is reduced.
- 79 Relief for maintenance payments.
- 80 Limit on relief for interest.
- 81 Mortgage interest relief etc.
- 82 Relief for blind persons.
- 83 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 84 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 85 Charge and rate of corporation tax for 1994.
- 86 Small companies.
- 87 Car fuel.
- 88 Beneficial loan arrangements.
- 89 Vouchers and credit-tokens.
- 90 Annual exempt amount for 1994-95.
- 91 Relief on re-investment.
- 92 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 93 Indexation losses.
- 94 Set-off of pre-entry losses.
- 95 Commodity and financial futures.
- 96 Cash-settled options.
- 97 Settlements with foreign element: information.
- 98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 100 Relevant age for purpose of appropriate percentage.
- 101 Acceptance of qualifying corporate bonds for shares.
- 102 Employee share ownership trusts.
- 103 The administrator.
- 104 Default of administrator etc.
- 105 Information.
- 106 False statements etc.
- 107 Discretionary approval.
- 108 Taxation of benefits of non-approved schemes.
- 109 Annuities derived from personal pension schemes.
- 110 Annuities derived from retirement benefits schemes.
- 111 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 112 Distributions of authorised unit trusts.
- 113 Umbrella schemes.
- 114 Assets and liabilities.
- 115 Currency contracts: net payments.
- 116 Currency contracts: matching.
- 117 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 118 Expenditure on machinery or plant: notification.
- 119 Transactions between connected persons.
- 120 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 121 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 122 Sale and repurchase of securities: deemed manufactured payments.
- 123 Manufactured payments.
- 124 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 125 Payment by intermediary.
- 126 Employees working for persons other than their employers, etc.
- 127 Tradeable assets.
- 128 Non-cash vouchers.
- 129 Credit-tokens.
- 130 Cash vouchers.
- 131 Supplementary.
- 132 Payments etc. received free of tax.
- 133 PAYE regulations: past cases.
- 134 Controlled foreign companies.
- 135 Prevention of avoidance of corporation tax.
- 136 Parts of trades: computations in different currencies.
- 137 Enterprise investment scheme.
- 138 Foreign income dividends.
- 139 Taxation of incapacity benefit.
- 140 Restriction on deduction from income.
- 141 Expenditure involving crime.
- 142 Mortgage interest payable under deduction of tax: qualifying lenders.
- 143 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 144 Debts released in voluntary arrangement: relief from tax.
- 145 Relief for business donations.
- 146 Minor corrections.
- 147 Qualifying contracts.
- 147A Debt contracts and options to be qualifying contracts.
- 148 Contracts which may become qualifying contracts.
- 149 Interest rate contracts and options.
- 150 Currency contracts and options.
- 150A Debt contracts and options.
- 151 Provisions which may be included.
- 152 Provisions which may be disregarded.
- 153 Qualifying payments.
- 154 Qualifying companies.
- 155 Accrual of profits and losses.
- 156 Basis of accounting: general.
- 157 Basis of accounting for linked currency options.
- 158 Adjustments for changes in basis of accounting.
- 159 Trading profits and losses.
- 160 Non-trading profits and losses.
- 161 Termination etc. of qualifying contracts.
- 162 Exchange gains and losses on currency contracts.
- 163 Irrecoverable payments.
- 164 Released payments.
- 165 Transfers of value by qualifying companies.
- 166 Transfers of value to associated companies.
- 167 Transactions not at arm’s length.
- 168 Qualifying contracts with non-residents.
- 168A Qualifying contracts for unallowable purposes
- 169 Insurance and mutual trading companies.
- 170 Investment trusts.
- 171 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 172 Partnerships involving qualifying companies.
- 173 Prevention of double charging etc.
- 174 Prevention of deduction of tax.
- 175 Transitional provisions.
- 176 Minor and consequential amendments.
- 177 Interpretation of Chapter II.
- 178 Personal and trustee’s returns.
- 179 Returns to include self-assessment.
- 180 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 181 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 182 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 183 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 184 Partnership return.
- 185 Partnership return to include partnership statement.
- 186 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 187 Power to call for documents.
- 188 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 189 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 190 Determination of tax where no return delivered.
- 191 Assessment where loss of tax discovered.
- 192 Payments on account of income tax.
- 193 Payment of income tax and capital gains tax.
- 194 Surcharges on unpaid income tax and capital gains tax.
- 195 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 196 Management: other amendments.
- 197 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 198 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 199 Interpretation and commencement of Chapter III.
- 200 Assessment on current year basis.
- 201 Basis of assessment at commencement.
- 202 Change of basis period.
- 203 Conditions for such a change.
- 204 Basis of assessment on discontinuance.
- 205 Overlap profits and overlap losses.
- 206 Basis of assessment under Case III.
- 207 Basis of assessment under Cases IV and V.
- 208 Basis of assessment under Case VI.
- 209 Loss relief: general.
- 210 Relief for losses on unquoted shares.
- 211 Income tax allowances and charges in taxing a trade etc.
- 212 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 213 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 214 Amendments of other enactments.
- 215 Treatment of partnerships.
- 216 Effect of change in ownership of trade, profession or vocation.
- 217 Double taxation relief in respect of overlap profits.
- 218 Commencement, transitional provisions and savings.
- 219 Taxation of profits.
- 220 Accounting period in which certain profits or losses arise.
- 221 Assessment and collection of tax.
- 222 Premium trust funds.
- 223 Ancillary trust funds.
- 224 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 225 Stop-loss and quota share insurance.
- 226 Provisions which are not to apply.
- 227 Cessation: final underwriting year.
- 227A Restriction of group relief
- 227B Transfer of underwriting business without change of ownership
- 227C Exemption for profits or losses of foreign permanent establishments
- 228 Lloyd’s underwriters: individuals.
- 229 Regulations.
- 230 Interpretation and commencement.
- 231 Election by reference to pipe-line with excess capacity.
- 232 Restriction on electing participator’s allowable expenditure on elected assets.
- 233 Tax relief for certain receipts of an electing participator.
- 234 Interpretation of Chapter and supplementary provisions.
- 235 Valuation of oil.
- 236 Valuation of certain light gases.
- 237 Abortive exploration expenditure.
- 238 Disposals of assets producing tariff receipts.
- 239 Execution of deeds.
- 240 Time for presenting agreement for lease.
- 240A Requirements before lease treated as duly stamped.
- 241 Exchange, partition, etc.
- 242 Where consideration not ascertainable from conveyance or lease.
- 243 Agreements to surrender leases.
- 244 Production of documents on transfer of land in Northern Ireland.
- 245 Production of documents: supplementary.
- 246 Rate bands: no indexation in 1994.
- 247 Business and agricultural relief.
- 248 Corporate Lloyd’s underwriters.
- 249 Certain companies treated as non-resident.
- 250 Companies treated as non-resident: supplementary.
- 251 Companies treated as non-resident: repeals.
- 252 Railways.
- 253 Northern Ireland Airports Limited.
- 254 Practice and procedure in connection with appeals.
- 255 Calling for documents of taxpayers and others.
- 256 Minor corrections.
- 257 Interpretation and construction.
- 258 Repeals.
- 259 Short title.
- SCHEDULE 1 Table of rates of duty on wine and made-wine
- SCHEDULE 2 Vehicles excise duty: miscellaneous provisions
- SCHEDULE 3 Amendments about gaming machine licence duty
- SCHEDULE 4 Penalties for statutory contraventions
- SCHEDULE 5 Decisions subject to review and appeal
- SCHEDULE 5A Air passenger duty: territories etc
- SCHEDULE 6 Air passenger duty: administration and enforcement
- SCHEDULE 6A Premiums liable to tax at the higher rate
- SCHEDULE 7 Insurance premium tax
- SCHEDULE 7A INSURANCE PREMIUM TAX: CONTRACTS THAT ARE NOT TAXABLE
- SCHEDULE 8 Supplemental provisions relating to personal reliefs
- SCHEDULE 9 Mortgage interest relief etc.
- SCHEDULE 10 Medical insurance
- SCHEDULE 11 Extension of roll-over relief on re-investment
- SCHEDULE 12 Indexation losses: transitional relief
- SCHEDULE 13 Employee share ownership trusts
- SCHEDULE 14 Distributions of authorised unit trusts
- SCHEDULE 15 Enterprise investment scheme
- SCHEDULE 16 Foreign income dividends
- SCHEDULE 17 Minor corrections
- SCHEDULE 18
- SCHEDULE 19 Management: other amendments
- SCHEDULE 20 Changes for facilitating self-assessment: transitional provisions and savings
- SCHEDULE 21 Lloyd’s underwriters: individuals
- SCHEDULE 22 Supplementary provisions as to elections by reference to pipe-line usage
- SCHEDULE 23 Amendments of the principal Act relating to valuation of light gases
- SCHEDULE 24 Provisions relating to the Railways Act 1993
- SCHEDULE 25 Northern Ireland Airports Limited
- SCHEDULE 26 Repeals
Proposed changes to this act
No one has proposed a change to this act yet.
333 provisions
84 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Propose a change85 Charge and rate of corporation tax for 1994.
Corporation tax shall be charged for the financial year 1994 at the rate of 33 per cent.
Propose a change86 Small companies.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Propose a change87 Car fuel.
(1) In section 158 of the Taxes Act 1988 (car fuel) for the Tables in subsection (2) (tables of cash equivalents) there shall be substituted— TABLE A Cylinder capacity of car in cubic centimetres | Cash equivalent 1,400 or less | £640 More than 1,400 but not more than 2,000 | £810 More than 2,000 | £1,200 TABLE AB Cylinder capacity of car in cubic centimetres | Cash equivalent 2,000 or less | £580 More than 2,000 | £750 TABLE B Description of car | Cash equivalent Any car | £1,200 (2) This section shall have effect for the year 1994-95 and subsequent years of assessment.
Propose a change88 Beneficial loan arrangements.
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Propose a change89 Vouchers and credit-tokens.
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Propose a change90 Annual exempt amount for 1994-95.
For the year 1994-95 section 3 of the Taxation of Chargeable Gains Act 1992 (annual exempt amount) shall have effect as if the amount specified in subsection (2) were £5,800, and accordingly subsection (3) of that section (indexation) shall not apply for that year.
Propose a change91 Relief on re-investment.
(1) Schedule 11 to this Act (which extends the relief on re-investment for individuals and trustees provided by Chapter IA of Part V of the Taxation of Chargeable Gains Act 1992) shall have effect. (2) That Schedule shall have effect in relation to disposals made on or after 30th November 1993. (3) In section 164H(1) of that Act— (a) for “is greater than” there shall be substituted “ exceeds ”, and (b) at the end there shall be added “ or half the value of the company’s assets as a whole (whichever is the greater); and section 294(3) and (4) of the Taxes Act (meaning of value of company’s assets as a whole) applies for the purposes of this subsection as it applies for the purposes of section 294 of that Act ”. (4) Subsection (3) above shall apply to determine whether a company is a qualifying company on or after 30th November 1993.
Propose a change92 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Propose a change93 Indexation losses.
(1) In section 53 of the Taxation of Chargeable Gains Act 1992 (indexation allowance), in subsection (1), for the words following “contrary” to the end of paragraph (c) there shall be substituted if on the disposal of an asset there is an unindexed gain, an allowance (“the indexation allowance”) shall be allowed against the unindexed gain— (a) so as to give the gain for the purposes of this Act, or (b) if the indexation allowance equals or exceeds the unindexed gain, so as to extinguish it (in which case the disposal shall be one on which, after taking account of the indexation allowance, neither a gain nor a loss accrues) . (2) In subsection (2) of that section— (a) for “subsection (1) above” there shall be substituted “ this Chapter ”, (b) for paragraph (a) there shall be substituted— (a) “unindexed gain” means the amount of the gain on the disposal computed in accordance with this Part , and (c) in paragraph (b), for “gain or loss” there shall be substituted “ gain ”. (3) After that subsection there shall be inserted— (2A) Notwithstanding anything in section 16 of this Act, this section shall not apply to a disposal on which a loss accrues. (4) In section 55 of that Act (assets acquired on a no gain/no loss disposal), after subsection (6) there shall be inserted— (7) The rules in subsection (8) below apply (after the application of section 53 but before the application of section 35(3) or (4)) to give the gain or loss for the purposes of this Act where— (a) subsection (6) above applies to the disposal (the “disposal in question”) of an asset by any person (the “transferor”), and (b) but for paragraph (b) of that subsection, the consideration the transferor would be treated as having given for the asset would include an amount or amounts of indexation allowance brought into account by virtue of section 56(2) on any disposal made before 30th November 1993. (8) The rules are as follows— (a) where (apart from this subsection) there would be a loss, an amount equal to the rolled-up indexation shall be added to it so as to increase it, (b) where (apart from this subsection) the unindexed gain or loss would be nil, there shall be a loss of an amount equal to the rolled-up indexation, and (c) where (apart from this subsection)— (i) there would be an unindexed gain, and (ii) the gain or loss would be nil but the amount of the indexation allowance used to extinguish the gain would be less than the rolled-up indexation, the difference shall constitute a loss. (9) In this section the “rolled-up indexation” means, subject to subsections (10) and (11) below, the amount or, as the case may be, the aggregate of the amounts referred to in subsection (7)(b) above; and subsections (10) and (11) below shall, as well as applying on the disposal in question, be treated as having applied on any previous part disposal by the transferor. (10) Where, for the purposes of any disposal of the asset by the transferor, any amount falling within any, or any combination of, paragraphs (a) to (c) of section 38(1) is required by any enactment to be excluded, reduced or written down, the amount or aggregate referred to in subsection (9) above (or so much of it as remains after the application of this subsection and subsection (11) below on a previous part disposal) shall be reduced in proportion to any reduction made in the amount falling within the paragraph, or the combination of paragraphs, in question. (11) Where the transferor makes a part disposal of the asset at any time, then, for the purposes of that and any subsequent disposal, the amount or aggregate referred to in subsection (9) above (or so much of it as remains after the application of this subsection and subsection (10) above on a previous part disposal by him or after the application of subsection (10) above on the part disposal) shall be apportioned between the property disposed of and the property which remains in the same proportions as the sums falling within section 38(1)(a) and (b). (5) In section 56 of that Act (amount of consideration on no gain/no loss disposals)— (a) in subsection (2) for the words preceding paragraph (a) there shall be substituted “ On a no gain/no loss disposal by any person (“the transferor”) ”, and (b) after that subsection there shall be added— (3) Where apart from this subsection— (a) a loss would accrue on the disposal of an asset, and (b) the sums allowable as a deduction in computing that loss would include an amount attributable to the application of the assumption in subsection (2) above on any no gain/no loss disposal made on or after 30th November 1993, those sums shall be determined as if that subsection had not applied on any such disposal made on or after that date and the loss shall be reduced accordingly or, if those sums are then equal to or less than the consideration for the disposal, the disposal shall be one on which neither a gain nor a loss accrues. (4) For the purposes of this section a no gain/no loss disposal is one which, by virtue of any enactment other than section 35(4), 53(1) or this section, is treated as a disposal on which neither a gain nor a loss accrues to the person making the disposal. (6) In section 110 of that Act (indexation allowance for share pools), after subsection (6) there shall be inserted— (6A) Where a disposal to a person acquiring or adding to a new holding is treated by virtue of any enactment as one on which neither a gain nor a loss accrues to the person making the disposal— (a) section 56(2) shall not apply to the disposal (and, accordingly, the amount of the consideration shall not be calculated on the assumption that a gain of an amount equal to the indexation allowance accrues to the person making the disposal), but (b) an amount equal to the indexation allowance on the disposal shall be added to the indexed pool of expenditure for the holding acquired or, as the case may be, held by the person to whom the disposal is made (and, where it is added to the indexed pool of expenditure for a holding so held, it shall be added after any increase required by subsection (8)(a) below). (7) Sections 103 (collective investment schemes, etc.), 111 (building society etc. shares), 182 to 184 (groups and associated companies) and 200 (oil industry assets) of that Act (all of which relate to indexation allowance) shall cease to have effect. (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11) This section shall have effect in relation to disposals made on or after 30th November 1993 and Schedule 12 to this Act (which gives transitional relief) shall have effect for the years 1993–94 and 1994–95.
Propose a change94 Set-off of pre-entry losses.
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Propose a change95 Commodity and financial futures.
(1) In section 143 of the Taxation of Chargeable Gains Act 1992 (commodity and financial futures and qualifying options), subsection (4) shall cease to have effect and for subsection (6) there shall be substituted the following subsections— (6) In any case where, in the course of dealing in commodity or financial futures, a person has entered into a futures contract and— (a) he has not closed out the contract (as mentioned in subsection (5) above), and (b) he becomes entitled to receive or liable to make a payment, whether under the contract or otherwise, in full or partial settlement of any obligations under the contract, then, for the purposes of this Act, he shall be treated as having disposed of an asset (namely, that entitlement or liability) and the payment received or made by him shall be treated as consideration for the disposal or, as the case may be, as incidental costs to him of making the disposal. (7) Section 46 shall not apply to obligations under— (a) a commodity or financial futures contract which is entered into by a person in the course of dealing in such futures on a recognised futures exchange; or (b) a commodity or financial futures contract to which an authorised person or listed institution is a party. (8) In this section— “authorised person” has the same meaning as in the Financial Services Act 1986, and “listed institution” has the same meaning as in section 43 of that Act. (2) This section shall apply in relation to contracts entered into on or after 30th November 1993.
Propose a change96 Cash-settled options.
(1) After section 144 of the Taxation of Chargeable Gains Act 1992 (options and forfeited deposits) there shall be inserted the following section— Cash-settled options. 144A (1) In any case where— (a) an option is exercised; and (b) the nature of the option (or its exercise) is such that the grantor of the option is liable to make, and the person exercising it is entitled to receive, a payment in full settlement of all obligations under the option, subsections (2) and (3) below shall apply in place of subsections (2) and (3) of section 144. (2) As regards the grantor of the option— (a) he shall be treated as having disposed of an asset (namely, his liability to make the payment) and the payment made by him shall be treated as incidental costs to him of making the disposal; and (b) the grant of the option and the disposal shall be treated as a single transaction and the consideration for the option shall be treated as the consideration for the disposal. (3) As regards the person exercising the option— (a) he shall be treated as having disposed of an asset (namely, his entitlement to receive the payment) and the payment received by him shall be treated as the consideration for the disposal; (b) the acquisition of the option (whether directly from the grantor or not) and the disposal shall be treated as a single transaction and the cost of acquiring the option shall be treated as expenditure allowable as a deduction under section 38(1)(a) from the consideration for the disposal; and (c) for the purpose of computing the indexation allowance (if any) on the disposal, the cost of the option shall be treated (notwithstanding paragraph (b) above) as incurred when the option was acquired. (4) In any case where subsections (2) and (3) above would apply as mentioned in subsection (1) above if the reference in that subsection to full settlement included a reference to partial settlement, those subsections and subsections (2) and (3) of section 144 shall both apply but with the following modifications— (a) for any reference to the grant or acquisition of the option there shall be substituted a reference to the grant or acquisition of so much of the option as relates to the making and receipt of the payment or, as the case may be, the sale or purchase by the grantor; and (b) for any reference to the consideration for, or the cost of or of acquiring, the option there shall be substituted a reference to the appropriate proportion of that consideration or cost. (5) In this section “appropriate proportion” means such proportion as may be just and reasonable in all the circumstances. (2) This section shall apply in relation to options granted on or after 30th November 1993.
Propose a change97 Settlements with foreign element: information.
(1) The Taxation of Chargeable Gains Act 1992 shall be amended as mentioned in subsections (2) to (4) below. (2) In Chapter II of Part III (settlements) the following section shall be inserted after section 98— Settlements with foreign element: information. 98A Schedule 5A to this Act (which contains general provisions about information relating to settlements with a foreign element) shall have effect. (3) The following Schedule shall be inserted after Schedule 5— SCHEDULE 5A Settlements with Foreign Element: Information Section 98A. 1 In this Schedule “the commencement day” means the day on which the Finance Act 1994 was passed. 2 (1) This paragraph applies if— (a) a settlement was created before 19th March 1991, (b) on or after the commencement day a person transfers property to the trustees otherwise than under a transaction entered into at arm’s length and otherwise than in pursuance of a liability incurred by any person before that day, (c) the trustees are not resident or ordinarily resident in the United Kingdom at the time the property is transferred, and (d) the transferor knows, or has reason to believe, that the trustees are not so resident or ordinarily resident. (2) Before the expiry of the period of twelve months beginning with the relevant day, the transferor shall deliver to the Board a return which— (a) identifies the settlement, and (b) specifies the property transferred, the day on which the transfer was made, and the consideration (if any) for the transfer. (3) For the purposes of sub-paragraph (2) above the relevant day is the day on which the transfer is made. 3 (1) This paragraph applies if a settlement is created on or after the commencement day, and at the time it is created— (a) the trustees are not resident or ordinarily resident in the United Kingdom, or (b) the trustees are resident or ordinarily resident in the United Kingdom but fall to be regarded for the purposes of any double taxation relief arrangements as resident in a territory outside the United Kingdom. (2) Any person who— (a) is a settlor in relation to the settlement at the time it is created, and (b) at that time fulfils the condition mentioned in sub-paragraph (3) below, shall, before the expiry of the period of three months beginning with the relevant day, deliver to the Board a return specifying the particulars mentioned in sub-paragraph (4) below. (3) The condition is that the person concerned is domiciled in the United Kingdom and is either resident or ordinarily resident in the United Kingdom. (4) The particulars are— (a) the day on which the settlement was created; (b) the name and address of the person delivering the return; (c) the names and addresses of the persons who are the trustees immediately before the delivery of the return. (5) For the purposes of sub-paragraph (2) above the relevant day is the day on which the settlement is created. 4 (1) This paragraph applies if a settlement is created on or after 19th March 1991, and at the time it is created— (a) the trustees are not resident or ordinarily resident in the United Kingdom, or (b) the trustees are resident or ordinarily resident in the United Kingdom but fall to be regarded for the purposes of any double taxation relief arrangements as resident in a territory outside the United Kingdom. (2) Any person who— (a) is a settlor in relation to the settlement at the time it is created, (b) at that time does not fulfil the condition mentioned in sub-paragraph (3) below, and (c) first fulfils that condition at a time falling on or after the commencement day, shall, before the expiry of the period of twelve months beginning with the relevant day, deliver to the Board a return specifying the particulars mentioned in sub-paragraph (4) below. (3) The condition is that the person concerned is domiciled in the United Kingdom and is either resident or ordinarily resident in the United Kingdom. (4) The particulars are— (a) the day on which the settlement was created; (b) the name and address of the person delivering the return; (c) the names and addresses of the persons who are the trustees immediately before the delivery of the return. (5) For the purposes of sub-paragraph (2) above the relevant day is the day on which the person first fulfils the condition as mentioned in paragraph (c) of that sub-paragraph. 5 (1) This paragraph applies if— (a) the trustees of a settlement become at any time (the relevant time) on or after the commencement day neither resident nor ordinarily resident in the United Kingdom, or (b) the trustees of a settlement, while continuing to be resident and ordinarily resident in the United Kingdom, become at any time (the relevant time) on or after the commencement day trustees who fall to be regarded for the purposes of any double taxation relief arrangements as resident in a territory outside the United Kingdom. (2) Any person who was a trustee of the settlement immediately before the relevant time shall, before the expiry of the period of twelve months beginning with the relevant day, deliver to the Board a return specifying— (a) the day on which the settlement was created, (b) the name and address of each person who is a settlor in relation to the settlement immediately before the delivery of the return, and (c) the names and addresses of the persons who are the trustees immediately before the delivery of the return. (3) For the purposes of sub-paragraph (2) above the relevant day is the day when the relevant time falls. 6 (1) Nothing in paragraph 2, 3, 4 or 5 above shall require information to be contained in the return concerned to the extent that— (a) before the expiry of the period concerned the information has been provided to the Board by any person in pursuance of the paragraph concerned or of any other provision, or (b) after the expiry of the period concerned the information falls to be provided to the Board by any person in pursuance of any provision other than the paragraph concerned. (2) Nothing in paragraph 2, 3, 4 or 5 above shall require a return to be delivered if— (a) before the expiry of the period concerned all the information concerned has been provided to the Board by any person in pursuance of the paragraph concerned or of any other provision, or (b) after the expiry of the period concerned all the information concerned falls to be provided to the Board by any person in pursuance of any provision other than the paragraph concerned. (4) In Schedule 5, paragraphs 11 to 14 (information) shall be omitted. (5) Subsection (4) above shall have effect where the relevant day falls on or after the day on which this Act is passed. (6) In the Table in section 98 of the Taxes Management Act 1970 (penalties) at the end of the second column there shall be inserted— “ Paragraphs 2 to 6 of Schedule 5A to the 1992 Act. ”
Propose a change98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Propose a change99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Propose a change100 Relevant age for purpose of appropriate percentage.
(1) Schedule 10 to the Taxes Act 1988 (profit sharing schemes) shall be amended as follows. (2) In paragraph 3 (the appropriate percentage for purposes of tax charge) the words from “In this paragraph” to the end of the paragraph shall be omitted. (3) The following paragraph shall be inserted after paragraph 3— 3A (1) In paragraph 3 above the reference to the relevant age shall be construed as follows. (2) Where the scheme is approved before 25th July 1991 and the event occurs before 30th November 1993, the relevant age is pensionable age. (3) Where— (a) the scheme is approved before 25th July 1991, (b) the event occurs on or after 30th November 1993, (c) the scheme defines the period of retention by reference to the age of 60 for both men and women, and (d) the reference to that age is incorporated in the definition by virtue of an alteration approved by the Board under paragraph 4 of Schedule 9 before the event occurs, the relevant age is 60. (4) Where— (a) the scheme is approved before 25th July 1991, (b) the event occurs on or after 30th November 1993, and (c) sub-paragraph (3) above does not apply, the relevant age is pensionable age. (5) Where the scheme is approved on or after 25th July 1991, the relevant age is the specified age.
Propose a change101 Acceptance of qualifying corporate bonds for shares.
(1) Schedule 10 to the Taxes Act 1988 (profit sharing schemes) shall be amended as mentioned in subsections (2) to (4) below. (2) In paragraph 1 (limitations on contractual obligations of participants) in sub-paragraph (1) the following paragraph shall be inserted after paragraph (c)— (cc) directing the trustees to accept an offer of a qualifying corporate bond, whether alone or with cash or other assets or both, for his shares if the offer forms part of a general offer which is made as mentioned in paragraph (c) above; or . (3) In paragraph 1 the following sub-paragraph shall be inserted after sub-paragraph (3)— (4) In sub-paragraph (1)(cc) above “qualifying corporate bond” shall be construed in accordance with section 117 of the 1992 Act. (4) The following paragraph shall be inserted after paragraph 5 (company reconstructions)— 5A (1) Paragraph 5(2) to (6) above apply where there occurs in relation to any of a participant’s shares (“the original holding”) a relevant transaction which would result in a new holding being equated with the original holding for the purposes of capital gains tax, were it not for the fact that what would be the new holding consists of or includes a qualifying corporate bond; and “relevant transaction” here means a transaction mentioned in Chapter II of Part IV of the 1992 Act. (2) In paragraph 5(2) to (6) above as applied by this paragraph— (a) references to a company reconstruction are to the transaction referred to in sub-paragraph (1) above; (b) references to the new holding are to what would be the new holding were it not for the fact mentioned in sub-paragraph (1) above; (c) references to the original holding shall be construed in accordance with sub-paragraph (1) above (and not paragraph 5(1)); (d) references to shares, in the context of the new holding, include securities and rights of any description which form part of the new holding. (3) In sub-paragraph (1) above “qualifying corporate bond” shall be construed in accordance with section 117 of the 1992 Act. (5) In paragraph 32(1) of Schedule 9 to the Taxes Act 1988 (requirements applicable to profit sharing schemes) for “or (c)” there shall be substituted “ , (c) or (cc) ”. (6) In paragraph 33(a) of Schedule 9 to the Taxes Act 1988 (which provides that the trust instrument must contain certain provision by reference to new shares within the meaning of paragraph 5 of Schedule 10) the reference to paragraph 5 of Schedule 10 shall be construed as including a reference to that paragraph as applied by paragraph 5A. (7) Subsections (2) and (3) above shall have effect where a direction is made on or after the day on which this Act is passed. (8) Subsection (4) above shall have effect where what would be the new holding comes into being on or after the day on which this Act is passed; but this is subject to subsection (13) below. (9) Subsection (5) above shall have effect in relation to any scheme not approved before the day on which this Act is passed. (10) In a case where— (a) a scheme is approved before the day on which this Act is passed, and (b) on or after that day the trust instrument is altered in such a way that paragraph 32(1) of Schedule 9 to the Taxes Act 1988 would be fulfilled if subsection (5) above applied in relation to the scheme, subsection (5) above shall apply in relation to the scheme with effect from the time the alteration is made. (11) Subsection (6) above shall have effect in relation to any scheme not approved before the day on which this Act is passed. (12) In a case where— (a) a scheme is approved before the day on which this Act is passed, and (b) on or after that day the trust instrument is altered in such a way that paragraph 33(a) of Schedule 9 to the Taxes Act 1988 would be fulfilled if subsection (6) above applied in relation to the scheme, subsection (6) above shall apply in relation to the scheme with effect from the time the alteration is made. (13) In a case where— (a) a scheme is approved before the day on which this Act is passed, (b) subsection (4) above would apply in relation to the scheme by virtue of subsection (8) above and apart from this subsection, and (c) the trust instrument is not altered as mentioned in subsection (12)(b) above before what would be the new holding comes into being, subsection (4) above shall not apply in relation to the scheme. (14) Subsection (6) above shall not imply a contrary intention for the purposes of section 20(2) of the Interpretation Act 1978 in its application to other references to paragraph 5 of Schedule 10 to the Taxes Act 1988.
Propose a change102 Employee share ownership trusts.
Schedule 13 to this Act (which contains provisions about employee share ownership trusts) shall have effect.
Propose a change103 The administrator.
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Propose a change104 Default of administrator etc.
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Propose a change105 Information.
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Propose a change106 False statements etc.
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Propose a change107 Discretionary approval.
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Propose a change108 Taxation of benefits of non-approved schemes.
(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7) Subject to subsection (8) below, in the Taxes Act 1988— (a) in section 188(1), paragraph (c), and (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (exemption from tax where recipient of benefit or lump sum chargeable to tax in respect of sums paid or treated as paid with a view to the provision of the benefit or lump sum) shall cease to have effect in relation to any benefit provided or lump sum paid on or after 1st December 1993. (8) The repeals made by subsection (7) above shall not have effect in relation to any benefit provided or lump sum paid on or after 1st December 1993 in pursuance of a scheme or arrangement entered into before that day unless the scheme or arrangement is varied on or after that day with a view to the provision of the benefit or lump sum.
Propose a change109 Annuities derived from personal pension schemes.
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Propose a change110 Annuities derived from retirement benefits schemes.
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Propose a change111 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Propose a change112 Distributions of authorised unit trusts.
Schedule 14 to this Act (distributions of authorised unit trusts) shall have effect.
Propose a change113 Umbrella schemes.
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Propose a change114 Assets and liabilities.
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Propose a change115 Currency contracts: net payments.
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Propose a change116 Currency contracts: matching.
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Propose a change117 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Propose a change118 Expenditure on machinery or plant: notification.
(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6) For the purposes of— (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) section 44(4) of the Finance Act 1971 (provision corresponding to section 25(1) applicable to earlier chargeable periods), expenditure which has not formed part of a person’s qualifying expenditure for a previous chargeable period may not form part of his qualifying expenditure for a subsequent chargeable period unless the machinery or plant on which the expenditure was incurred belongs to that person at some time in that subsequent period . . . (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Propose a change119 Transactions between connected persons.
(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) Paragraph 4(2) of Schedule 7 to the Capital Allowances Act 1968 (provision corresponding to section 158(2)) shall be assumed always to have had effect subject to amendments corresponding to those made to section 158(2) of the 1990 Act by section 117(2) and (3) of the Finance Act 1993.
Propose a change120 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Propose a change121 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Propose a change122 Sale and repurchase of securities: deemed manufactured payments.
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Propose a change