132 Charge on settlors of pre-19th March 1991 settlements.
(1) In paragraph 9 of Schedule 5 to the Taxation of Chargeable Gains Act 1992 (which sets out when a settlement is a qualifying settlement for the purposes of the attribution of gains to the settlor), after sub-paragraph (1) there shall be inserted the following sub-paragraphs—
(1A) Subject to sub-paragraph (1B) below, a settlement created before 19th March 1991 is a qualifying settlement for the purposes of section 86 and this Schedule in—
(a) the year 1999-00, and
(b) subsequent years of assessment.
(1B) Where a settlement created before 19th March 1991 is a protected settlement immediately after the beginning of 6th April 1999, that settlement shall be treated as a qualifying settlement for the purposes of section 86 and this Schedule in a year of assessment mentioned in sub-paragraph (1A)(a) or (b) above only if—
(a) any of the five conditions set out in subsections (3) to (6A) below becomes fulfilled as regards the settlement in that year; or
(b) any of those five conditions became so fulfilled in any previous year of assessment ending after 19th March 1991.
(2) Sub-paragraph (2) of that paragraph shall not have effect for the purpose of determining whether any settlement is a qualifying settlement in the year 1999-00 or any subsequent year of assessment.
(3) After sub-paragraph (6) of that paragraph there shall be inserted the following sub-paragraph—
(6A) The fifth condition is that the settlement ceases to be a protected settlement at any time on or after 6th April 1999.
(4) After sub-paragraph (10) of that paragraph there shall be inserted the following sub-paragraphs—
(10A) Subject to sub-paragraph (10B) below, a settlement is a protected settlement at any time in a year of assessment if at that time the beneficiaries of that settlement are confined to persons falling within some or all of the following descriptions, that is to say—
(a) children of a settlor or of a spouse of a settlor who are under the age of eighteen at that time or who were under that age at the end of the immediately preceding year of assessment;
(b) unborn children of a settlor, of a spouse of a settlor, or of a future spouse of a settlor;
(c) future spouses of any children or future children of a settlor, a spouse of a settlor or any future spouse of a settlor;
(d) a future spouse of a settlor;
(e) persons outside the defined categories.
(10B) For the purposes of sub-paragraph (10A) above a person is outside the defined categories at any time if, and only if, there is no settlor by reference to whom he is at that time a defined person in relation to the settlement for the purposes of paragraph 2(1) above.
(10C) For the purposes of sub-paragraph (10A) above a person is a beneficiary of a settlement if—
(a) there are any circumstances whatever in which relevant property which is or may become comprised in the settlement is or will or may become applicable for his benefit or payable to him;
(b) there are any circumstances whatever in which relevant income which arises or may arise under the settlement is or will or may become applicable for his benefit or payable to him;
(c) he enjoys a benefit directly or indirectly from any relevant property comprised in the settlement or any relevant income arising under the settlement.
(10D) In sub-paragraph (10C) above—
“relevant property” means property originating from a settlor; and
“relevant income” means income originating from a settlor.
(5) In construing section 86(1)(e) of the Taxation of Chargeable Gains Act 1992 (which specifies the amount by reference to which a charge arises under that section) as regards a particular year of assessment and in relation to a settlement created before 19th March 1991 which—
(a) is a qualifying settlement in the year 1999-00, but
(b) was not a qualifying settlement in any earlier year of assessment,
no account shall be taken of disposals made before 6th April 1999 (whether for the purpose of arriving at gains or for the purpose of arriving at losses).
(6) Schedule 23 (which makes transitional provision in connection with the coming into force of this section) shall have effect.
(1) After section 101 of the Taxation of Chargeable Gains Act 1992, there shall be inserted the following section—
Transfer within group to investment trust.
101A (1) This section applies where—
(a) an asset has been disposed of to a company (the “acquiring company") and the disposal has been treated by virtue of section 171(1) as giving rise to neither a gain nor a loss,
(b) at the time of the disposal the acquiring company was not an investment trust, and
(c) the conditions set out in subsection (2) below are satisfied by the acquiring company.
(2) Those conditions are satisfied by the acquiring company if—
(a) it becomes an investment trust for an accounting period beginning not more than 6 years after the time of the disposal,
(b) at the beginning of that accounting period, it owns, otherwise than as trading stock—
(i) the asset, or
(ii) property to which a chargeable gain has been carried forward from the asset on a replacement of business assets,
(c) it has not been an investment trust for any earlier accounting period beginning after the time of the disposal, and
(d) at the time at which it becomes an investment trust, there has not been an event by virtue of which it falls by virtue of section 179(3) or 101C(3) to be treated as having sold, and immediately reacquired, the asset at the time specified in subsection (3) below.
(3) The acquiring company shall be treated for all the purposes of this Act as if immediately after the disposal it had sold, and immediately reacquired, the asset at its market value at that time.
(4) Any chargeable gain or allowable loss which, apart from this subsection, would accrue to the acquiring company on the sale referred to in subsection (3) above shall be treated as accruing to it immediately before the end of the last accounting period to end before the beginning of the accounting period for which the acquiring company becomes an investment trust.
(5) For the purposes of this section a chargeable gain is carried forward from an asset to other property on a replacement of business assets if—
(a) by one or more claims under sections 152 to 158, the chargeable gain accruing on a disposal of the asset is reduced, and
(b) as a result an amount falls to be deducted from the expenditure allowable in computing a gain accruing on the disposal of the other property.
(6) For the purposes of this section an asset acquired by the acquiring company shall be treated as the same as an asset owned by it at a later time if the value of the second asset is derived in whole or in part from the first asset; and, in particular, assets shall be so treated where—
(a) the second asset is a freehold and the first asset was a leasehold; and
(b) the lessee has acquired the reversion.
(7) Where under this section a company is to be treated as having disposed of and reacquired an asset—
(a) all such recomputations of liability in respect of other disposals, and
(b) all such adjustments of tax, whether by way of assessment or by way of discharge or repayment of tax,
as may be required in consequence of the provisions of this section shall be carried out.
(8) Notwithstanding any limitation on the time for making assessments, any assessment to corporation tax chargeable in consequence of this section may be made at any time within 6 years after the end of the accounting period referred to in subsection (2)(a) above.
(2) In section 179 of that Act (company ceasing to be a member of a group), after subsection (2B) there shall be inserted the following subsection—
(2C) This section shall not have effect as respects any asset if, before the time when the chargeable company ceases to be a member of the group or, as the case may be, the second group, an event has already occurred by virtue of which the company falls by virtue of section 101A(3) to be treated as having sold and immediately reacquired the asset at the time specified in subsection (3) below.
(3) Subsections (1) and (2) above apply to any company which becomes an investment trust for an accounting period beginning on or after 17th March 1998.
134 Transfer of company’s assets to venture capital trust.
(1) In subsection (4) of section 139 of the Taxation of Chargeable Gains Act 1992 (reconstruction or amalgamation involving transfer of a business), after “investment trust" there shall be inserted “ or a venture capital trust. ”
(2) After the section 101A of that Act inserted by section 133 above there shall be inserted the following section—
Transfer of company’s assets to venture capital trust.
101B (1) Where section 139 has applied on the transfer of a company’s business (in whole or in part) to a company which at the time of the transfer was not a venture capital trust, then if—
(a) at any time after the transfer the company becomes a venture capital trust by virtue of an approval for the purposes of section 842AA of the Taxes Act; and
(b) at the time as from which the approval has effect the company still owns any of the assets of the business transferred,
the company shall be treated for all the purposes of this Act as if immediately after the transfer it had sold, and immediately reacquired, the assets referred to in paragraph (b) above at their market value at that time.
(2) Any chargeable gain or allowable loss which, apart from this subsection, would accrue to the company on the sale referred to in subsection (1) above shall be treated as accruing to the company immediately before the time mentioned in subsection (1)(b) above.
(3) This section does not apply if at the time mentioned in subsection (1)(b) above there has been an event by virtue of which the company falls by virtue of section 101(1) to be treated as having sold, and immediately reacquired, the assets immediately after the transfer referred to in subsection (1) above.
(4) Notwithstanding any limitation on the time for making assessments, any assessment to corporation tax chargeable in consequence of this section may, in a case in which the approval mentioned in subsection (1)(a) above has effect as from the beginning of an accounting period, be made at any time within 6 years after the end of that accounting period.
(5) Where under this section a company is to be treated as having disposed of, and reacquired, an asset of a business, all such recomputations of liability in respect of other disposals and all such adjustments of tax, whether by way of assessment or by way of discharge or repayment of tax, as may be required in consequence of the provisions of this section shall be carried out.
(3) After subsection (1A) of section 101 of that Act there shall be inserted the following subsection—
(1B) This section does not apply if at the time at which the company becomes an investment trust there has been an event by virtue of which it falls by virtue of section 101B(1) to be treated as having sold, and immediately reacquired, the assets immediately after the transfer referred to in subsection (1) above.
(4) Subsection (1) above applies to transfers made on or after 17th March 1998.
(5) Subsections (2) and (3) above apply to a company in respect of which an approval for the purposes of Part 6 of the Income Tax Act 2007 (venture capital trusts) has effect as from a time falling on or after 17th March 1998.
135 Transfer within group to venture capital trust.
(1) In section 171 of the Taxation of Chargeable Gains Act 1992 (transfers within a group), after the word “or" at the end of paragraph (c) of subsection (2) there shall be inserted the following paragraph—
(cc) a disposal by or to a venture capital trust; or
(2) After the section 101B of that Act inserted by section 134 above there shall be inserted the following section—
Transfer within group to venture capital trust.
101C (1) This section applies where—
(a) an asset has been disposed of to a company (the “acquiring company") and the disposal has been treated by virtue of section 171(1) as giving rise to neither a gain nor a loss,
(b) at the time of the disposal the acquiring company was not a venture capital trust, and
(c) the conditions set out in subsection (2) below are satisfied by the acquiring company.
(2) Those conditions are satisfied by the acquiring company if—
(a) it becomes a venture capital trust by virtue of an approval having effect as from a time (the “time of approval") not more than 6 years after the time of the disposal,
(b) at the time of approval the company owns, otherwise than as trading stock—
(i) the asset, or
(ii) property to which a chargeable gain has been carried forward from the asset on a replacement of business assets,
(c) it has not been a venture capital trust at any earlier time since the time of the disposal, and
(d) at the time of approval, there has not been an event by virtue of which it falls by virtue of section 179(3) or 101A(3) to be treated as having sold, and immediately reacquired, the asset at the time specified in subsection (3) below.
(3) The acquiring company shall be treated for all the purposes of this Act as if immediately after the disposal it had sold, and immediately reacquired, the asset at its market value at that time.
(4) Any chargeable gain or allowable loss which, apart from this subsection, would accrue to the acquiring company on the sale referred to in subsection (3) above shall be treated as accruing to it immediately before the time of approval.
(5) Subsections (5) to (7) of section 101A apply for the purposes of this section as they apply for the purposes of that section.
(6) Notwithstanding any limitation on the time for making assessments, any assessment to corporation tax chargeable in consequence of this section may, in a case in which the time of approval is the time at which an accounting period of the company begins, be made at any time within 6 years after the end of that accounting period.
(7) Any reference in this section to an approval is a reference to an approval for the purposes of section 842AA of the Taxes Act.
(3) In section 179 of that Act (company ceasing to be a member of a group), after the subsection (2C) inserted by section 133 above there shall be inserted the following subsection—
(2D) This section shall not have effect as respects any asset if, before the time when the chargeable company ceases to be a member of the group or, as the case may be, the second group, an event has already occurred by virtue of which the company falls by virtue of section 101C(3) to be treated as having sold and immediately reacquired the asset at the time specified in subsection (3) below.
(4) Subsection (1) above applies to disposals made on or after 17th March 1998.
(5) Subsections (2) and (3) above apply to a company in respect of which an approval for the purposes of Part 6 of the Income Tax Act 2007 (venture capital trusts) has effect as from a time falling on or after 17th March 1998.
(1) In section 170(9) of the Taxation of Chargeable Gains Act 1992 (meaning of “company” in sections 170 to 181), after the word “and" at the end of paragraph (c) there shall be inserted the following paragraph—
(cc) an incorporated friendly society within the meaning of the Friendly Societies Act 1992; and
.
(2) In subsection (2) of section 171 of that Act (transfers within a group), after the word “or" at the end of the paragraph (cc) inserted by section 135 above there shall be inserted the following paragraph—
(cd) a disposal by or to a qualifying friendly society; or
(3) After subsection (4) of that section there shall be inserted the following subsection—
(5) In subsection (2)(cd) above “qualifying friendly society” means a company which is a qualifying society for the purposes of section 461B of the Taxes Act (incorporated friendly societies entitled to exemption from income tax and corporation tax on certain profits).
(4) Subsection (1) above applies for the purpose of determining, in relation to times on and after 17th March 1998, whether a friendly society is a company within the meaning of the provisions of sections 170 to 181 of the Taxation of Chargeable Gains Act 1992.
(5) Subsections (2) and (3) above apply in relation to disposals made on or after 17th March 1998.
(1) In section 179(2B) of the Taxation of Chargeable Gains Act 1992 (cases where there is a connection between groups successively left by a company)—
(a) in paragraph (b), for the words from “company which" to “its" there shall be substituted “ person or persons who control the company mentioned in paragraph (a) above or who have had it under their ”;
(b) in paragraph (c), for the words from “company which has" to “its" there shall be substituted “ person or persons who have, at any time in that period, had under their ”; and
(c) in that paragraph, for “fallen", wherever it occurs, there shall be substituted “ been a person falling ”.
(2) Subsection (1) above 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 17th March 1998.
(1) In Schedule 6 to the Taxation of Chargeable Gains Act 1992 (retirement relief etc.), paragraph 13(1) (amount available for relief: basic rule) shall have effect, in relation to qualifying disposals in a year of assessment specified in the first column of the following Table, as if—
(a) for the references to £250,000 there were substituted references to the amount specified in the second column of that Table; and
(b) for the reference to £1 million there were substituted a reference to the amount specified in the third column of that Table.
Table
Year | £250,000 | £1 million
1999-00 | £200,000 | £800,000
2000-01 | £150,000 | £600,000
2001-02 | £100,000 | £400,000
2002-03 | £50,000 | £200,000
(2) The following provisions, namely—
(a) section 163 of that Act (relief for disposals by individuals on retirement from family business),
(b) section 164 of that Act (other retirement relief), and
(c) Schedule 6 to that Act,
shall cease to have effect in relation to disposals in the year 2003-04 and subsequent years of assessment.
(3) In section 157 of that Act (trade carried on by family company), for the words “within the meaning of Schedule 6" there shall be substituted the words “ that is to say, a company the voting rights in which are exercisable, as to not less than 5 per cent., by him ”.
(4) In subsection (8) of section 165 of that Act (relief for gifts of business assets), for paragraph (a) there shall be substituted the following paragraphs—
(a) “personal company”, in relation to an individual, means a company the voting rights in which are exercisable, as to not less than 5 per cent., by that individual;
(aa) “holding company”, “trading company” and “trading group” have the meanings given by paragraph 22 of Schedule A1; and
.
(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6) Subsections (3) to (5) above have effect in relation to the year 2003-04 and subsequent years of assessment.
(1) The following provisions of the Taxation of Chargeable Gains Act 1992 shall cease to have effect, namely—
(a) Chapter IA of Part V (roll-over relief on re-investment); and
(b) sections 254 and 255 (relief for debts on qualifying corporate bonds).
(2) In subsection (1) above—
(a) paragraph (a) has effect in relation to acquisitions made on or after 6th April 1998; and
(b) paragraph (b) has effect in relation to loans made on or after 17th March 1998.
Schedule 25 to this Act (which makes provision about the designation of property of historic interest, etc. and about undertakings in relation to such property) shall have effect.
143 Removal of exemption for gifts for public benefit.
(1) Section 26 of the Inheritance Tax Act 1984 (gifts for public benefit) shall not apply to any transfer of value made on or after 17th March 1998.
(2) Accordingly, in that Act, in relation to any transfer of value made on or after 17th March 1998—
(a) in sections 23(5) and 29A(6) (gifts to charities and abatement of exemptions), for the words “25 or 26", in each place where they occur, there shall be substituted “ or 25 ”; and
(b) in section 29(5) (exemptions in loan cases), for “to 26", “25 or 26" and “25(2) and 26(7)" there shall be substituted, respectively, “ to 25 ”, “ or 25 ” and “ and 25(2) ”.
(3) In relation to any property becoming the property of any person on or after 17th March 1998, in section 56(4) and (7) of that Act (exclusion of exemptions in relation to the acquisition of reversionary interests), for the words “to 26", in each place where they occur, there shall be substituted “ to 25 ”.
(4) In section 76 of that Act (tax not charged on property becoming property held for charitable purposes etc.)—
(a) paragraph (d) of subsection (1) and subsection (2) shall cease to have effect, and the word “or” shall be inserted at the end of paragraph (b) of subsection (1);
(b) in subsection (3), for “to (d)" there shall be substituted “ to (c) ”; and
(c) in subsections (6) and (8), for the words “(c) or (d)", in each place where they occur, there shall be substituted “ or (c) ”.
(5) Subsection (4) above has effect in relation to property which ceases to be relevant property, or to be property to which any of sections 70 to 74 of the Inheritance Tax Act 1984 or paragraph 8 of Schedule 4 to that Act applies, on or after 17th March 1998.
(6) In relation to any property becoming the property of a body on a transfer of value made on or after 17th March 1998, in section 161(2)(b) of that Act (related property), for “25 or 26" there shall be substituted “ or 25 ”.
(7) In relation to any disposal on or after 17th March 1998, in section 258(2) of the Taxation of Chargeable Gains Act 1992 (gains on disposal of works of art etc.), in paragraph (a), for “1984 Act" there shall be substituted “ Inheritance Tax Act 1984 (“the 1984 Act") ”.
144 Maintenance funds for historic buildings, etc.
(1) In section 27 of the Inheritance Tax Act 1984 (exemption for transfers into maintenance funds for historic buildings etc.), at the beginning of subsection (1) there shall be inserted “ Subject to subsection (1A) below, ” and after that subsection there shall be inserted the following subsection—
(1A) Subsection (1) above does not apply in the case of a direction given after the time of the transfer unless the claim for the direction (if it is not made before that time) is made no more than two years after the date of that transfer, or within such longer period as the Board may allow.
(2) This section has effect in relation to transfers of value made on or after 17th March 1998.
(1) Schedule 6A to the Finance Act 1994 (premiums liable to tax at the higher rate) shall be amended as follows.
(2) For paragraph 4 (travel insurance) there shall be substituted—
Travel insurance
4 (1) A premium under a taxable insurance contract falls within this paragraph if it is in respect of the provision of cover against travel risks for a person travelling.
(2) Where—
(a) a contract of insurance provides cover against both travel risks and risks other than travel risks,
(b) the premium attributable to the cover against travel risks does not exceed 10 per cent. of the total premium payable under the contract, and
(c) the contract does not provide cover for a person travelling against travel risks falling within two or more of the paragraphs of sub-paragraph (3) below,
the premium, so far as attributable to the cover against travel risks, does not fall within this paragraph by virtue of sub-paragraph (1) above.
(3) The travel risks mentioned in sub-paragraph (2)(c) above are—
(a) liability in respect of cancellation of travel or of accommodation arranged in connection with travel;
(b) delayed or missed departure;
(c) curtailment of travel or of the use of accommodation arranged in connection with travel;
(d) loss or delayed arrival of baggage;
(e) personal injury or illness or expenses of repatriation.
(4) A premium does not fall within this paragraph by virtue of sub-paragraph (1) above if it is payable under a taxable insurance contract relating to a motor vehicle and is attributable to cover of the kind generally known as—
(a) fully comprehensive,
(b) third party, fire and theft,
(c) third party, or
(d) roadside assistance,
or if it is payable under a taxable insurance contract relating to a caravan, boat or aircraft and is attributable to cover of a description broadly corresponding to any of those set out in paragraphs (a) to (d) above (so far as applicable) provided in respect of the caravan, boat or aircraft for a period of at least one month for the person travelling.
(5) In this paragraph—
“person travelling” includes a person intending to travel;
“travel risks” means risks associated with, or related to, travel or intended travel—
outside the United Kingdom,
by air within the United Kingdom,
within the United Kingdom in connection with travel falling within paragraph (a) or (b) above, or
which involves absence from home for at least one night,
or risks to which a person travelling may be exposed during, or at any place at which he may be in the course of, any such travel.
(3) Except as provided by subsection (4) below, subsections (1) and (2) above have effect in relation to a premium which falls to be regarded for the purposes of Part III of the Finance Act 1994 as received under a taxable insurance contract by an insurer on or after 1st August 1998.
(4) Subsections (1) and (2) above do not have effect in relation to a premium if the premium—
(a) is in respect of a contract made before 1st August 1998; and
(b) falls, by virtue of regulations under section 68 of the Finance Act 1994 (special accounting scheme), to be regarded for the purposes of Part III of that Act as received under the contract by the insurer on a date before 1st February 1999.
(5) In the application of sections 67A to 67C of the Finance Act 1994 in relation to the increase in insurance premium tax effected by this section and the exception from that increase—
(a) the announcement relating to that increase, as described in section 67A(1), and to that exception, as described in section 67B(1), shall be taken to have been made on 17th March 1998;
(b) “the date of the change” is 1st August 1998; and
(c) “the concessionary date” is 1st February 1999.
(1) Section 52A of the Finance Act 1994 (certain fees to be treated as premiums under higher rate contracts) shall be amended as follows.
(2) In subsection (5) (which defines a “taxable intermediary" as a person falling within subsection (6) of that section etc) after “subsection (6)" there shall be inserted “ or (6A) ”.
(3) For subsections (6) and (7) there shall be substituted—
(6) A person falls within this subsection if the higher rate contract mentioned in subsection (1) above falls within paragraph 2 or 3 of Schedule 6A to this Act (motor cars or motor cycles, or relevant goods) and the person is—
(a) within the meaning of the paragraph in question, a supplier of motor cars or motor cycles or, as the case may be, of relevant goods; or
(b) a person connected with a person falling within paragraph (a) above; or
(c) a person who in the course of his business pays—
(i) the whole or any part of the premium received under that contract, or
(ii) a fee connected with the arranging of that contract,
to a person falling within paragraph (a) or (b) above.
(6A) A person falls within this subsection if the higher rate contract mentioned in subsection (1) above falls within paragraph 4 of Schedule 6A to this Act (travel insurance) and the person is—
(a) the insurer under that contract; or
(b) a person through whom that contract is arranged in the course of his business; or
(c) a person connected with the insurer under that contract; or
(d) a person connected with a person falling within paragraph (b) above; or
(e) a person who in the course of his business pays—
(i) the whole or any part of the premium received under that contract, or
(ii) a fee connected with the arranging of that contract,
to a person falling within any of paragraphs (a) to (d) above.
(4) In subsection (9) (definitions) the definition of “tour operator" and “travel agent" shall be omitted.
(5) The amendments made by this section have effect in relation to payments in respect of fees charged on or after 1st August 1998.
(1) Section 55 of the Finance Act 1963 and section 4 of the Finance Act Northern Ireland) 1963 (both of which provide for rates of stamp duty on conveyance or transfer on sale) shall each be amended as follows.
(2) In subsection (1)(d) (rate of £1.50p for every £100 etc where consideration does not exceed £500,000 and the instrument is certified at that amount) for “£1.50p" there shall be substituted “ £2 ”.
(3) In subsection (1)(e) (rate of £2 for every £100 etc) for “£2" there shall be substituted “ £3 ”.
(4) This section shall apply to instruments executed on or after 24th March 1998, except where the instrument in question is executed in pursuance of a contract made on or before 17th March 1998.
(5) This section shall be deemed to have come into force on 24th March 1998.
(1) Where an instrument which is chargeable with stamp duty in Great Britain and in Northern Ireland has been stamped in either of those parts of the United Kingdom—
(a) the instrument shall, to the extent of the duty it bears, be deemed to be stamped in the other part of the United Kingdom, but
(b) if the stamp duty chargeable on the instrument in that other part of the United Kingdom exceeds the stamp duty chargeable on the instrument in the part of the United Kingdom in which it has been stamped, the instrument shall not be deemed to have been duly stamped in that other part of the United Kingdom unless and until stamped in accordance with the law which has effect in that part of the United Kingdom with a stamp denoting an amount equal to the excess.
(2) An instrument which, by virtue of paragraph (b) of subsection (1) above, is not deemed to have been duly stamped in a part of the United Kingdom unless and until stamped with a stamp denoting an amount equal to the excess mentioned in that paragraph may, notwithstanding anything in section 15 of the Stamp Act 1891, be stamped with such a stamp without payment of any penalty at any time within 30 days after it has first been received in that part of the United Kingdom.
(3) In section 22 of the Stamp Duties Management Act 1891 (discontinuance of dies) for the words from “London" to “Gazettes" there shall be substituted “ London, Edinburgh and Belfast Gazettes ”.
(4) Section 29 of the Government of Ireland Act 1920 (the provisions of which are either spent or re-enacted with modifications in subsection (1) above) shall cease to have effect.
(5) The saving in Part I of Schedule 6 to the Northern Ireland Constitution Act 1973 (repeals) for orders made under section 69 of the Government of Ireland Act 1920 shall cease to have effect in relation to Part IV of the Government of Ireland (Adaptation of the Taxing Acts) Order 1922 (the provisions of which are either spent or re-enacted with modifications in subsections (2) and (3) above).
151 Depositary receipts and clearance services: exchanges of shares.
(1) In section 95 of the Finance Act 1986 (depositary receipts; exceptions) in subsection (3) (exchanges) after paragraph (b) there shall be added— “ and the shares in company Y are held under a depositary receipt scheme. ”
(2) At the end of that section there shall be added—
(5) For the purposes of subsection (3) above, the cases where shares are held under a depositary receipt scheme are those cases where, in pursuance of an arrangement,—
(a) a depositary receipt for chargeable securities has been, or is to be, issued by a person falling within section 93(2) above in respect of the shares in question or shares of the same kind and amount; and
(b) the shares in question are held by that person, or by a person whose business is or includes holding chargeable securities as nominee or agent for that person, towards the eventual satisfaction of the entitlement of the receipt’s holder to receive chargeable securities.
(6) Where an arrangement is entered into under which—
(a) shares in a company (company X) are issued to persons in respect of their holdings of shares in another company (company Y), and
(b) the shares in company Y are cancelled,
the issue shall be treated for the purposes of subsection (3) above as an issue by company X in exchange for the shares in company Y.
(7) In this section “depositary receipt for chargeable securities” has the same meaning as in section 93 above (see section 94 above).
(3) In section 97 of the Finance Act 1986 (clearance services: exceptions) in subsection (4) (exchanges) after paragraph (b) there shall be added— “ and the shares in company Y are held under a clearance services scheme. ”
(4) At the end of that section there shall be added—
(6) For the purposes of subsection (4) above, the cases where shares are held under a clearance services scheme are those cases where—
(a) an arrangement falling within paragraph (a) of subsection (1) of section 96 above has been entered into; and
(b) in pursuance of that arrangement, the shares are held by the person referred to in that paragraph as A or by a person whose business is or includes holding chargeable securities as nominee for that person.
(7) Where an arrangement is entered into under which—
(a) shares in a company (company X) are issued to persons in respect of their holdings of shares in another company (company Y), and
(b) the shares in company Y are cancelled,
the issue shall be treated for the purposes of subsection (4) above as an issue by company X in exchange for the shares in company Y.
(5) In section 99(10) of the Finance Act 1986 (which makes provision in relation to the interpretation of “chargeable securities” in sections 93, 94, 96 and 97A)—
(a) after “94," there shall be inserted “ 95, ”; and
(b) after “96" there shall be inserted “ , 97 ”.
(6) This section applies where the issue by company X referred to in section 95(3) or (6) or 97(4) or (7) of the Finance Act 1986 is an issue on or after 1st May 1998.
(1) Paragraph 3A of Schedule 3 to the Oil Taxation Act 1975 (market value of light gases) shall have effect, and be deemed always to have had effect, with the insertion of the following sub-paragraph after sub-paragraph (3)—
(3A) The circumstances referred to in sub-paragraph (1) above include—
(a) the timing of the making, and of any subsequent variations, of the actual contract or other arrangements under which the disposal or appropriation was made;
(b) the terms of that contract or, as the case may be, of those arrangements, and the terms of any such variations; and
(c) the extent to which the circumstances to which regard is to be had by virtue of paragraphs (a) and (b) above are circumstances that might reasonably have been expected to exist in the case of a contract satisfying the conditions specified in sub-paragraph (2) above.
(2) Paragraph 12 of Schedule 2 to the Oil Taxation Act 1983 (purchase of oil at place of extraction) shall have effect and, in relation to light gases disposed of or appropriated at any time on or after 3rd May 1994, be deemed to have had effect—
(a) with the substitution, for the words “paragraphs (a) to (c)” in sub-paragraph (2), of the words “paragraphs (a) to (cb)"; and
(b) with the substitution for the words from “2(5)(b)" to “length),” in sub-paragraph (5) of the words “2(5)(b) or (ca) of the principal Act (oil disposed of otherwise than in sales at arm’s length),".
(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
154 Repeal of Customs Duties (Dumping and Subsidies) Act 1969.
The Customs Duties (Dumping and Subsidies) Act 1969 (which confers powers on the Secretary of State, exercisable in accordance with section 6(5) of the Finance Act 1978, to charge duties in respect of dumping and to offset subsidies) shall cease to have effect.
158 Treasury’s position regarding their own securities.
(1) This section applies to securities issued by or on behalf of the Treasury, here referred to as Treasury securities.
(2) Any powers which relate to Treasury securities and which are conferred on the Treasury in a capacity other than issuer may be exercised by them, and no rule of law preventing a person contracting with himself shall prevent them exercising the powers.
(3) The powers referred to in subsection (2) above include powers to acquire, hold and transfer securities and to make agreements with regard to them.
(4) If Treasury securities are acquired under powers conferred on the Treasury, until they are transferred or redeemed they shall be treated as held by the persons for the time being constituting the Treasury.
(1) In section 8 of the Treasury Bills Act 1877 (mode of issue of Treasury bills) the following shall be substituted for paragraph (1)—
(1) Treasury bills shall be issued by the Treasury (either directly or through such agent as the Treasury think fit).
(2) This section shall apply in relation to issues made on or after such day as the Treasury may appoint by order made by statutory instrument.
(1) Subject to the following provisions of this section, any gilt-edged security issued before 6th April 1998 without FOTRA conditions shall be treated in relation to times on or after that date as if—
(a) it were a security issued with the post-1996 Act conditions; and
(b) those conditions had been authorised in relation to the issue of that security by virtue of section 22 of the Finance (No. 2) Act 1931.
(2) Where a gilt-edged security falls to be treated as mentioned in subsection (1) above that treatment shall have effect—
(a) for the purposes of Chapter 2 of Part 12 of the Income Tax Act 2007 (accrued income profits) in relation only to accrued income profits which a person is treated as making under section 628(5) or 630(2) of that Act on or after 6th April 1998;
(b) for the other purposes of the Tax Acts, in relation only to payments of interest falling due on or after that date; and
(c) for the purposes of the Inheritance Tax Act 1984, in relation only to a determination of whether property is excluded property at a time falling on or after that date.
(3) No charge to tax shall be treated as arising under section 65 of the Inheritance Tax Act 1984 (property becoming excluded property) by reason only of the coming into force of this section.
(4) In this section “FOTRA conditions” means any such conditions about exemption from taxation as are authorised in relation to the issue of a gilt-edged security by virtue of section 22 of the Finance (No. 2) Act 1931.
(5) In this section “the post-1996 Act conditions” means the FOTRA conditions with which 7.25% Treasury Stock 2007 was first issued by virtue of section 22 of the Finance (No. 2) Act 1931.
(6) In this section “gilt-edged securities” means any securities which are gilt-edged securities for the purposes of the Taxation of Chargeable Gains Act 1992.
(7) This section does not apply to any 3½% War Loan 1952 Or After which was issued with a condition authorised by virtue of section 47 of the Finance (No. 2) Act 1915.
162 Accounting statements relating to National Savings.
(1) Subject to subsection (2) below, in each of the following provisions (which provide for annual statements of account as respects years ending with 31st December to be prepared in relation to deposits with the National Savings Bank), that is to say—
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b) section 120(4) of the Finance Act 1980 (investment deposits),
for “31st December" there shall be substituted “ 31st March ”.
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) In section 19(2) of the National Savings Bank Act 1971 (delivery of statement under section 19(1) to the Comptroller and Auditor General), for the words from “before the end of May" to “that year" there shall be substituted “ before the end of August next following the end of any period for which a statement falls to be prepared under subsection (1) above, transmit the statement for that period ”.
(4) In section 20 of that Act (adjustment of balances)—
(a) for “year ending with 31st December" there shall be substituted “ period as respects which a statement falls to be prepared under section 19(1) of this Act ”;
(b) for the words “the year", in each place where they occur, there shall be substituted “ that period ”; and
(c) for “any such year" there shall be substituted “ any such period ”.
(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
163 Adoption of single currency by other member States.
(1) The Treasury may, to such extent as appears to them appropriate in connection with any of the matters falling within subsection (2) below, by regulations modify the application and effect as respects—
(a) transactions in a currency other than sterling,
(b) instruments denominated in such a currency, and
(c) the bringing into account of amounts expressed in, or by reference to, such a currency,
of any enactment or subordinate legislation relating to any matter for which the Commissioners for Her Majesty’s Revenue and Customs are responsible and to which section 7 of the Commissioners for Revenue and Customs Act 2005 (former Inland Revenue matters) applies.
(2) The matters falling within this subsection are—
(a) the adoption or proposed adoption by other member States of the single currency; and
(b) any transitional measures or other arrangements applying or likely to apply in relation to the adoption of the single currency by other member States.
(3) Without prejudice to the generality of subsection (1) above, the power conferred by that subsection includes power by regulations to provide—
(a) for liabilities to pay amounts to the Commissioners of Inland Revenue under any enactment or subordinate legislation relating to taxation to be capable of being discharged, in accordance with the regulations, by payments in the single currency;
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) The power to make regulations under this section includes—
(a) power to impose charges to taxation;
(b) power to amend or repeal any enactment; and
(c) power to make such incidental, supplemental, consequential and transitional provision as appears to the Treasury to be appropriate.
(5) The power to make regulations under this section shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.
(6) In this section—
“enactment” includes any enactment contained in this Act (other than this section) and any enactment passed after this Act;
“other member State” means a member State other than the United Kingdom;
“subordinate legislation” has the same meaning as in the Interpretation Act 1978.
(7) References in this section to the adoption of the single currency are references to the adoption of the single currency in accordance with the Treaty establishing the European Community, and the reference in subsection (3)(a) above to that currency shall be construed accordingly.
(1) The enactments mentioned in Schedule 27 to this Act (which include spent provisions) are hereby repealed to the extent specified in the third column of that Schedule.
(2) The repeals specified in that Schedule have effect subject to the commencement provisions and savings contained or referred to in the notes set out in that Schedule.
Section 16.
Meaning of “the 1994 Act"
1 In this Schedule “the 1994 Act” means the Vehicle Excise and Registration Act 1994.
Certificates as to reduced pollution
2 The following section shall be inserted after section 61A of the 1994 Act—
Certificates as to reduced pollution.
61B (1) The Secretary of State may by regulations make provision—
(a) for the making of an application to the Secretary of State for the issue in respect of an eligible vehicle of a reduced pollution certificate;
(b) for the manner in which any determination of whether to issue such a certificate on such an application is to be made;
(c) for the examination of an eligible vehicle, for the purposes of the determination mentioned in paragraph (b), by such persons, and in such manner, as may be prescribed;
(d) for a fee to be paid for such an examination;
(e) for a reduced pollution certificate to be issued in respect of an eligible vehicle if, and only if, it is found, on a prescribed examination, that the reduced pollution requirements are satisfied with respect to it;
(f) for the form and content of such a certificate;
(g) for such a certificate to be valid for such period as the Secretary of State may determine;
(h) for the revocation, cancellation or surrender of such a certificate before the end of any such period;
(i) for the Secretary of State to be entitled to require the return to him of such a certificate that has been revoked;
(j) for the fact that such a certificate is, or is not, in force in respect of a vehicle to be treated as having conclusive effect for the purposes of this Act as to such matters as may be prescribed;
(k) for the Secretary of State to be entitled, in prescribed cases, to require the production of such a certificate before making a determination for the purposes of section 7(5); and
(l) for appeals against any determination not to issue such a certificate.
(2) For the purposes of this Act, the reduced pollution requirements are satisfied with respect to a vehicle at any time if, as a result of adaptations of the prescribed description having been made to the vehicle after the prescribed date, the prescribed requirements are satisfied at that time with respect to the rate and content of the vehicle’s emissions.
(3) Without prejudice to the generality of subsection (1), for the purpose of enabling the Secretary of State to determine whether the reduced pollution requirements are satisfied at any time with respect to a vehicle in respect of which a reduced pollution certificate is in force, regulations under this section—
(a) may authorise such person as may be prescribed to require the vehicle to be re-examined in accordance with the regulations;
(b) may provide for a fee to be paid for such a re-examination;
(c) may provide for the refund of such a fee if it is found, on the prescribed re-examination, that the reduced pollution requirements are satisfied with respect to the vehicle.
(4) In this section “eligible vehicle” means—
(a) a bus, as defined in paragraph 3(2) of Schedule 1;
(b) a vehicle to which paragraph 6 of Schedule 1 applies;
(c) a haulage vehicle, as defined in paragraph 7(2) of Schedule 1, other than a showman’s vehicle; or
(d) a goods vehicle, other than one falling within paragraph 9(2) or 11(2) of Schedule 1.
(5) In this section “prescribed” means prescribed by regulations made by the Secretary of State.
Buses
3 (1) In sub-paragraph (1) of paragraph 3 of Schedule 1 to the 1994 Act (annual rates of vehicle excise duty for buses), after “bus" there shall be inserted “ with respect to which the reduced pollution requirements are not satisfied ”.
(2) After that sub-paragraph there shall be inserted the following sub-paragraph—
(1A) The annual rate of vehicle excise duty applicable to a bus with respect to which the reduced pollution requirements are satisfied is the general rate specified in paragraph 1(2).
(3) In sub-paragraph (6) of that paragraph, for “which falls" there shall be substituted
which—
(a) is not a vehicle with respect to which the reduced pollution requirements are satisfied; and
(b) falls
.
Special vehicles
4 In paragraph 4(7) of that Schedule (annual rates of vehicle excise duty for special vehicles), for “which falls" there shall be substituted
which—
(a) is not a vehicle with respect to which the reduced pollution requirements are satisfied; and
(b) falls
.
Recovery vehicles
5 In paragraph 5(6) of that Schedule (annual rates of vehicle excise duty for recovery vehicles), for “which falls" there shall be substituted
which—
(a) is not a vehicle with respect to which the reduced pollution requirements are satisfied; and
(b) falls
.
Vehicles used for exceptional loads
6 (1) In paragraph 6 of that Schedule (annual rates of vehicle excise duty for vehicles used for exceptional loads), in sub-paragraph (2), for “the heavy tractive unit rate" there shall be substituted “ the rate specified in sub-paragraph (2A). ”
(2) After that sub-paragraph there shall be inserted the following sub-paragraph—
(2A) The rate referred to in sub-paragraph (2) is—
(a) in the case of a vehicle with respect to which the reduced pollution requirements are not satisfied, £5,170; and
(b) in the case of a vehicle with respect to which those requirements are satisfied, £4,670.
(3) Sub-paragraph (3A) of that paragraph shall cease to have effect.
Haulage vehicles
7 (1) In paragraph 7 of that Schedule (annual rates of vehicle excise duty for haulage vehicles), in sub-paragraph (1)(b), for “the general haulage vehicle rate" there shall be substituted “ the rate specified in sub-paragraph (3A) ”.
(2) In sub-paragraph (3) of that paragraph, for “which falls" there shall be substituted
which—
(a) is not a vehicle with respect to which the reduced pollution requirements are satisfied; and
(b) falls
.
(3) After that sub-paragraph there shall be inserted the following sub-paragraph—
(3A) The rate referred to in sub-paragraph (1)(b) is—
(a) in the case of a vehicle with respect to which the reduced pollution requirements are not satisfied, £350; and
(b) in the case of a vehicle with respect to which those requirements are satisfied, the general rate specified in paragraph 1(2).
(4) Sub-paragraphs (4), (5) and (6) of that paragraph shall cease to have effect.
Rigid goods vehicles
8 (1) In sub-paragraph (1) of paragraph 9 of that Schedule (annual rates of vehicle excise duty for rigid goods vehicles), after “which" there shall be inserted “ is not a vehicle with respect to which the reduced pollution requirements are satisfied and which ”.
(2) In sub-paragraph (3) of that paragraph, for the words from “which has" to the end of the sub-paragraph there shall be substituted
which—
(a) is not a vehicle with respect to which the reduced pollution requirements are satisfied,
(b) has a revenue weight exceeding 44,000 kilograms, and
(c) is not an island goods vehicle,
shall be £5,170.
(3) In sub-paragraph (4) of that paragraph, for “which falls" there shall be substituted
which—
(a) is not a vehicle with respect to which the reduced pollution requirements are satisfied; and
(b) falls
.
(4) Sub-paragraph (5) of that paragraph shall cease to have effect.
9 After that paragraph there shall be inserted the following paragraphs—
9A (1) This paragraph applies to a rigid goods vehicle which—
(a) is a vehicle with respect to which the reduced pollution requirements are satisfied;
(b) is not a vehicle for which the annual rate of vehicle excise duty is determined under paragraph 9(2); and
(c) has a revenue weight exceeding 3,500 kilograms.
(2) Subject to sub-paragraph (3), the annual rate of vehicle excise duty applicable to a rigid goods vehicle to which this paragraph applies shall be determined in accordance with the table set out in paragraph 9B by reference to—
(a) the revenue weight of the vehicle, and
(b) the number of axles on the vehicle.
(3) The annual rate of vehicle excise duty applicable to a rigid goods vehicle to which this paragraph applies which has a revenue weight exceeding 44,000 kilograms shall be £4,670.
9B That table is as follows—
Revenue weight of vehicle | Rate
(1) | (2) | (3) | (4) | (5)
Exceeding | Not Exceeding | Two axle vehicle | Three axle vehicle | Four or more axle vehicle
kgs | kgs | £ | £ | £
3,500 | 7,500 | 150 | 150 | 150
7,500 | 12,000 | 150 | 150 | 150
12,000 | 13,000 | 150 | 150 | 150
13,000 | 14,000 | 150 | 150 | 150
14,000 | 15,000 | 340 | 150 | 150
15,000 | 17,000 | 820 | 150 | 150
17,000 | 19,000 | 820 | 350 | 150
19,000 | 21,000 | 820 | 520 | 150
21,000 | 23,000 | 820 | 970 | 150
23,000 | 25,000 | 820 | 1,730 | 330
25,000 | 27,000 | 820 | 1,840 | 970
27,000 | 29,000 | 820 | 1,840 | 1,820
29,000 | 31,000 | 820 | 1,840 | 2,860
31,000 | 44,000 | 820 | 1,840 | 3,900
10 In paragraph 10 of that Schedule (the trailer supplement), in sub-paragraph (1), for “paragraph 9" there shall be substituted “ paragraphs 9 and 9A ”.
Tractive units
11 (1) In sub-paragraph (1) of paragraph 11 of that Schedule (annual rates of vehicle excise duty for tractive units), after “which" there shall be inserted “ is not a vehicle with respect to which the reduced pollution requirements are satisfied and which ”.
(2) In sub-paragraph (3) of that paragraph, for the words from “which has" to the end of the sub-paragraph there shall be substituted
which—
(a) is not a vehicle with respect to which the reduced pollution requirements are satisfied,
(b) has a revenue weight exceeding 44,000 kilograms, and
(c) is not an island goods vehicle,
shall be £5,170.
(3) In sub-paragraph (4) of that paragraph, for “which falls" there shall be substituted
which—
(a) is not a vehicle with respect to which the reduced pollution requirements are satisfied; and
(b) falls
.
(4) Sub-paragraph (5) of that paragraph shall cease to have effect.
12 After that paragraph there shall be inserted the following paragraphs—
11A (1) This paragraph applies to a tractive unit which—
(a) is a vehicle with respect to which the reduced pollution requirements are satisfied;
(b) is not a vehicle for which the annual rate of vehicle excise duty is determined under paragraph 11(2); and
(c) has a revenue weight exceeding 3,500 kilograms.
(2) Subject to sub-paragraph (3), the annual rate of vehicle excise duty applicable to a tractive unit to which this paragraph applies shall be determined, in accordance with the table set out in paragraph 11B, by reference to—
(a) the revenue weight of the tractive unit,
(b) the number of axles on the tractive unit, and
(c) the types of semi-trailers, distinguished according to the number of their axles, which are to be drawn by it.
(3) The annual rate of vehicle excise duty applicable to a tractive unit to which this paragraph applies which has a revenue weight exceeding 44,000 kilograms shall be £4,670.
11B That table is as follows—
Revenue weight of tractive unit | Rate for tractive unit with two axles | Rate of tractive unit with three or more axles
(1) | (2) | (3) | (4) | (5) | (6) | (7) | (8)
Exceeding | Not exceeding | Any no. of semi-trailer axles | 2 or more semi-trailer axles | 3 or more semi-trailer axles | Any no. of semi-trailer axles | 2 or more semi-trailer axles | 3 or more semi-trailer axles
kgs | kgs | £ | £ | £ | £ | £ | £
3,500 | 7,500 | 150 | 150 | 150 | 150 | 150 | 150
7,500 | 12,000 | 150 | 150 | 150 | 150 | 150 | 150
12,000 | 16,000 | 150 | 150 | 150 | 150 | 150 | 150
16,000 | 20,000 | 150 | 150 | 150 | 150 | 150 | 150
20,000 | 23,000 | 310 | 150 | 150 | 150 | 150 | 150
23,000 | 26,000 | 690 | 150 | 150 | 150 | 150 | 150
26,000 | 28,000 | 690 | 630 | 150 | 630 | 150 | 150
28,000 | 31,000 | 1,240 | 1,240 | 590 | 1,240 | 160 | 150
31,000 | 33,000 | 2,030 | 2,030 | 1,240 | 2,030 | 500 | 150
33,000 | 34,000 | 4,670 | 4,670 | 1,240 | 2,030 | 970 | 150
34,000 | 36,000 | 4,670 | 4,670 | 2,340 | 2,030 | 1,600 | 360
36,000 | 38,000 | 4,670 | 4,670 | 2,710 | 2,320 | 2,320 | 780
38,000 | 44,000 | 4,670 | 4,670 | 2,710 | 2,320 | 2,320 | 780
Other amendments
13 In section 15 of the 1994 Act (vehicles becoming chargeable to duty at higher rate), after subsection (2) there shall be inserted the following subsection—
(2A) For the purposes of subsection (1) a vehicle is also used so as to subject it to a higher rate if—
(a) the rate of vehicle excise duty paid on a vehicle licence taken out for the vehicle was the rate applicable to a vehicle of the same description with respect to which the reduced pollution requirements are satisfied, and
(b) while the licence is in force, the vehicle is used at a time when those requirements are not satisfied with respect to it.
14 In section 16 of the 1994 Act (exceptions from charge at higher rate in case of tractive units), at the beginning of subsection (1) there shall be inserted “Subject to subsection (9)" and after subsection (7) there shall be inserted the following subsections—
(8) This subsection applies to a tractive unit (“the relevant tractive unit”) in relation to which subsection (2), (4) or (6) applies if—
(a) the rate of duty paid on taking out the licence for the relevant tractive unit is the rate applicable to a tractive unit of the appropriate description with respect to which the reduced pollution requirements are satisfied; and
(b) while the licence is in force, the relevant tractive unit is used at a time when the reduced pollution requirements are not satisfied with respect to it.
(9) Where subsection (8) applies, subsection (1) does not prevent duty becoming payable under section 15 at the rate applicable to a tractive unit of the appropriate description with respect to which the reduced pollution requirements are not satisfied.
(10) In this section “the appropriate description” means the description mentioned in paragraph (b) of whichever of subsections (2), (4) and (6) applies in relation to the relevant tractive unit.
15 In section 45 of the 1994 Act (offences relating to false or misleading declarations and information), in subsections (3A) and (3B), after “section 61A" there shall be inserted “ or 61B ”.
16 (1) Paragraph 22 of Schedule 2 to that Act (exemption in relation to vehicle testing) shall be amended as follows.
(2) In sub-paragraph (1)—
(a) in paragraph (a), for “or a vehicle weight test" there shall be substituted “ , a vehicle weight test or a reduced pollution test ”; and
(b) in paragraph (b), for “a compulsory test or a vehicle weight test" there shall be substituted “ any such test ”.
(3) In sub-paragraph (2), after “vehicle weight test" there shall be inserted “ , a reduced pollution test ”.
(4) In sub-paragraph (2A), after “compulsory test", in each place it occurs, there shall be inserted “ or a reduced pollution test ”.
(5) In sub-paragraph (3), after “compulsory test" there shall be inserted “ , or a reduced pollution test, ”.
(6) After sub-paragraph (6A) there shall be inserted the following sub-paragraph—
(6AA) In this paragraph “a reduced pollution test” means any examination of a vehicle for which provision is made by regulations under section 61B of this Act.
(7) In sub-paragraph (6B), for “or vehicle weight test" there shall be substituted “ , a vehicle weight test or a reduced pollution test ”.
(8) In sub-paragraphs (8) and (9), the word “or” shall be inserted at the end of paragraphs (a) and (c) and after paragraph (c) there shall be inserted the following paragraph—
(d) a certificate issued by virtue of section 61B of this Act.
Commencement
17 (1) Subject to sub-paragraph (2) below, the preceding provisions of this Schedule shall come into force in relation to licences issued on or after such day as the Secretary of State may by order made by statutory instrument appoint; and different days may be appointed under this sub-paragraph for different purposes.
(2) Paragraphs 1, 2, 15 and 16 above come into force with the passing of this Act.
Section 20.
Alcoholic Liquor Duties Act 1979 (c.4)
1 In section 8 of the Alcoholic Liquor Duties Act 1979 (remission of duty in respect of spirits used for medical or scientific purposes) the following subsections shall be inserted after subsection (2)—
(3) Subsection (4) below applies if—
(a) spirits are received and delivered in accordance with subsection (1) above,
(b) they are not used as proposed, and
(c) it is not shown to the satisfaction of the Commissioners that they can be accounted for by natural waste or other legitimate cause.
(4) In such a case the Commissioners—
(a) may assess as being excise duty due from the person concerned an amount equal to the duty that would have been chargeable on the spirits if, at the time of delivery from warehouse, they had been delivered for home use and otherwise than in accordance with subsection (1) above, and
(b) may notify him or his representative accordingly.
2 In section 10 of the Alcoholic Liquor Duties Act 1979 (remission of duty on spirits for use in art or manufacture) the following subsections shall be inserted after subsection (2)—
(3) Subsection (4) below applies if—
(a) spirits are received and delivered in accordance with subsection (1) above,
(b) they are not used as proposed, and
(c) it is not shown to the satisfaction of the Commissioners that they can be accounted for by natural waste or other legitimate cause.
(4) In such a case the Commissioners—
(a) may assess as being excise duty due from the person concerned an amount equal to the duty that would have been chargeable on the spirits if, at the time of delivery from warehouse, they had been delivered for home use and otherwise than in accordance with subsection (1) above, and
(b) may notify him or his representative accordingly.
3 (1) Section 11 of the Alcoholic Liquor Duties Act 1979 (relief from duty on imported goods not for human consumption containing spirits) shall be amended as follows.
(2) At the beginning there shall be inserted “ (1) ”.
(3) At the end there shall be inserted—
(2) Subsection (3) below applies if—
(a) the Commissioners make a direction under subsection (1) above, but
(b) it turns out that the goods were for human consumption.
(3) In such a case the Commissioners—
(a) may assess as being excise duty due from the relevant person an amount equal to the duty that would have been chargeable on the goods if the direction had not been made, and
(b) may notify him or his representative accordingly.
(4) The reference in subsection (3) above to the relevant person is to the importer or (if different) the person who sought the direction.
Hydrocarbon Oil Duties Act 1979 (c.5)
4 (1) Section 13AB of the Hydrocarbon Oil Duties Act 1979 (misuse of kerosene) shall be amended as follows.
(2) For subsection (1)(a) there shall be substituted—
(a) in respect of the quantity of kerosene used the Commissioners may assess as being excise duty due from him an amount equal to duty on the same quantity of gas oil at the rate for rebated gas oil which is in force at the time of the contravention, and they may notify him or his representative accordingly;
.
(3) For subsection (2)(a) there shall be substituted—
(a) in respect of the quantity of kerosene taken into the fuel supply the Commissioners may assess as being excise duty due from him an amount equal to duty on the same quantity of gas oil at the rate for rebated gas oil which is in force at the time of the contravention, and they may notify him or his representative accordingly;
.
Tobacco Products Duty Act 1979 (c.7)
5 In section 8 of the Tobacco Products Duty Act 1979 (charge in cases of default) in subsection (2)—
(a) for “require him to pay duty" there shall be substituted “ assess an amount as duty due from him ”;
(b) at the end there shall be inserted , and they may notify him or his representative accordingly.
Finance (No. 2) Act 1992 (c.48)
6 (1) Section 2 of the Finance (No. 2) Act 1992 (power to provide for drawback of excise duty) shall be amended as follows.
(2) In subsection (3) (cancellation of drawback) paragraph (b) and the word “and" immediately preceding it shall be omitted.
(3) After subsection (3) there shall be inserted—
(3A) If entitlement to drawback is cancelled under any provision contained in regulations by virtue of subsection (3) above the Commissioners—
(a) may assess as being excise duty due from the prescribed person an amount equal to sums paid or credited to any person in respect of the drawback, and
(b) may notify the prescribed person or his representative accordingly.
(3B) The reference in subsection (3A) above to the prescribed person is to such person as may be prescribed for the purposes of the subsection by regulations under this section.
Finance Act 1994 (c.9)
7 In section 12 of the Finance Act 1994 (assessment to excise duty) after subsection (1) there shall be inserted—
(1A) Subject to subsection (4) below, where it appears to the Commissioners—
(a) that any person is a person from whom any amount has become due in respect of any duty of excise; and
(b) that the amount due can be ascertained by the Commissioners,
the Commissioners may assess the amount of duty due from that person and notify that amount to that person or his representative.
8 (1) In section 12A of the Finance Act 1994 (other assessments relating to excise duty matters) subsection (3) (amount assessed deemed to be duty due) shall be amended as follows.
(2) At the end of paragraph (b) the word “or" shall be omitted and after that paragraph there shall be inserted—
(bb) section 8, 10 or 11 of the Alcoholic Liquor Duties Act 1979,
.
(3) In paragraph (c) after “13," there shall be inserted “ 13AB, ” and after that paragraph there shall be inserted—
(d) section 8 of the Tobacco Products Duty Act 1979, or
(e) section 2 of the Finance (No. 2) Act 1992,
.
9 (1) In section 12B of the Finance Act 1994, subsection (2) (meaning of relevant time) shall be amended as follows.
(2) After paragraph (e) there shall be inserted—
(ea) in the case of an assessment under section 8 or 10 of the Alcoholic Liquor Duties Act 1979, the time of delivery from warehouse;
(eb) in the case of an assessment under section 11 of that Act, the time when the direction was made;
.
(3) In paragraph (f) after “13," there shall be inserted “ 13AB, ”.
(4) After paragraph (g) there shall be inserted—
(ga) in the case of an assessment under section 8 of the Tobacco Products Duty Act 1979, the time when the Commissioners are satisfied of a failure to prove as mentioned in subsection (2)(a) or (b) of that section;
(gb) in the case of an assessment under section 2 of the Finance (No. 2) Act 1992, the time when the sums were paid or credited in respect of the drawback;
.
10 In section 14 of the Finance Act 1994 (requirement for review of a decision) in subsection (1)(ba)—
(a) for “or" (occurring after “Management Act") there shall be substituted “ , section 8, 10 or 11 of the Alcoholic Liquor Duties Act 1979, ”;
(b) after “13," there shall be inserted “ 13AB, ”;
(c) after “Hydrocarbon Oil Duties Act 1979," there shall be inserted “ section 8 of the Tobacco Products Duty Act 1979, section 2 of the Finance (No. 2) Act 1992, ”.
11 In section 16 of the Finance Act 1994 (appeals to a tribunal) there shall be inserted after subsection (3)—
(3A) Subsection (3) above shall not apply if the appeal arises out of an assessment under section 8, 10 or 11 of the Alcoholic Liquor Duties Act 1979.
Commencement
12 This Schedule shall come into force on such day as the Commissioners of Customs and Excise may by order made by statutory instrument appoint; and different days may be appointed under this paragraph for different purposes.
SCHEDULE 4 Interest payable under the Tax Acts by or to companies
Section 35.
Interest on overpaid or early paid corporation tax
1 (1) In section 826(2) of the Taxes Act 1988 (which defines “the material date” for the purposes of interest on overpaid corporation tax) at the beginning there shall be inserted “ Subject to section 826A(2), ”.
(2) After section 826 of the Taxes Act 1988 there shall be inserted—
Interest on payments in respect of corporation tax and meaning of “the material date".
826A (1) The Treasury may by regulations make provision applying section 826, with such modifications as may be prescribed, for the purpose of conferring on companies of such descriptions as may be prescribed a right to interest—
(a) on such payments made by them in respect of corporation tax as may be prescribed,
(b) at the rate applicable under section 178 of the Finance Act 1989, and
(c) for such period as may be prescribed,
and for treating any such interest for the purposes, or prescribed purposes, of the Tax Acts as interest under section 826(1)(a) on a repayment of corporation tax.
(2) The Treasury may by regulations make provision modifying section 826(2) in relation to companies of such description as may be prescribed.
(3) Subsections (1) and (2) above do not apply in relation to companies in relation to which section 826(2) is modified or otherwise affected by regulations under section 59E of the Management Act (alteration of date on which corporation tax becomes due and payable) in relation to the accounting period to which the corporation tax in question relates.
(4) Where the Treasury make regulations under subsection (2) above in relation to companies of any description, they may also make regulations modifying section 59DA(2) of the Management Act in relation to those companies, or any description of such companies, by varying the date before which the claim there mentioned may not be made.
(5) Regulations under this section—
(a) may make different provision in relation to different cases or circumstances or in relation to companies or accounting periods of different descriptions;
(b) may make such supplementary, incidental, consequential or transitional provision as appears to the Treasury to be necessary or expedient.
(6) Regulations under this section may not make provision in relation to accounting periods ending before the day appointed under section 199 of the Finance Act 1994 for the purposes of Chapter III of Part IV of that Act (corporation tax self-assessment).
(7) In this section “prescribed” means prescribed by regulations made under this section.
(3) In section 178 of the Finance Act 1989 (setting of rates of interest) in subsection (2)(m) (which lists the provisions of the Taxes Act 1988 to which the section applies) for “and 826" there shall be substituted “ 826 and 826A(1)(b) ”.
The “material date" for interest on a repayment of income tax
2 (1) In section 826 of the Taxes Act 1988 (interest on tax overpaid) in subsection (3) (date from which interest runs on a repayment of income tax, or a payment of tax credit, to a company) for the words from “the material date is" to “for the accounting period" there shall be substituted “ the material date is the day after the end of the accounting period ”.
(2) This paragraph has effect in relation to accounting periods ending on or after the day appointed under section 199 of the Finance Act 1994 for the purposes of Chapter III of Part IV of that Act (corporation tax self-assessment).
Recovery of interest overpaid under section 826(1)(a)
3 (1) In section 826 of the Taxes Act 1988 (interest on tax overpaid) after subsection (8) there shall be inserted—
(8A) Where—
(a) interest has been paid to a company under subsection (1)(a) above,
(b) there is a change in the company’s assessed liability to corporation tax, other than a change which in whole or in part corrects an error made by the Board or an officer of the Board, and
(c) as a result only of that change (and, in particular, not as a result of any error in the calculation of the interest), it appears to an officer of the Board that the interest ought not to have been paid, either at all or to any extent,
the interest that ought not to have been paid may be recovered from the company as if it were interest charged under Part IX of the Management Act (interest on overdue tax).
(8B) For the purposes of subsection (8A) above, the cases where there is a change in a company’s assessed liability to corporation tax are those cases where—
(a) an assessment, or an amendment of an assessment, of the amount of corporation tax payable by the company for the accounting period in question is made, or
(b) a determination of that amount is made under paragraph 36 or 37 of Schedule 18 to the Finance Act 1998 (which until superseded by a self-assessment under that Schedule has effect as if it were one),
whether or not any previous assessment or determination has been made.
(8C) In subsection (8A)(b) above “error” includes—
(a) any computational error; and
(b) the allowance of a claim or election which ought not to have been allowed.
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) The amendments made by this paragraph have effect in relation to interest on repayments of corporation tax paid for accounting periods ending on or after the day appointed under section 199 of the Finance Act 1994 for the purposes of Chapter III of Part IV of that Act (corporation tax self-assessment).
Interest on underpaid tax where reliefs are carried back
4 (1) Section 87A of the Taxes Management Act 1970 (interest on overdue corporation tax etc) shall be amended as follows.
(2) In each of subsections (4), (4A) and (6) (which refer to corporation tax becoming due and payable as mentioned in subsection (1) of that section) for the words “as mentioned in subsection (1) above" there shall be substituted “ as mentioned in subsection (8) below ”.
(3) After subsection (7) there shall be inserted—
(8) In subsections (4), (4A) and (6) above, any reference to the date on which corporation tax for an accounting period became, or would have become, due and payable shall be construed on the basis that corporation tax for an accounting period becomes due and payable on the day following the expiry of nine months from the end of the accounting period.
(4) After subsection (8) there shall be inserted—
(9) The power conferred by section 59E of this Act (alteration of date on which corporation tax becomes due and payable) does not include power to make provision in relation to subsection (4), (4A), (6) or (8) above the effect of which would be to change the meaning of references in subsection (4), (4A) or (6) above to the date on which corporation tax for an accounting period became, or would have become, due and payable (as mentioned in subsection (8) above).
(5) The amendments made by this paragraph have effect where the accounting period whose due and payable date falls to be determined is an accounting period ending on or after the day appointed under section 199 of the Finance Act 1994 for the purposes of Chapter III of Part IV of that Act (corporation tax self-assessment).
(6) In sub-paragraph (5) above “due and payable date”, in relation to an accounting period, means the date on which corporation tax for that period becomes, or (as the case may be) would become, due and payable.
Interest on overpaid tax where reliefs are carried back
5 (1) Section 826 of the Taxes Act 1988 (interest on tax overpaid) shall be amended as follows.
(2) In each of subsections (7), (7A), (7B) and (7C) (which refer to corporation tax becoming due and payable as mentioned in subsection (2) of that section) for the words “as mentioned in subsection (2) above" there shall be substituted “ as mentioned in subsection (7D) below ”.
(3) After subsection (7CA) there shall be inserted—
(7D) In subsections (7), (7A), (7B) and (7C) above, any reference to the date on which corporation tax for an accounting period became, or would have become, due and payable shall be construed on the basis that corporation tax for an accounting period becomes due and payable on the day following the expiry of nine months from the end of the accounting period.
(4) After subsection (7D) there shall be inserted—
(7E) The power conferred by section 59E of the Management Act (alteration of date on which corporation tax becomes due and payable) does not include power to make provision in relation to subsection (7), (7A), (7B), (7C) or (7D) above the effect of which would be to change the meaning of references in subsection (7), (7A), (7B) or (7C) above to the date on which corporation tax for an accounting period became, or would have become, due and payable (as mentioned in subsection (7D) above).
(5) The amendments made by this paragraph have effect where the accounting period whose due and payable date falls to be determined is an accounting period ending on or after the day appointed under section 199 of the Finance Act 1994 for the purposes of Chapter III of Part IV of that Act (corporation tax self-assessment).
(6) In sub-paragraph (5) above “due and payable date”, in relation to an accounting period, means the date on which corporation tax for that period becomes, or (as the case may be) would become, due and payable.
Company liquidations
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Loan relationships
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Section 38(1).
Part I Main charging provisions
1 In section 15(1) of the Taxes Act 1988 (the Schedule A charge), for Schedule A substitute—
Schedule A
1 (1) Tax is charged under this Schedule on the annual profits arising from a business carried on for the exploitation, as a source of rents or other receipts, of any estate, interest or rights in or over land in the United Kingdom.
(2) To the extent that any transaction is entered into for the exploitation, as a source of rents or other receipts, of any estate, interest or rights in or over land in the United Kingdom, it is taken to be entered into in the course of such a business.
(3) All businesses and transactions carried on or entered into by a particular person or partnership, so far as they are businesses or transactions the profits of which are chargeable to tax under this Schedule, are treated for the purposes of this Schedule as, or as entered into in the course of carrying on, a single business.
There are qualifications to this rule in the case of—
(a) companies not resident in the United Kingdom (see subsection (1A) below); and
(b) insurance companies (see sections 432AA and 441B(2A)).
(4) The receipts referred to in the expression “as a source of rents or other receipts” include—
(a) payments in respect of a licence to occupy or otherwise to use land or the exercise of any other right over land, and
(b) rentcharges, ground annuals and feu duties and other annual payments reserved in respect of, or charged on or issuing out of, the land.
2 (1) This Schedule does not apply to profits arising from the occupation of land.
(2) This Schedule does not apply to—
(a) profits charged to tax under Case I of Schedule D under—
section 53(1) (farming and market gardening), or
section 55 (mines, quarries and other concerns);
(b) receipts or expenses taken into account as trading receipts or expenses under section 98 (tied premises);
(c) rent charged to tax under Schedule D under—
section 119 (rent, etc. payable in connection with mines, quarries and other concerns), or
section 120(1) (certain rent, etc. payable in respect of electric line wayleaves).
(3) The profits of a Schedule A business carried on by a company shall be computed without regard to items giving rise to—
credits or debits within Chapter II of Part IV of the Finance Act 1996 (loan relationships), or
exchange gains or losses within Chapter II of Part II of the Finance Act 1993 (foreign exchange gains and losses), or
qualifying payments within Chapter II of Part IV of the Finance Act 1994 (interest rate and currency contracts).
This Schedule does not affect the operation of those provisions.
3 (1) For the purposes of this Schedule a right to use a caravan or houseboat, where the use to which the caravan or houseboat may be put in pursuance of the right is confined to use at a single location in the United Kingdom, is treated as a right deriving from an estate or interest in land in the United Kingdom.
(2) In sub-paragraph (1)—
“caravan” has the meaning given by section 29(1) of the Caravan Sites and Control of Development Act 1960; and
“houseboat” means a boat or similar structure designed or adapted for use as a place of human habitation.
4 (1) In the case of a furnished letting, any sum payable for the use of furniture shall be taken into account in computing the profits chargeable to tax under this Schedule in the same way as rent.
Expenses in connection with the provision of furniture shall similarly be taken into account in the same way as expenses in connection with the premises.
(2) A furnished letting means where—
(a) a sum is payable in respect of the use of premises, and
(b) the tenant or other person entitled to the use of the premises is also entitled, in connection with that use, to the use of furniture.
(3) This paragraph does not apply if the receipts and expenses are taken into account in computing the profits of a trade consisting in, or involving, making furniture available for use in premises.
(4) In this paragraph—
(a) any reference to a sum includes the value of consideration other than money, and references to a sum being payable shall be construed accordingly; and
(b) “premises” includes a caravan or houseboat within the meaning of paragraph 3.
.
2 In section 15 of the Taxes Act 1988 (the Schedule A charge), after subsection (1) insert—
(1A) In the case of a company which is not resident in the United Kingdom—
(a) businesses carried on and transactions entered into by it the profits of which are within the charge to corporation tax under Schedule A, and
(b) businesses carried on and transactions entered into by it the profits of which are within the charge to income tax under Schedule A,
are treated as separate Schedule A businesses.
.
3 For the heading to Part II of the Taxes Act 1988 substitute “ PROVISIONS RELATING TO THE SCHEDULE A CHARGE ”.
4 For section 21 of the Taxes Act 1988 (persons chargeable and computation of amounts chargeable) substitute—
Persons chargeable and basis of assessment.
21 (1) Income tax under Schedule A shall be charged on and paid by the persons receiving or entitled to the income in respect of which the tax is directed by the Income Tax Acts to be charged.
(2) Income tax under Schedule A is charged on the full amount of the profits arising in the year of assessment.
(3) This section does not apply for the purposes of corporation tax.
Computation of amount chargeable.
21A (1) Except as otherwise expressly provided, the profits of a Schedule A business are computed in the same way as the profits of a trade are computed for the purposes of Case I of Schedule D.
(2) The following provisions apply in accordance with subsection (1)—
section 72 (apportionment);
the provisions of Chapter V of Part IV (computational provisions relating to the Schedule D charge), except as mentioned in subsection (4) below;
section 577 (business entertainment expenses);
section 577A (expenditure involving crime);
sections 579 and 580 (redundancy payments);
sections 588 and 589 (training courses for employees);
sections 589A and 589B (counselling services for employees);
section 73(2) of the Finance Act 1988 (consideration for restrictive undertakings);
section 43 of the Finance Act 1989 (deductions in respect of certain emoluments);
section 76 of that Act (expenses in connection with non-approved retirement benefit schemes);
sections 112 and 113 of that Act (expenditure in connection with provision of security asset or service);
sections 42 and 46(1) and (2) of the Finance Act 1998 (provisions as to computation of profits and losses).
(3) Section 74(1)(d) of this Act (disallowance of provisions for future repairs) applies in relation to a Schedule A business as if the reference to premises occupied for the purposes of the trade were to premises held for the purposes of the Schedule A business.
(4) The following provisions in Chapter V of Part IV of this Act do not apply, or are excepted from applying, in accordance with subsection (1)—
section 82 (interest paid to non-residents),
section 87 (treatment of premiums taxed as rent),
section 96 (farming and market gardening: relief for fluctuating profits), and
section 98 (tied premises: receipts and expenses treated as those of trade).
Application of other rules applicable to Case I of Schedule D.
21B The following provisions apply for the purposes of Schedule A in relation to a Schedule A business as they apply for the purposes of Case I of Schedule D in relation to a trade—
sections 103 to 106, 108, 109A and 110 (post-cessation receipts and expenses, etc.);
section 113 (effect for income tax purposes of change in the persons engaged in carrying on trade);
section 337(1) (effect of company beginning or ceasing to carry on trade);
section 401(1) (pre-trading expenditure);
section 44 of and Schedule 6 to the Finance Act 1998 (change of accounting basis).
.
5 After section 21B of the Taxes Act 1988 (inserted by paragraph 4 above) insert—
The Schedule A charge and mutual business.
21C (1) The following provisions have effect for the purpose of applying the charge to tax under Schedule A in relation to mutual business.
(2) The transactions or relationships involved in mutual business are treated as if they were transactions or relationships between persons between whom no relationship of mutuality existed.
(3) Any surplus arising from the business is regarded as a profit (and any deficit as a loss) if it would be so regarded if the business were not mutual.
(4) The person—
(a) to whom the profit arises for corporation tax purposes, or
(b) who is regarded as receiving or entitled to the profit for income tax purposes,
is the person who would satisfy that description if the business were not mutual business.
(5) Nothing in this section affects the operation of section 488 (co-operative housing associations).
.
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8 In section 27 of the Taxes Act 1988 (maintenance funds for historic buildings), for subsection (3) substitute—
(3) Where by virtue of this section an election has effect in relation to an estate part of which is comprised in a settlement—
(a) there may be treated as deductible from the receipts arising from that part—
(i) any disbursements or expenses of the trustees of the settlement which relate to the other part of the estate and which would be so deductible if that part were also comprised in the settlement, and
(ii) any disbursements or expenses of the owner of the other part of the estate to the extent to which they cannot be deducted by him in the chargeable period in which they are incurred because of an insufficiency of any receipts for that period from which they are deductible apart from this sub-paragraph;
(b) any relief available to the trustees by virtue of section 379A(2)(b) shall instead be available to the owner of the other part of the estate.
This subsection has effect subject to subsection (2A) of section 26.
.
9 Section 28 of the Taxes Act 1988 (deductions from receipts other than rent) shall cease to have effect.
10 Section 29 of the Taxes Act 1988 (sporting rights) shall cease to have effect.
11 In section 30(1) of the Taxes Act 1988 (expenditure on sea walls)—
(a) for “for the purposes of sections 25, 28 and 31" substitute “ for the purpose of computing the profits of any Schedule A business carried on in relation to those premises ”; and
(b) for “in respect of dilapidation attributable to the year" substitute “ as an expense of the business for that year ”.
12 Section 31 of the Taxes Act 1988 (provisions supplementary to sections 25 to 30) shall cease to have effect.
13 Section 33 of the Taxes Act 1988 (agricultural land: allowance for excess expenditure on management) shall cease to have effect.
14 Sections 33A and 33B of the Taxes Act 1988 (connected persons) shall cease to have effect.
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19 For the heading before section 40 of the Taxes Act 1988 substitute “ Supplementary provisions ”.
20 (1) Section 40 of the Taxes Act 1988 (tax treatment of receipts and outgoings on sale of land) is amended as follows.
(2) In subsection (1) for “become receivable or payable on his behalf" substitute “ been received or paid by him ”.
(3) In subsection (3)(b), for the words from “had become receivable" to the end substitute “ had been received or paid directly by him immediately before the time to which the apportionment is made ”.
(4) After subsection (4) insert—
(4A) An amount deemed under this section to have been received or paid shall be taken into account in computing the profits of the Schedule A business in question for the period in which it is treated as received or paid.
.
(5) Omit subsection (5).
21 Section 41 of the Taxes Act 1988 (relief for rent not paid, etc.) shall cease to have effect.
22 In section 42A of the Taxes Act 1988 (non-residents and their representatives), omit subsection (8).
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25 After section 70 of the Taxes Act 1988 (corporation tax: basis of assessment, etc.) insert—
Case V income from land outside UK: corporation tax.
70A (1) This section applies where a company is chargeable to corporation tax under Case V of Schedule D in respect of income which—
(a) arises from a business carried on for the exploitation, as a source of rents or other receipts, of any estate, interest or rights in or over land outside the United Kingdom, and
(b) is not income to which section 70(2) applies (income from a trade or vocation).
(2) The provisions of Schedule A apply to determine whether income falls within subsection (1)(a) above as they would apply to determine whether the income fell within paragraph 1(1) of that Schedule if—
(a) the land in question were in the United Kingdom, or
(b) a caravan or houseboat which is to be used at a location outside the United Kingdom were to be used at a location in the United Kingdom.
(3) Any provision of the Taxes Acts which deems there to be a Schedule A business in the case of land in the United Kingdom applies where the corresponding circumstances arise with respect to land outside the United Kingdom so as to deem there to be a business within subsection (1)(a) above.
(4) All businesses and transactions carried on or entered into by a particular company or partnership, so far as they are businesses or transactions the income from which is chargeable to tax under Case V of Schedule D in accordance with this section, are treated for the purposes of the charge to tax under Case V as, or as entered into in the course of carrying on, a single business (an “overseas property business").
(5) The income from an overseas property business shall be computed for the purposes of Case V of Schedule D in accordance with the rules applicable to the computation of the profits of a Schedule A business.
Those rules apply separately in relation to—
(a) an overseas property business, and
(b) any actual Schedule A business of the company chargeable,
as if each were the only Schedule A business carried on by that company.
(6) Sections 503 and 504 of this Act and section 29 of the 1990 Act (provisions relating to furnished holiday accommodation) do not apply to the profits or losses of an overseas property business.
(7) Where under this section rules expressed by reference to domestic concepts of law apply in relation to land outside the United Kingdom, they shall be interpreted so as to produce the result that most closely corresponds with the result produced for Schedule A purposes in relation to land in the United Kingdom.
.
Part II Treatment of losses
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Part III Minor and consequential amendments
Taxes Management Act 1970 (c. 9)
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Income and Corporation Taxes Act 1988 (c.1)
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44 In section 787(3) of the Taxes Act 1988 (restriction of relief for payments of interest) for “section 403(7)" substitute “ section 83(2)(b) of the Finance Act 1996 (claim to treat non-trading deficit as eligible for group relief) ”.
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Capital Allowances Act 1990 (c.1)
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Taxation of Chargeable Gains Act 1992 (c.12)
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63 (1) Schedule 8 to the Taxation of Chargeable Gains Act 1992 (leases) is amended as follows.
(2) In paragraph 5 (exclusion of premiums taxed under Schedule A, etc.)—
(a) in sub-paragraphs (1) and (2), for “income tax has become chargeable under section 34 of the Taxes Act on any amount" substitute “ any amount is brought into account by virtue of section 34 of the Taxes Act as a receipt of a Schedule A business (within the meaning of that Act) ”; and
(b) in sub-paragraph (3), for “income tax has become chargeable under section 36 of the Taxes Act (sale of land with right of re-conveyance) on any amount" substitute “ any amount is brought into account by virtue of section 36 of the Taxes Act (sale of land with right of re-conveyance) as a receipt of a Schedule A business (within the meaning of that Act) ”.
(3) In paragraph 6(2), for the words from “on which tax is paid" onwards substitute “ brought into account by virtue of section 35 of the Taxes Act (charge on assignment of a lease granted at an undervalue) as a receipt of a Schedule A business (within the meaning of that Act) ”.
(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5) For paragraph 7A substitute—
7A References in paragraphs 5 to 7 above to an amount brought into account as a receipt of a Schedule A business include references to an amount brought into account as a receipt of an overseas property business.
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Finance Act 1996 (c. 8)
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Part IV Transitional provisions for corporation tax
Introduction
65 (1) This Part of this Schedule makes provision with respect to the application of the provisions of Parts I to III of this Schedule for corporation tax purposes.
(2) In this Part of this Schedule—
“before commencement” and “after commencement” mean, respectively, before 1st April 1998 and on or after that date; and
“the new rules” means the provisions of the Tax Acts relating to Schedule A taxation or, as the case may be, to the taxation under Case V of Schedule D of income from land outside the United Kingdom, as they have effect after commencement.
Receipts and expenses not to be counted twice
66 (1) To the extent that receipts or expenses have been taken into account before commencement, they shall not be taken into account again under the new rules after commencement.
(2) Nothing in section 43 of the Finance Act 1989 (computation of profits: effect of delayed payment of emoluments) shall be construed as affecting the rule in sub-paragraph (1) above.
Receipts and expenses not to be left out of account
67 To the extent that receipts or expenses would under the new rules have been brought into account before commencement, and were not so brought into account, they shall be brought into account immediately after commencement.
Expenses not to be carried back to before commencement
68 Expenses which were incurred before commencement but were not taken into account before commencement shall not, by virtue of section 25(3) or 31(3) of the Taxes Act 1988, be carried back and taken into account before commencement.
Effect of transfer of underlying rights
69 If any estate, interest or rights in or over land is or are transferred from one person to another, the references in paragraphs 66 to 68 to receipts or expenses being taken into account shall be construed as references to their being taken into account in relation to either of those persons.
Bad debt relief
70 (1) Where relief under section 41 of the Taxes Act 1988 (relief for rent, etc. not paid) has been given in respect of an amount before commencement, any receipt after commencement shall be taken into account under the new rules.
(2) Any writing off of an amount after commencement shall be taken into account under the new rules, even where it relates to a receipt brought into account before commencement.
Meaning of “taken into account"
71 For the purposes of paragraphs 66 to 70 an amount is “taken into account” if—
(a) it is brought into account for tax purposes, or
(b) it would have been so brought into account if the person concerned were chargeable to tax.
Unrelieved Case VI losses
72 (1) A loss to which this paragraph applies which a company would, apart from this Schedule, have been entitled to carry forward under section 396 of the Taxes Act 1988 (Case VI losses) shall be treated after commencement as a loss of an earlier period within section 392A or 392B of that Act and accordingly available to be set off under those provisions.
(2) This paragraph applies to a loss sustained in a business or transaction of a kind that after commencement would be treated as carried on or entered into in the course of a Schedule A business or overseas property business carried on by the company.
Source ceasing in transitional accounting period
73 (1) The provisions of Parts I to III of this Schedule do not apply in relation to a source which ceases in the course of a company’s transitional accounting period to be a source within the charge to tax under Schedule A or Case V or VI of Schedule D in relation to that company and any other person.
(2) This paragraph does not apply if the company acquired the source in that accounting period or in the preceding twelve months.
Superseded provisions relating to finance leasing
74 (1) In Schedule 12 to the Finance Act 1997 (leasing arrangements: finance leases and loans), the following provisions (which apply concepts from Case I of Schedule D in relation to rent taxed under Schedule A) shall cease to have effect in accordance with this paragraph.
(2) Paragraphs 3(6), 6(9)(b), 8(1) to (7) and 20(b) do not apply in relation to periods of account beginning on or after 1st April 1998.
A “period of account” means a period for which accounts are made up.
(3) Paragraph 8(8) does not apply if the time mentioned in that provision is on or after 1st April 1998.
(4) Paragraph 8(9) does not apply if the time mentioned in paragraph (a) of that provision is on or after 1st April 1998.
Computation of amounts available for surrender as group relief
75 In computing under section 403 of the Taxes Act 1988 the amounts available for surrender as group relief in a company’s transitional accounting period, the amounts referable to the period before commencement shall be computed separately from the amounts referable to the period after commencement.
Meaning of “transitional accounting period"
76 For the purposes of paragraphs 73 and 75 a “transitional accounting period” means an accounting period beginning before, and ending on or after, 1st April 1998.