Finance Act 1989
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in subsection (1), after “(2)” there shall be inserted “, (2A)”, and
the following subsection shall be inserted after subsection (2)—
In section 13A of that Act (rebate on unleaded petrol), for “£0.0202” there shall be substituted “£0.0272”.
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This section shall be deemed to have come into force at 6 o’clock in the evening of 14th March 1989.
The following section shall be inserted after section 20A of the Hydrocarbon Oil Duties Act 1979—
In consequence of subsection (1) above, in paragraph 6 of Schedule 5 to the Hydrocarbon Oil Duties Act 1979 after “section” there shall be inserted “20AA or”.
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In section 3(5) of the Alcoholic Liquor Duties Act 1979 (under which the gravity of worts as ascertained by the proper officer is relevant for certain purposes) for the words from “proper officer” to the end there shall be substituted the words “brewer in accordance with subsection (2) above and recorded by him in pursuance of regulations made under section 49 below.”
This section applies to worts if the brewer ascertains their gravity in accordance with section 3(2) of the Alcoholic Liquor Duties Act 1979, for the purpose of the record kept by him in pursuance of regulations under section 49 of that Act, on or after the day on which this Act is passed.
Section 55 of the Alcoholic Liquor Duties Act 1979 (charge of excise duty on made-wine) shall be amended as follows.
so as to produce made-wine the rate of duty applicable to which is higher than the rate applicable to at least one of the constituent liquors.
After subsection (5) there shall be inserted—
This section shall have effect in relation to the blending or other mixing of made-wines, or of made-wines and wines, on or after the day on which this Act is passed.
Section 73 of the Alcoholic Liquor Duties Act 1979(which prohibits anyone from describing as beer any substance on which beer duty has not been paid) shall cease to have effect.
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“in the second column of” in paragraph 1 of Schedule 2 to the 1971 Act (rates of duty on hackney carriages), and
“in column 2 of” in paragraph 1 of Schedule 2 to the 1972 Act,
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The Tables set out in Part II of Schedule 1 to this Act shall also be substituted for Tables A, A(1) and A(2) in Part II of Schedule 4 to the 1972 Act, but modified for that purpose by the substitution for any reference to a plated gross weight of a reference to a relevant maximum weight.
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subsection (5) of section 16 of the 1971 Act (rates of duty for trade licences), including that subsection as set out in paragraph 12 of Part I of Schedule 7 to that Act, and
subsection (6) of section 16 of the 1972 Act, including that subsection as set out in paragraph 12 of Part I of Schedule 9 to that Act,
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Section 38(1) of the Vehicles (Excise) Act 1971 shall be amended as follows.
“community bus” means a vehicle used on public roads solely in accordance with a community bus permit (within the meaning of section 22 of the Transport Act 1985), and not used for providing a service under an agreement providing for service subsidies (within the meaning of section 63(10)(b) of that Act);
In the definition of “hackney carriage”, there shall be added at the end the words “but does not include a community bus”.
The amendments of the Vehicles (Excise) Act 1971 and the Vehicles (Excise) Act (Northern Ireland) 1972 set out in Schedule 2 to this Act shall have effect for the purpose of, or in connection with, replacing certain existing classes of vehicles chargeable with duty under Schedule 3 to each of those Acts with a single class of vehicles, namely that of special machines; and shall so have effect in relation to licences taken out after 14th March 1989.
As from 15th March 1989, paragraph 2 of Schedule 1 to the Hydrocarbon Oil Duties Act 1979 (vehicles which are not road vehicles within the meaning of that Act) shall have effect with the substitution of the following sub-paragraph for sub-paragraph (b)—.
Section 19 of each of the Vehicles (Excise) Act 1971 and the Vehicles (Excise) Act (Northern Ireland) 1972 (registration and registration marks) shall be amended as follows.
After subsection (1) there shall be inserted—
In subsection (2), after the words “registration mark” there shall be inserted the words “for the time being”.
Nothing in this section shall be construed as affecting the operation of— in relation to any time before the day on which this Act is passed.
either of the Acts referred to in subsection (1) above, or
any regulations made under either of those Acts,
The Secretary of State may by regulations provide for a person in whose name a vehicle is registered to be granted a right, exercisable on a single occasion falling within a specified period, to have the registration mark for the time being assigned to the vehicle assigned to some other vehicle, being a vehicle registered—
in that person’s name, or
in the name of some other person nominated by him in accordance with the regulations.
Regulations under this section may, in particular, make provision—
for the manner in which an application for the grant of such a right (referred to in the following provisions of this section as a “right of retention”) is to be made to the Secretary of State;
for the payment of a specified fee on the making of such an application and for the whole or part of the fee to be retained whether or not the application is granted;
for requiring the vehicle to which the registration mark in question is for the time being assigned to be made available for inspection at a place designated by or under the regulations;
for authorising the Secretary of State to refuse such an application on such grounds as he thinks fit;
with respect to the manner in which rights of retention are to be exercisable;
for enabling the period referred to in subsection (1) above to be extended by the Secretary of State if he thinks fit in the circumstances of any particular case;
for rights of retention to be non-transferable (but without prejudice to the vesting of any such right in a person by operation of law);
with respect to the conditions which must be satisfied before a registration mark may be assigned to a vehicle in pursuance of a right of retention;
for authorising the Secretary of State to revoke a right of retention—
if it appears to him that there are special reasons for doing so, or
in any other specified circumstances;
for the payment, in connection with the assignment of a registration mark in pursuance of a right of retention, of such charge as is for the time being prescribed by virtue of section 12(1) of the Finance Act 1976;
with respect to such incidental, consequential or supplemental matters as appear to the Secretary of State to be necessary or expedient for the purposes of the regulations.
Regulations under this section may make different provision for different cases or circumstances.
The power to make regulations under this section shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.
The assignment by the Secretary of State of any registration mark to a vehicle in pursuance of a right of retention shall be without prejudice to the subsequent exercise by him, in relation to the mark, of any of his powers under subsection (1A) of the principal section (as amended by section 10 above).
In this section—
“the Arbitration Convention” has the meaning given by section 126 of the Taxation (International and Other Provisions) Act 2010;
“arrangement” has the same meaning as in section 425 of the Companies Act 1985,
in relation to Northern Ireland, section 19 of the Vehicles (Excise) Act (Northern Ireland) 1972;
“specified” means specified in regulations under this section.
Expressions used in this section or in section 12 below which are also used in the principal section have the same meaning as in that section.
This section shall apply to such registration marks that either— as the Secretary of State may from time to time determine.
have never been assigned to a vehicle, or
have been so assigned but (as a result of having been subsequently withdrawn) are not for the time being so assigned,
The Secretary of State may by regulations make a scheme providing for registration marks to which this section applies to be assigned to vehicles registered in the names of, or of the nominees of, persons who have acquired rights under the scheme to have the marks in question so assigned.
Regulations under this section may, in particular, make provision—
for a person to acquire a right under the scheme to have a particular registration mark to which this section applies assigned to a vehicle registered— on payment of such sum as is payable in accordance with the scheme in respect of the acquisition of that right;
in his name, or
in the name of some other person nominated by him in accordance with the scheme,
with respect to—
the manner in which agreements for the sale of such rights (referred to in the following provisions of this section as “relevant rights”) may be effected,
the terms which may be contained in, or incorporated into, such agreements, and
rights and liabilities arising in connection with such agreements otherwise than under any such terms;
for enabling the Secretary of State to determine as he thinks fit—
the prices at which particular relevant rights are to be sold or (as the case may be) the reserve prices applicable to the sale of any such rights, or
the manner in which any such prices are to be determined;
with respect to the manner in which relevant rights are to be exercisable;
for relevant rights to be exercisable only on a single occasion falling within a specified period (subject to any provision made by virtue of paragraph (f) below);
for enabling any such period to be extended by the Secretary of State if he thinks fit in the circumstances of any particular case;
for relevant rights to be non-transferable (but without prejudice to the vesting of any such right in a person by operation of law);
with respect to the conditions which must be satisfied before a registration mark may be assigned to a vehicle in pursuance of a relevant right;
for authorising the Secretary of State to revoke a relevant right—
if it appears to him that there are special reasons for doing so, or
in any other specified circumstances;
for the payment, in connection with the assignment of a registration mark in pursuance of a relevant right, of such charge as is for the time being prescribed by virtue of section 12(1) of the Finance Act 1976;
with respect to such incidental, consequential or supplemental matters as appear to the Secretary of State to be necessary or expedient for the purposes of a scheme under this section.
Without prejudice to the generality of subsection (3)(b) above, regulations under this section may make provision for authorising the Secretary of State to make arrangements with other persons whereby such persons—
are given authority (whether irrevocable or otherwise) to act on his behalf in offering for sale, and entering into agreements for the sale of, relevant rights in the case of such registration marks, and during such periods, as he may determine;
are required to account to him for sums due to him under such agreements whether they have received any amounts due from the purchasers under the agreements or not; and
may become entitled or subject to such rights or liabilities of the Secretary of State in connection with such agreements as may be specified.
Regulations under this section may make different provision for different cases or circumstances, and may, in particular, exempt assignments of any specified class or description from any charge payable by virtue of subsection (3)(j) above.
The power to make regulations under this section shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.
Any sums received by the Secretary of State in respect of the sale of relevant rights shall be paid into the Consolidated Fund.
Section 11(5) above shall apply for the purposes of this section as if the reference to a right of retention were a reference to a relevant right.
In this section—
“relevant right” means such a right as is mentioned in subsection (3)(a) above; and
a repayment of corporation tax paid by the company for the period,
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after the words “section 8 of this Act” there shall be inserted the words “, or under section 102 of the Customs and Excise Management Act 1979 in relation to a licence issued under this Act,”, and
after the words “section 9(1)” in each place where they occur there shall be inserted the words “or, as the case may be, 26A(1)”.
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after the words “section 8” there shall be inserted the words “or under section 10 of the Miscellaneous Transferred Excise Duties Act (Northern Ireland) 1972 in relation to a licence issued under this Act”, and
after the words “section 9(1)” in each place where they occur there shall be inserted the words “or, as the case may be, section 26A(1)”.
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Section 116A of the Customs and Excise Management Act 1979 (power to estimate excise duties) shall be amended as mentioned in subsections (2) and (3) below.
In subsection (1)—
after the words “excise duty” there shall be inserted “to which this section applies”, and
for “the occupier of an excise warehouse or a distiller” there shall be substituted “a revenue trader”.
The following subsection shall be inserted after subsection (2)—
After section 146 of the Customs and Excise Management Act 1979 there shall be inserted—
Section 147(1) of that Act shall cease to have effect.
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This section shall have effect in relation to offences committed on or after the day on which this Act is passed.
In section 17 of the Customs and Excise Management Act1979 (general rule that customs and excise receipts, after deduction of disbursements, are to be paid into the Commissioners’ General Account at the Bank of England) paragraph (a) of subsection (5) (special rule that disbursements in Port of London are to be paid out of that Account) shall cease to have effect.
Group 2 (sewerage services and water) of Schedule 5 (zero-rating) to the Value Added Tax Act 1983 shall be amended as follows.
In item 1, there shall be substituted for paragraph (b)—
In item 2, there shall be inserted at the beginning the words “The supply, for use otherwise than in connection with the carrying on in the course of a business of a relevant industrial activity, of”.
The following shall be inserted at the end—
This section shall have effect in relation to supplies made on or after 1st July 1990.
In Schedule 5 to the Value Added Tax Act 1983 Group 6 (news services) shall be omitted.
This section shall have effect in relation to supplies made on or after 1st April 1989.
For Group 7 (fuel and power) of Schedule 5 to the Value Added Tax Act 1983 there shall be substituted—
This section shall have effect in relation to supplies made on or after lst July 1990.
In item 2 of Group 17 (protective boots and helmets) of Schedule 5 to the Value Added Tax Act 1983 there shall be inserted at the beginning the words “The supply to a person for use otherwise than by employees of his of”.
In Note (5) to that Group (supply of certain goods to include supply of certain services in respect of such goods) there shall be inserted at the end the words “, but, in the case of goods comprised in item 2, only if the goods are for use otherwise than by employees of the person to whom the services are supplied.”
This section shall have effect in relation to supplies made on or after 1st April 1989.
The following section shall be inserted in the Finance Act 1985 after section 13—
This section shall have effect in relation to certificates given on or after the day on which this Act is passed.
Where a person has paid an amount to the Commissioners by way of value added tax which was not tax due to them, they shall be liable to repay the amount to him.
The Commissioners shall only be liable to repay an amount under this section on a claim being made for the purpose.
It shall be a defence, in relation to a claim under this section, that repayment of an amount would unjustly enrich the claimant.
No amount may be claimed under this section after the expiry of 6 years from the date on which it was paid, except where subsection (5) below applies.
Where an amount has been paid to the Commissioners by reason of a mistake, a claim for the repayment of the amount under this section may be made at any time before the expiry of 6 years from the date on which the claimant discovered the mistake or could with reasonable diligence have discovered it.
A claim under this section shall be made in such form and manner and shall be supported by such documentary evidence as the Commissioners prescribe by regulations; and regulations under this subsection may make different provision for different cases.
Except as provided by this section, the Commissioners shall not be liable to repay an amount paid to them by way of value added tax by virtue of the fact that it was not tax due to them.
The preceding provisions of this section apply to an amount paid before, as well as to an amount paid after, the day on which this section comes into force, except where the Commissioners have received a claim for repayment of the amount before that day.
The following paragraph shall be inserted at the end of section 40(1) of the Value Added Tax Act 1983 (appeals)—
This section shall come into force on such day as the Treasury may by order made by statutory instrument appoint.
Section 45 of the Value Added Tax Act 1983 (orders) shall not apply to subsection (10) above.
Schedule 7 to the Value Added Tax Act 1983 (administration, collection and enforcement) shall be amended as follows.
In paragraph 2 (accounting for and payment of tax) for paragraphs (b) and (c) of sub-paragraph (4) there shall be substituted—
In paragraph 7(1) (power to require the keeping of records) after the word “may” there shall be inserted the words “by regulations”.
Regulations under sub-paragraph (1) above may make different provision for different cases and may be framed by reference to such records as may be specified in any notice published by the Commissioners in pursuance of the regulations and not withdrawn by a further notice.
This section shall come into force on such day as the Treasury may by order made by statutory instrument appoint.
Section 45 of the Value Added Tax Act 1983 (orders) shall not apply to subsection (5) above.
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After section 5 of the Car Tax Act 1983 there shall be inserted the following section—
In section 5 of the Car Tax Act 1983 (liability and payment), in subsection (1), at the end of paragraph (a), there shall be inserted the words “subject to section 5A below”.
The powers conferred by Schedule 1 to that Act to require accounts and records to be preserved and produced shall be exercisable also in relation to any certificate which has been held by or on behalf of a registered person for the purposes of section 5A of that Act.
In paragraph 13 of that Schedule (restriction on registration of chargeable vehicles), after sub-paragraph (c) there shall be inserted or
After section 13 of the Customs and Excise Duties(General Reliefs) Act 1979 there shall be inserted the following sections—
Section 13C of the Customs and Excise Duties (General Reliefs) Act 1979 inserted by subsection (1) above shall have effect where relief is conferred on or after the day on which this Act is passed.
In section 17 of the Customs and Excise Duties (General Reliefs) Act 1979,in subsection (3), for “or 13” there shall be substituted “13 or13A” and, in subsection (4), for “or 13(1)” there shall be substituted “13(1) or 13A”.
This section applies to proceedings for restitution of an amount paid to the Commissioners of Customs and Excise by way of excise duty or car tax.
Proceedings to which this section applies shall not be dismissed by reason only of the fact that the amount was paid by reason of a mistake of law.
In any proceedings to which this section applies it shall be a defence that repayment of an amount would unjustly enrich the claimant.
This section shall have effect in relation to proceedings commenced on or after the day on which this Act is passed.
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Income tax shall be charged for the year 1989-90, and the basic rate of tax shall be 25 per cent.
The higher rate at which income tax is charged for the year 1989-90 in respect of so much of an individual’s total income as exceeds the basic rate limit (£20,700) shall be 40 per cent.
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In section 257 of the Taxes Act 1988—
in subsection (3) (increased allowance for those aged 80 and over) for “80”, wherever occurring, there shall be substituted “75”, and
in subsection (5) (age allowance withdrawn by two-thirds of amount by which income exceeds a specified limit) for “two-thirds” there shall be substituted “one half”.
This section shall have effect for the year 1989-90.
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Sections 257 to 257F and 265 of the Taxes Act 1988,as inserted for the year 1990-91 and subsequent years by the Finance Act 1988,shall be amended as follows.
In section 257(1) for “£2,605” there shall be substituted “£2,785”.
In section 257(2) for “£3,180” there shall be substituted “£3,400”.
In section 257(3)—
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for “£3,310” there shall be substituted “£3,540”.
In section 257(5)—
for “£10,600” there shall be substituted “£11,400”,and
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In section 257A(1) for “£1,490” there shall be substituted “£1,590”.
In section 257A(2) for “£1,855” there shall be substituted “£1,985”.
In section 257A(3)—
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for “£1,895” there shall be substituted “£2,025”.
In section 257A(5)—
for “£10,600” there shall be substituted “£11,400”,and
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In sections . . . 257D(8) and 265(3) after paragraph (b) there shall be insertedor .
In section 257E(1)(b) for “80” there shall be substituted “75”.
In section 257E(2)(a) for “£3,180” there shall be substituted “£3,400”.
In section 257E(2)(b) for “£3,310” there shall be substituted “£3,540”.
Corporation tax shall be charged for the financial year 1989 at the rate of 35 per cent.
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For the financial year 1989—
the small companies' rate shall be 25 per cent., and
the fraction mentioned in section 13(2) of the Taxes Act 1988 (marginal relief for small companies) shall be one fortieth.
In section 13(3) of that Act (limits of marginal relief), in paragraphs (a) and (b)—
for “£100,000” there shall be substituted “£150,000”, and
for “£500,000” there shall be substituted “£750,000”.
Subsection (2) above shall have effect for the financial year 1989 and subsequent financial years; and where by virtue of that subsection section 13 of the Taxes Act 1988 has effect with different relevant maximum amounts in relation to different parts of a company’s accounting period, then for the purposes of that section those parts shall be treated as if they were separate accounting periods and the profits and basic profits of the company for that period shall be apportioned between those parts.
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The Taxes Act 1988 shall be amended as follows.
Case I: any emoluments for any year of assessment in which the person holding the office or employment is resident and ordinarily resident in the United Kingdom, subject however to section 192 if the emoluments are foreign emoluments (within the meaning of that section) and to section 193(1) if in the year of assessment concerned he performs the duties of the office or employment wholly or partly outside the United Kingdom; Case II: any emoluments, in respect of duties performed in the United Kingdom, for any year of assessment in which the person holding the office or employment is not resident (or, if resident, not ordinarily resident) in the United Kingdom, subject however to section 192 if the emoluments are foreign emoluments (within the meaning of that section); Case III: any emoluments for any year of assessment in which the person holding the office or employment is resident in the United Kingdom (whether or not ordinarily resident there) so far as the emoluments are received in the United Kingdom;
The following paragraph shall be inserted after paragraph 4 of section 19(1)—
Subsection (2) above shall apply where the year of assessment mentioned in the substituted Case I, II or III is 1989-90 or a subsequent year of assessment.
Subsection (3) above shall apply where each of the years mentioned in the new paragraph 4A(a) or (b) (as the case may be) is 1989-90 or a subsequent year of assessment.
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The following sections shall be inserted immediately before section 203 of the Taxes Act 1988—
This section shall apply where the year of assessment mentioned in the new section 202A(1) is 1989-90 or a subsequent year of assessment even if the emoluments concerned are for a year of assessment before 1989-90.
This section shall not apply in the case of emoluments of an office or employment held by a person who died before 6th April 1989.
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This section applies to emoluments of an office or employment if— and section 202B of the Taxes Act 1988 shall apply for the purposes of paragraph (d) above as it applies for the purposes of section 202A(1)(a) of that Act.
they are emoluments for a year of assessment (a relevant year) before 1989-90,
they fall within Case I or II of Schedule E as the Case applies for years before 1989-90,
they have not been paid before 6th April 1989, and
they have been received on or after 6th April 1989 and before 6th April 1991;
The emoluments shall be charged to income tax only by reference to the year of assessment in which they are received.
Any adjustments consequential on this section (such as the amendment of assessments or the repayment or setting-off of tax paid) shall be made.
This section shall not apply to emoluments of an office or employment held by a person who died before 6th April 1989.
This section shall not apply if the only emoluments of the office or employment not paid before 6th April 1989 are emoluments for a period consisting of or falling within the period beginning with 5th March 1989 and ending with 5th April 1989.
This section shall not apply unless—
written notice that it is to apply is given to the inspector before 6th April 1991,
the notice is given by or on behalf of the person who holds or held the office or employment concerned, and
the notice states the amount of the emoluments falling within subsection (1) above.
Subsection (8) below applies where emoluments of an office or employment have been or fall to be computed by reference to the accounts basis as regards the year 1987-88 or years of assessment including that year.
In deciding for the purposes of subsection (1)(a) above whether emoluments are emoluments for a particular year, the emoluments of the office or employment for the year or (as the case may be) years mentioned in subsection (7) above, and for the year 1988-89, shall be computed by reference to that basis.
In deciding whether subsection (8) above applies in a particular case, any request to revoke the application of the accounts basis shall be ignored if—
it is made after 5th April 1989, or
it is made before 6th April 1989 otherwise than in writing.
In the application of this section to emoluments of an office or employment under or with a person carrying on business as an authorised Lloyd’s underwriting agent, the references in subsections (1)(d) and (6)(a) above to 6th April 1991 shall be construed as references to 6th April 1994.
Subsection (10) above shall not apply unless the duties of the office or employment relate wholly or mainly to the underwriting agency business.
The reference in subsection (10) above to an authorised Lloyd’s underwriting agent is to a person permitted by the Council of Lloyd’s to act as an underwriting agent at Lloyd's.
If in a particular case it appears to the Board reasonable to do so they may direct that subsections (1)(d) and (6)(a) above shall have effect in relation to that case as if for the references to 6th April 1991 or (as the case may be) 6th April 1994 there were substituted references to such later date as they may specify in the direction.
In this section “the accounts basis” means the basis commonly so called (under which emoluments for a year of assessment are computed by reference to the emoluments for a period other than the year of assessment).
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This section applies to emoluments of an office or employment if—
they are emoluments for a year of assessment (a relevant year) before 1989-90,
they are received in the United Kingdom after 5th April 1989, and
had this Act not been passed they would have fallen within Case III of Schedule E.
The emoluments shall be treated as if they were not emoluments for the relevant year.
But they shall be treated as if they were emoluments for the year of assessment in which they are received in the United Kingdom and as if they fell within Case III as substituted by section 36 above; and accordingly income tax shall be charged, in accordance with section 202A of the Taxes Act 1988, by reference to the year of assessment in which the emoluments are received in the United Kingdom.
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Subsection (2) below applies to emoluments of an office or employment if—
they are emoluments for a year of assessment after 1988-89,
they have been paid before 6th April 1989, and
they fall within Case I or II of Schedule E as substituted by section 36 above.
The emoluments shall be treated as if they were received, within the meaning of section 202B of the Taxes Act 1988, on 6th April 1989; and accordingly income tax shall be charged, in accordance with section 202A of that Act, by reference to the year 1989-90.
Subsection (4) below applies to emoluments of an office or employment if—
they are emoluments for a year of assessment after 1988-89,
they have been received in the United Kingdom before 6th April 1989, and
they fall within Case III of Schedule E as substituted by section 36 above.
The emoluments shall be treated as if they were received in the United Kingdom on 6th April 1989; and accordingly income tax shall be charged, in accordance with section 202A of the Taxes Act 1988, by reference to the year 1989-90.
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This section applies in relation to the following pensions and other benefits—
a pension, stipend or annuity chargeable to income tax under Schedule E by virtue of paragraph 2, 3 or 4 of section 19(1) of the Taxes Act 1988;
a pension or annual payment chargeable to income tax under Schedule E by virtue of section 133 of that Act (voluntary pensions);
income support chargeable to income tax under Schedule E by virtue of section 151 of that Act;
a pension chargeable to income tax under Schedule E by virtue of section 597 of that Act (retirement benefit schemes);
a benefit chargeable to income tax under Schedule E by virtue of section 617(1) of that Act (social security benefits).
As regards any particular year of assessment income tax shall be charged on the amount of the pension or other benefit accruing in respect of the year; and this shall apply irrespective of when any amount is actually paid in respect of the pension or other benefit.
This section shall apply where the year of assessment mentioned in subsection (2) above is 1989-90 or a subsequent year of assessment.
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The Taxes Act 1988 shall be amended as follows.
In section 131(2) (interaction of Cases) the words “for the same or another chargeable period” shall be omitted.
In section 149(1) (sick pay chargeable as emoluments of employment for a certain period) the words “for that period” and the words “for that or any other period” shall be omitted.
Section 170 (profit-related pay charged for year of assessment in which it is paid) shall cease to have effect.
In paragraph 2(2) of Schedule 12 (foreign earnings) for the words from “emoluments from” to “year of assessment” there shall be substituted the words “emoluments for the year of assessment from the relevant employment in respect of which such a deduction is allowed”.
This section shall apply for the year 1989-90 and subsequent years of assessment.
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Subsection (2) below applies where—
a calculation is made of profits or gains which are to be charged under Schedule D and are for a period of account ending after 5th April 1989,
relevant emoluments would (apart from that subsection) be deducted in making the calculation, and
the emoluments are not paid before the end of the period of nine months beginning with the end of that period of account.
The emoluments—
shall not be deducted in making the calculation mentioned in subsection (1)(a) above, but
shall be deducted in calculating profits or gains which are to be charged under Schedule D and are for the period of account in which the emoluments are paid.
Subsections (4) and (5) below apply where—
a calculation such as is mentioned in subsection (1)(a) above is made,
the calculation is made before the end of the period of nine months beginning with the end of the period of account concerned,
relevant emoluments would (apart from subsection (2) above) be deducted in making the calculation, and
the emoluments have not been paid when the calculation is made.
It shall be assumed for the purpose of making the calculation that the emoluments will not be paid before the end of that period of nine months.
But the calculation shall be adjusted if—
the emoluments are paid after the calculation is made but before the end of that period of nine months,
a claim to adjust the calculation is made to the inspector, and
the claim is made before the end of the period of two years beginning with the end of the period of account concerned.
In the application of this section to the calculation of a person’s profits or gains as an authorised Lloyd’s underwriting agent—
the references in subsections (1)(c), (3)(b), (4) and (5)(a) above to nine months shall be construed as references to three years and nine months, and
the reference in subsection (5)(c) above to two years shall be construed as a reference to five years.
The reference in subsection (6) above to an authorised Lloyd’s underwriting agent is to a person permitted by the Council of Lloyd’s to act as an underwriting agent at Lloyd's.
In a case where the period of account mentioned in subsection (1)(a) above begins before 6th April 1989 and ends before 6th April 1990, the references in subsections (1)(c), (3)(b), (4) and (5)(a) above to nine months shall be construed as references to eighteen months.
In this section “period of account” means a period for which an account is made up.
For the purposes of this section “relevant emoluments” are emoluments for a period after 5th April 1989 allocated either—
in respect of particular offices or employments (or both), or
generally in respect of offices or employments (or both).
This section applies in relation to potential emoluments as it applies in relation to relevant emoluments, and for this purpose—
potential emoluments are amounts or benefits reserved in the accounts of an employer, or held by an intermediary, with a view to their becoming relevant emoluments;
potential emoluments are paid when they become relevant emoluments which are paid.
In deciding for the purposes of this section whether emoluments are paid at any time after 5th April 1989, section 202B of the Taxes Act 1988 (time when emoluments are treated as received) shall apply as it applies for the purposes of section 202A(1)(a) of that Act, but reading “paid” for “received” throughout.
In section 436(1)(b) of the Taxes Act 1988 (profits to be computed in accordance with provisions of that Act applicable to Case I of Schedule D) the reference to that Act shall be deemed to include a reference to this section.
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Subsection (2) below applies where—
a calculation is made for the purposes of corporation tax of the profits of an investment company for an accounting period ending after 5th April 1989,
relevant emoluments would (apart from that subsection) be deducted in making the calculation, and
the emoluments are not paid before the end of the period of nine months beginning with the end of the relevant period of account.
The emoluments—
shall not be deducted in making the calculation mentioned in subsection (1)(a) above, but
shall be deducted in calculating for the purposes of corporation tax the profits of the company concerned for the accounting period in which the emoluments are paid.
Subsections (4) and (5) below apply where—
a calculation such as is mentioned in subsection (1)(a) above is made,
the calculation is made before the end of the period of nine months beginning with the end of the relevant period of account,
relevant emoluments would (apart from subsection (2) above) be deducted in making the calculation, and
the emoluments have not been paid when the calculation is made.
It shall be assumed for the purpose of making the calculation that the emoluments will not be paid before the end of that period of nine months.
But the calculation shall be adjusted if—
the emoluments are paid after the calculation is made but before the end of that period of nine months,
a claim to adjust the calculation is made to the inspector by or on behalf of the company concerned, and
the claim is made before the end of the period of two years beginning with the end of the period of account concerned.
In a case where the accounting period mentioned in subsection (1)(a) above begins before 6th April 1989 and ends before 6th April 1990, the references in subsections (1)(c), (3)(b), (4) and (5)(a) above to nine months shall be construed as references to eighteen months.
In this section “investment company” has the same meaning as in Part IV of the Taxes Act 1988.
For the purposes of this section “relevant emoluments” are emoluments for a period after 5th April 1989 allocated either—
in respect of particular offices or employments (or both), or
generally in respect of offices or employments (or both).
This section applies in relation to potential emoluments as it applies in relation to relevant emoluments, and for this purpose—
potential emoluments are amounts or benefits reserved in the accounts of an employer, or held by an intermediary, with a view to their becoming relevant emoluments;
potential emoluments are paid when they become relevant emoluments which are paid.
For the purpose of this section the relevant period of account is the period of account which—
includes the accounting period concerned, or
begins when the accounting period concerned begins and ends when the accounting period concerned ends.
In deciding for the purposes of this section whether emoluments are paid at any time after 5th April 1989, section 202B of the Taxes Act 1988 (time when emoluments are treated as received) shall apply as it applies for the purposes of section 202A(1)(a) of that Act, but reading “paid” for “received” throughout.
Where the profits of a company carrying on life assurance business are not charged under Case I of Schedule D, this section shall apply in calculating the profits as it applies in calculating the profits of an investment company; but the effect of section 86 below shall be ignored in construing subsection (1)(b) above.
In a case where, apart from this subsection and by virtue of subsection (2)(b) above as it applies by virtue of subsection (12) above, emoluments fall to be deducted in calculating profits for a particular accounting period—
subsection (2)(b) above shall have effect subject to section 86 below;
in construing section 86 the emoluments shall be treated as expenses for that accounting period.
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The Taxes Act 1988 shall be amended as follows.
The following section shall be inserted after section 203—
Section 203(4) (regulations may define payment) shall cease to have effect.
Subsection (2) above shall have effect to determine whether anything occurring on or after the day on which this Act is passed constitutes a payment for the purposes mentioned in the new section 203A.
But if an event occurring before the day on which this Act is passed constituted a payment of or on account of income for the purposes mentioned in the new section 203A, nothing occurring on or after that day shall constitute a payment of or on account of the same income for those purposes.
For the year 1989-90 the qualifying maximum defined in section 367(5) of the Taxes Act 1988 (limit on relief for interest on certain loans) shall be£30,000.
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In section 360 of the Taxes Act 1988 for subsection (4) there shall be substituted—
The following section shall be inserted after that section—
In Schedule 6 to the Taxes Act 1988 (taxation of directors and others in respect of cars) for Part I (tables of flat rate cash equivalents) there shall be substituted—
This section shall have effect for the year 1989-90 and subsequent years of assessment.
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For the purposes of this section a security asset is an asset which improves personal security, and a security service is a service which improves personal security.
In a case where— in charging tax under Schedule E on the emoluments from the employment a deduction shall be allowed of an amount equal to so much of the cost so borne as falls to be included in the emoluments of the employment.
a security asset or security service is provided for an employee by reason of his employment, or is used by an employee, and
the cost is wholly or partly borne by or on behalf of a person (the provider) other than the employee,
In a case where— in charging tax under Schedule E on the emoluments from the employment a deduction shall be allowed of an amount equal to the amount of the expenses.
a security asset or security service is provided for or used by an employee,
expenses in connection with the provision or use are incurred out of the emoluments of the employment, and
the expenses are reimbursed by or on behalf of a person (the provider) other than the employee,
Subsection (2) or (3) above shall not apply unless the asset or service is provided for or used by the employee to meet a threat which—
is a special threat to his personal physical security, and
arises wholly or mainly by virtue of the particular employment concerned.
Subsection (2) or (3) above shall not apply unless the provider has the meeting of that threat as his sole object in wholly or partly bearing the cost or reimbursing the expenses (as the case may be).
Subsection (2) or (3) above shall not apply in the case of a service unless the benefit resulting to the employee consists wholly or mainly of an improvement of his personal physical security.
Subsection (2) or (3) above shall not apply in the case of an asset unless the provider intends the asset to be used solely to improve personal physical security.
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In a case where— section 50(2) shall nevertheless apply, but only so as to allow a deduction of the appropriate proportion of the amount there mentioned.
apart from section 50(7) above, section 50(2) above would apply in the case of an asset, and
the provider intends the asset to be used partly to improve personal physical security,
For the purposes of subsection (1) above the appropriate proportion of the amount mentioned in section 50(2) above is such proportion of that amount as is attributable to the provider’s intention that the asset be used to improve personal physical security.
In a case where— section 50(3) shall nevertheless apply, but only so as to allow a deduction of the appropriate proportion of the amount there mentioned.
apart from section 50(7) above, section 50(3) above would apply in the case of an asset, and
the provider intends the asset to be used partly to improve personal physical security,
For the purposes of subsection (3) above the appropriate proportion of the amount mentioned in section 50(3) above is such proportion of that amount as is attributable to the provider’s intention that the asset be used to improve personal physical security.
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If the provider intends the asset to be used solely to improve personal physical security, but there is another use for the asset which is incidental to improving personal physical security, that other use shall be ignored in construing section 50(7) above.
The fact that an asset or service improves the personal physical security of any member of the employee’s family or household, as well as that of the employee, shall not prevent section 50(2) or (3) above from applying.
In sections 50 and 51 above and this section—
references to an asset do not include references to a car, a ship or an aircraft,
references to an asset or service do not include references to a dwelling, grounds appurtenant to a dwelling, or living accommodation,
references to an asset include references to equipment and a structure (such as a wall),
references to an employee are to a person who holds an employment, and
references to an employment include references to an office.
For the purposes of sections 50 and 51 above and this section in their application to an asset, it is immaterial whether or not the asset becomes affixed to land (whether constituting a dwelling or otherwise).
For the purposes of sections 50 and 51 above and this section in their application to an asset, it is immaterial whether or not the employee is or becomes entitled to the property in the asset or (in the case of a fixture) an estate or interest in the land concerned.
Sections 50 and 51 above and this section apply where expenditure is incurred on or after 6th April 1989 in or towards bearing a cost or in reimbursing expenses (as the case may be).
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the words “ employment to which Chapter II of Part V applies ”shall be substituted for the words from “director’s” to “section167)” in section 418(3)(a) of that Act;
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This section applies where—
on or after 6th April 1990 an individual makes a payment in respect of a premium under a contract of private medical insurance (whenever issued),
the contract meets the requirement in subsection (2) below as to the person or persons insured,
at the time the payment is made the contract is an eligible contract,
the individual making the payment does not make it out of resources provided by another person for the purpose of enabling it to be made, and
the individual making the payment is not entitled to claim any relief or deduction in respect of it under any other provision of the Tax Acts.
The requirement mentioned in subsection (1)(b) above is that the contract insures—
an individual who at the time the payment is made is aged 60 or over and resident in the United Kingdom,
individuals each of whom at that time is aged 60 or over and resident in the United Kingdom, or
two individuals who are married to each other at that time, at least one of whom is aged 60 or over at that time, and each of whom is resident in the United Kingdom at that time.
If the payment is made by an individual who at the time it is made is resident in the United Kingdom (whether or not he is the individual or one of the individuals insured by the contract) the individual shall be entitled to relief under this subsection in respect of the payment; and (except where subsections (4) to (6) below apply) relief under this subsection shall be given—
in accordance with subsections (3A) to (3C) below, and
only on a claim made for the purpose.
In a case where— for the purposes of subsection (2) above in its application to the contract the surviving spouse shall be deemed to be aged 60 or over at the time mentioned in paragraph (b) above.
a payment is made in respect of a premium under a contract at a time when the contract meets the requirement in subsection (2) above by virtue of paragraph (c) of that subsection, and
a payment is made under the same contract at a time after one of the individuals has died and when the contract does not (apart from this subsection) meet the requirement in subsection (2) above by virtue only of the fact that the surviving spouse is not aged 60 or over at the time,
In such cases and subject to such conditions as the Board may specify in regulations, relief under subsection (3) above shall be given in accordance with subsections (5) and (6) below.
An individual who is entitled to such relief in respect of a payment may deduct and retain out of it an amount equal to income tax on it at the basic rate for the year of assessment in which it is made.
Where an individual is entitled to relief under subsection (3) above in respect of one or more payments made in a given year of assessment, the amount of his liability for that year of assessment to income tax on his total income shall be the amount to which he would be liable apart from this section less whichever is the smaller of—
the amount found under subsection (3B) below, and
the amount which reduces his liability to nil.
The person to whom the payment is made—
shall accept the amount paid after deduction in discharge of the individual’s liability to the same extent as if the deduction had not been made, and
may, on making a claim in accordance with regulations, recover from the Board an amount equal to the amount deducted.
The amount referred to in subsection (3A)(a) above is an amount found by—
taking the amount of the payment referred to in subsection (3A) above or (as the case may be) the aggregate amount of the payments there referred to, and
finding an amount equal to tax on the amount taken under paragraph (a) above at the basic rate for the year of assessment concerned.
The Treasury may make regulations providing that in circumstances prescribed in the regulations—
an individual who has made a payment in respect of a premium under a contract of private medical insurance shall cease to be and be treated as not having been entitled to relief under subsection (3) above; and
he or the person to whom the payment was made (depending on the terms of the regulations) shall account to the Board for tax from which relief has been given on the basis that the individual was so entitled.
In determining for the purposes of subsection (3A) above the amount of incomers on would be liable apart from this section, no account shall be taken of—
any income tax reduction under Chapter I of Part VII of the Taxes Act 1988 or under section 347B of that Act;
any income tax reduction under section 353(1A) of the Taxes Act 1988;
any relief by way of a reduction of liability to tax which is given in accordance with any arrangements having effect by virtue of section 788 of the Taxes Act 1988 or by way of a credit under section 790(1) of that Act;
any tax at the basic rate on so much of that person’s income as is income the income tax on which he is entitled to charge against any other person or to deduct, retain or satisfy out of any payment.
Regulations under subsection (7) above may include provision adapting or modifying the effect of any enactment relating to income tax in order to secure the performance of any obligation imposed under paragraph (b) of that subsection.
In this section—
references to a premium, in relation to a contract of insurance, are to any amount payable under the contract to the insurer, and
references to an individual who is resident in the United Kingdom at anytime include references to an individual who is at that time performing duties which are treated by virtue of section 132(4)(a) of the Taxes Act 1988 as performed in the United Kingdom.
This section has effect to determine whether a contract is at a particular time (the relevant time) an eligible contract for the purposes of section 54 above.
A contract is an eligible contract at the relevant time if—
it was entered into by an insurer who at the time it was entered into was a qualifying insurer and was approved by the Board for the purposes of this section,
the period of insurance under the contract does not exceed one year(commencing with the date it was entered into),
the contract is not connected with any other contract at the relevant time and has not been connected with any other contract at any time since it was entered into, and
at the relevant time the contract satisfies the conditions set out in subsection (2A) below,
no benefit has been provided by virtue of the contract other than an approved benefit, and
the contract is not one in the case of which subsection (2D) below applies,
the contract meets one or more of the three conditions set out below.
The first condition is that the contract is certified by the Board under section 56 below at the relevant time.
The conditions referred to in subsection (2)(ba) above are that—
the contract either provides indemnity in respect of all or any of the costs of all or any of the treatments, medical services and other matters for the time being specified in regulations made by the Treasury, or in addition to providing indemnity of that description provides cash benefits falling within rules for the time being so specified,
the contract does not confer any right other than such a right as is mentioned in paragraph (a) above or is for the time being specified in regulations made by the Treasury,
the premium under the contract is reasonable, and
the contract satisfies such other requirements as are for the time being specified in regulations made by the Treasury.
The second condition is that, at the time the contract was entered into, it conformed with a standard form certified by the Board as a standard form of eligible contract.
In a case where— the contract shall not thereby be regarded as failing to satisfy at the relevant time the condition set out in subsection (2A)(b) above.
at the relevant time the contract confers a material right, or more than one such right, but
the total cost to the insurer of providing benefits in pursuance of the material right or (as the case may be) in pursuance of all the material rights would not exceed the prescribed sum,
The third condition is that, at the time the contract was entered into, it conformed with a form varying from a standard form so certified in no other respect than by making additions—
which were (at the time the contract was entered into) certified by the Board as compatible with an eligible contract when made to that standard form, and
which (at that time) satisfied any conditions subject to which the additions were so certified.
For the purposes of subsection (2B) above a material right is a right which—
is not a right such as is mentioned in subsection (2A)(a) above or such as is for the time being specified in regulations made under subsection (2A)(b) above, and
is not a right to a cash benefit.
Where a contract is varied, and the relevant time falls after the time the variation takes effect, subsections (1) to (5) above shall have effect as if “entered into” read “varied” in each place where it occurs in subsections (4) and (5) above.
This subsection applies in the case of a contract (the main contract) if—
at least one other contract is entered into which is a contract (a collateral contract) under which a benefit is provided in consideration of the insured’s entering into the main contract, and
the cost to the insurer of fulfilling his obligations under the collateral contract (or, if there is more than one collateral contract, of fulfilling his obligations under all of them) exceeds the prescribed sum.
For the purposes of this section a contract is connected with another contract at any time if—
they are simultaneously in force at that time,
either of them was entered into with reference to the other, or with a view to enabling the other to be entered into on particular terms, or with a view to facilitating the other being entered into on particular terms, and
the terms on which either of them was entered into would have been significantly less favourable to the insured if the other had not been entered into.
For the purposes of this section each of the following is a qualifying insurer—
an insurer lawfully carrying on in the United Kingdom business of any of the classes specified in Part I of Schedule 2 to the Insurance Companies Act 1982;
an insurer not carrying on business in the United Kingdom but carrying on business in another member State and being either a national of a member State or a company or partnership formed under the law of any part of the United Kingdom or another member State and having its registered office, central administration or principal place of business in a member State.
For the purposes of this section a benefit is an approved benefit if it is provided in pursuance of a right of a description
mentioned in subsection (2A)(a) above, or
for the time being specified in regulations made under subsection (2A)(b) above.
For the purposes of this section a benefit is also an approved benefit if it is not a cash benefit and—
it is a single benefit provided otherwise than as mentioned in subsection (9) above and the cost to the insurer of providing it does not exceed the prescribed sum, or
it is one of a number of benefits provided otherwise than as mentioned in subsection (9) above and the total cost to the insurer of providing the benefits does not exceed the prescribed sum.
In this section the reference to a premium, in relation to a contract of insurance, is to any amount payable under the contract to the insurer.
For the purposes of this section the prescribed sum is £30.
The Treasury may by order substitute for the sum for the time being specified in subsection (12) above such sum as may be specified in the order; and any such substitution shall have effect in relation to cases where the relevant time falls on or after such date as is specified in the order.
The Board shall certify a contract under this section if it satisfies the conditions set out in subsection (3) below; and the certification shall be expressed to take effect from the time the conditions are satisfied, and shall take effect accordingly.
The Board shall revoke a certification of a contract under this section if it comes to their notice that the contract has ceased to satisfy the conditions set out in subsection (3) below; and the revocation shall be expressed to take effect from the time the conditions ceased to be satisfied, and shall take effect accordingly.
The conditions referred to above are that—
the contract either provides indemnity in respect of all or any of the costs of all or any of the treatments, medical services and other matters for the time being specified in regulations made by the Treasury, or in addition to providing indemnity of that description provides cash benefits falling within rules for the time being so specified,
the contract does not confer any right other than such a right as is mentioned in paragraph (a) above or is for the time being specified in regulations made by the Treasury,
the premium under the contract is in the Board’s opinion reasonable, and
the contract satisfies such other requirements as are for the time being specified in regulations made by the Treasury.
The certification of a contract by the Board under this section shall cease to have effect if the contract is varied; but this is without prejudice to the application of the preceding provisions of this section to the contract as varied.
Where the Board refuse to certify a contract under this section, or they revoke a certification, an appeal may be made to the Special Commissioners by—
the insurer, or
any person who (if the policy were certified) would be entitled to relief under section 54 above.
Where a contract is certified under this section, or a certification is revoked or otherwise ceases to have effect, any adjustments resulting from the certification or from its revocation or ceasing to have effect shall be made.
Subsection (6) above applies where a certification or revocation takes place on appeal as it applies in the case of any other certification or revocation.
In this section the reference to a premium, in relation to a contract of insurance, is to any amount payable under the contract to the insurer.
The Board may by regulations—
provide that a claim under section 54(3) or (6)(b) above shall be made in such form and manner, shall be made at such time, and shall be accompanied by such documents, as may be prescribed;
make provision, in relation to payments in respect of which a person is entitled to relief under section 54 above, for the giving by insurers in such circumstances as may be prescribed of certificates of payment in such form as may be prescribed to such persons as may be prescribed;
make provision for and with respect to appeals against a decision of an officer of the Board or the Board with respect to a claim under section 54(6)(b) above;
provide that a person who provides (or has at any time provided) insurance under contracts of private medical insurance shall comply with any notice which is served on him by the Board and which requires him within a prescribed period to make available for the Board’s inspection documents (of a prescribed kind) relating to such contracts;
provide that persons of such a description as may be prescribed shall, within a prescribed period of being required to do so by the Board, furnish to the Board information (of a prescribed kind) about contracts of private medical insurance;
make provision with respect to the approval of insurers for the purposes of section 55 above and the withdrawal of approval for the purposes of that section;
make provision for and with respect to appeals against decisions of the Board with respect to the giving or withdrawal of approval of insurers for the purposes of section 55 above;
make provision with respect to the certification by the Board of standard forms of eligible contract and variations from standard forms of eligible contract certified by them;
make provision for and with respect to appeals against decisions of the Board with respect to the certification of standard forms of eligible contractor variations from standard forms of eligible contract certified by them;
provide that certification, or the revocation of a certification, under section 56 above shall be carried out in such form and manner as may be prescribed;
make provision with respect to appeals against decisions of the Board with respect to certification or the revocation of certification under section 56 above;
make provision generally as to administration in connection with sections 54 to 56 above.
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The following provisions of the Taxes Management Act 1970, namely— shall apply in relation to an amount which is paid to any person by the Board as an amount recoverable by virtue of section 54(6)(b) above but to which that person is not entitled as if it were income tax which ought not to have been repaid and, where that amount was claimed by that person, as if it had been repaid as respects a chargeable period as a relief which was not due.
section 29(1)(c) (excessive relief) as it has effect apart from section 29(2) to (10) of that Act;
section 30 (tax repaid in error etc.) apart from subsection (1B),
section 86 (interest), and
section 95 (incorrect return or accounts),
In sections . . . 257D(8) and 265(3) of the Taxes Act 1988 after paragraph (c) there shall be insertedor .
In the application of section 86 of the Taxes Management Act 1970 by virtue of subsection (3) above in relation to sums due and payable by virtue of an assessment made under section 29(1)(c) or 30 of that Act, as applied by that subsection, the relevant date—
in a case where the person falling within section 54(6) above has made any interim claim, within the meaning of regulations made under subsection (1) and section 54(4) above, as respects some part of the year of assessment for which the assessment is made, is 1st January in that year of assessment; and
in any other case, is the later of the following dates, that is to say—
1st January in the year of assessment for which the assessment is made; or
the date of the making of the payment by the Board which gives rise to the assessment.
In subsection (1) above—
“prescribed” means prescribed by or, in relation to form, under the regulations.
“prescribed” means prescribed by or, in relation to form, under the regulations.
In section 202(7) of the Taxes Act 1988 (which limits to £240 the deductions attracting relief) for “£240” there shall be substituted “£480”.
This section shall have effect for the year 1989-90 and subsequent years of assessment.
In determining whether a payment made to a charity within subsection (2) below is — there shall be disregarded any consideration for the payment which is of a kind described in subsection (3) below.
an annual payment for the purposes of the Tax Acts, or
a payment to which section 125(1) of the Taxes Act 1988 applies, or
a covenanted payment to charity within the meaning given by section 660(3) of that Act,
A charity is within this subsection if its sole or main purpose is—
the preservation of property for the public benefit, or
the conservation of wildlife for the public benefit.
The consideration referred to in subsection (1) above is the right of admission—
to view property the preservation of which is the sole or main purpose of the charity, or
to observe wildlife the conservation of which is the sole or main purpose of the charity.
In subsection (3) above “right of admission” refers to admission of the person making the payment (or of any member of his family who may be admitted because of the payment) either free of the charges normally payable for admission by members of the public, or on payment of a reduced charge.
Subsection (1) above shall not apply unless the opportunity to make payments of the kind in question is available to members of the public.
For the purposes of this section—
“charity” means a body of persons or trust established for charitable purposes only, and
the bodies mentioned in section 507 shall each be treated as having been so established.
This section shall apply to payments due on or after 14th March 1989.
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Schedule 4 to this Act (which amends the provisions of the Taxes Act 1988 relating to profit-related pay) shall have effect.
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Part III of Schedule 9 to the Taxes Act 1988 (requirements applicable to savings-related share option schemes) shall be amended as follows.
In paragraph 24(2)(a) (scheme not to permit monthly amount of contributions linked to schemes to exceed £100), for “£100” there shall be substituted “£150”.
In paragraph 25(b) (requirement that price at which share may be acquired under scheme be not less than 90 per cent. of market value), for the words “90 per cent.” there shall be substituted the words “80 per cent.”.
Subsection (2) above shall come into force on such day as the Treasury may by order made by statutory instrument appoint.
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In section 187(2) of the Taxes Act 1988, in the definition of “relevant amount” (limit on the value of shares that may be appropriated to a participant in a year of assessment), for the words “not less than £l,250 and not more than £5,000” there shall be substituted the words “not less than £2,000 and not more than £6,000”.
This section shall apply for the year 1989-90 and subsequent years of assessment.
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In Schedule 9 to the Taxes Act 1988 the following paragraph shall be inserted after paragraph 39—
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In relation to offers made on or after 11th October 1988, section 68 of the Finance Act 1988 (which provides for the benefits derived from priority rights in share offers to be disregarded in certain circumstances) shall have effect with the following amendments.
In subsection (1), the words from “at the fixed price” to “tendered” shall be omitted.
After that subsection there shall be inserted—
In subsection (2), for paragraph (a) (priority shares not to exceed 10 per cent. of shares subject to the offer) there shall be substituted—.
After subsection (2) there shall be inserted—
This section applies where—
a company expends a sum in making a payment by way of contribution to the trustees of a trust which is a qualifying employee share ownership trust at the time the sum is expended,
at that time, the company or a company which it then controls has employees who are eligible to benefit under the terms of the trust deed,
at that time the company is resident in the United Kingdom,
before the expiry of the expenditure period the sum is expended by the trustees for one or more of the qualifying purposes, and
before the end of the claim period a claim for relief under this section is made.
In such a case the sum—
shall be deducted in computing for the purposes of Schedule D the profits of a trade carried on by the company,
if the company is an investment company, shall be treated as expenses of management, or
if the company is a company in relation to which the I - E rules apply and the sum is referable, in accordance with Chapter 4 of Part 2 of the Finance Act 2012, to the company's basic life assurance and general annuity business, shall be treated for the purposes of section 76 of that Act as ordinary BLAGAB management expenses of the company.
For the purposes of subsection (1)(b) above, the question whether one company is controlled by another shall be construed in accordance with section840 of the Taxes Act 1988.
For the purposes of subsection (1)(d) above each of the following is a qualifying purpose—
the acquisition of shares in the company which established the trust;
the repayment of sums borrowed;
the payment of interest on sums borrowed;
the payment of any sum to a person who is a beneficiary under the terms of the trust deed;
the meeting of expenses.
For the purposes of subsection (1)(d) above the expenditure period is the period of nine months beginning with the day following the end of the period of account in which the sum is charged as an expense of the company, or such longer period as the Board may allow by notice given to the company.
For the purposes of subsection (1)(e) above the claim period is the period of two years beginning with the day following the end of the period of account in which the sum is charged as an expense of the company.
For the purposes of this section the trustees of an employee share ownership trust shall be taken to expend sums paid to them in the order in which the sums are received by them (irrespective of the number of companies making payments).
This section applies where a chargeable event (within the meaning of section 69 below) occurs in relation to the trustees of an employee share ownership trust.
In such a case—
the trustees shall be treated as receiving, when the event occurs, income of an amount that is equal to the chargeable amount (within the meaning of section 70 below),
that income shall be chargeable to income tax for the year of assessment in which the event occurs,
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the tax so chargeable shall be charged on the full amount of the income the trustees are treated as receiving in the year of assessment , and
the trustees are liable for any tax so chargeable, ...
If the whole or any part of the tax assessed on the trustees is not paid before the expiry of the period of six months beginning with the day on which the assessment becomes final and conclusive, a notice of liability to tax under this subsection may be served on a qualifying company and the tax or the part unpaid (as the case may be) shall be payable by the company on service of the notice.
Where a notice of liability is served under subsection (3) above— shall be payable by the company.
any interest which is due on the tax or the part (as the case may be) and has not been paid by the trustees, and
any interest accruing due on the tax or the part (as the case may be)after the date of service,
Where a notice of liability is served under subsection (3) above and any amount payable by the company (whether on account of tax or interest) is not paid by the company before the expiry of the period of three months beginning with the date of service, the amount unpaid may be recovered from the trustees(without prejudice to the right to recover it instead from the company).
For the purposes of this section each of the following is a qualifying company—
the company which established the employee share ownership trust;
any company falling within subsection (7) below.
A company falls within this subsection if, before it is sought to serve a notice of liability on it under subsection (3) above—
it has paid a sum to the trustees, and
the sum has been deducted as mentioned in section 67(2)(a) above or treated as mentioned in section 67(2)(b) above.
For the purposes of section 68 above each of the following is a chargeable event in relation to the trustees of an employee share ownership trust—
the transfer of securities by the trustees, if the transfer is not a qualifying transfer;
the transfer of securities by the trustees to persons who are at the time of the transfer beneficiaries under the terms of the trust deed, if the terms on which the transfer is made are not qualifying terms;
the retention of securities by the trustees at the expiry of the qualifying period beginning with the date on which they acquired them;
the expenditure of a sum by the trustees for a purpose other than a qualifying purpose.
where— the expiry of that period.
the trustees make a qualifying transfer within subsection (3AA) below for a consideration, and
they do not, during the period specified in subsection (5A) below, expend a sum of not less than the amount of that consideration for one or more qualifying purposes,
For the purposes of subsection (1)(a) above a transfer is a qualifying transfer if it is made to a person who at the time of the transfer is a beneficiary under the terms of the trust deed.
For the purposes of subsection (1)(a) above a transfer is also a qualifying transfer if—
it is made to the trustees of a scheme which at the time of the transfer is a profit sharing scheme approved under Schedule 9 to the Taxes Act 1988, and
it is made for a consideration which is not less than the price the securities might reasonably be expected to fetch on a sale in the open market.
For the purposes of subsection (1)(b) above a transfer of securities is made on qualifying terms if—
all the securities transferred at the same time other than those transferred on a transfer such as is mentioned in subsection (4ZA) below are transferred on similar terms,
securities have been offered to all the persons who are beneficiaries under the terms of the trust deed by virtue of a rule which conforms with paragraph 4(2), (3) or (4) of Schedule 5 to this Act when the transfer is made, and
securities are transferred to all such persons who have accepted.
For the purposes of subsection (1)(a) above a transfer is also a qualifying transfer if—
it is a transfer of relevant shares made to the trustees of the plan trust of a share incentive plan,
the plan is approved under Schedule 2 to the Income Tax (Earnings and Pensions) Act 2003 when the transfer is made, and
the consideration (if any) for which the transfer is made does not exceed the market value of the shares.
For the purposes of subsection (1)(d) or (e) above each of the following is a qualifying purpose—
the acquisition of shares in the company which established the trust;
the repayment of sums borrowed;
the payment of interest on sums borrowed;
the payment of any sum to a person who is a beneficiary under the terms of the trust deed;
the meeting of expenses.
For the purpose of determining whether a transfer by the trustees is a qualifying transfer within subsection (3AA) above, where on or after 21st March 2000— the relevant shares shall be treated as transferred or disposed of before any other shares included in that holding. For this purpose “ holding ” means any number of shares of the same class held by the trustees, growing or diminishing as shares of that class are acquired or disposed of.
the trustees transfer or dispose of part of a holding of shares (whether by way of a qualifying transfer or otherwise), and
the holding includes any relevant shares,
For the purposes of subsection (4) above, the fact that terms vary according to the levels of remuneration of beneficiaries, the length of their service, or similar factors, shall not be regarded as meaning that the terms are not similar.
For the purposes of subsections (3AA) and (3AB) above—
In ascertaining for the purposes of this section whether particular securities are retained, securities acquired earlier by the trustees shall be treated as transferred by them before securities acquired by them later.
For the purposes of subsection (3AC) above—
“ original funds ” means any money held by the trustees of the employee share ownership trust in a bank or building society account at midnight on 20th March 2000, and
any payment made by the trustees after that time (whether to acquire shares or otherwise) shall be treated as made out of original funds (and not out of money received after that time) until those funds are exhausted.
For the purposes of this section trustees—
acquire securities when they become entitled to them (subject to the exceptions in subsection (9) below);
transfer securities to another person when that other becomes entitled to them;
retain securities if they remain entitled to them.
For the purposes of subsection (1)(a) above a transfer is also a qualifying transfer if it is made by way of exchange in circumstances mentioned in section 85(1) of the Capital Gains Tax Act 1979 or section 135(1) of the Taxation of Chargeable Gains Act 1992.
The exceptions are these—
if securities are issued to trustees in exchange in circumstances mentioned in section 135(1) of the Taxation of Chargeable Gains Act 1992, they shall be treated as having acquired them when they became entitled to the securities for which they are exchanged;
if trustees become entitled to securities as a result of a reorganisation, they shall be treated as having acquired them when they became entitled to the original shares which those securities represent (construing “reorganisation” and “original shares” in accordance with section 126 of that Act).
If trustees agree to take a transfer of securities, for the purposes of this section they shall be treated as becoming entitled to them when the agreement is made and not on a later transfer made pursuant to the agreement.
For the purposes of subsection (1)(b) above a transfer of securities is also made on qualifying terms if—
it is made to a person exercising a right to acquire shares, and
that right was obtained in accordance with the provisions of an SAYE option scheme within the meaning of the SAYE code (see section 516(4) of the Income Tax (Earnings and Pensions) Act 2003)—
which was established by, or by a company controlled by, the company which established the trust, and
which is approved under Schedule 3 to that Act, and
that right is being exercised in accordance with the provisions of that scheme, and
the consideration for the transfer is payable to the trustees.
If trustees agree to transfer securities to another person, for the purposes of this section the other person shall be treated as becoming entitled to them when the agreement is made and not on a later transfer made pursuant to the agreement.
For the purposes of subsection (1)(c) above the qualifying period is— and for this purpose a trust is established when the deed under which it is established is executed.
seven years, in the case of trusts established on or before the day on which the Finance Act 1994 was passed;
twenty years, in the case of other trusts;
For the purposes of this section the following are securities—
shares;
debentures.
The period referred to in paragraph (e) of subsection (1) above is the period—
beginning with the qualifying transfer mentioned in that paragraph, and
ending nine months after the end of the period of account in which that qualifying transfer took place. For this purpose the period of account means the period of account of the company that established the employee share ownership trust.
This section has effect to determine the chargeable amount for the purposes of section 68 above.
If the chargeable event falls within section 69(1)(a), (b) or (c) above the following rules shall apply—
if the event constitutes a disposal of the securities by the trustees for the purposes of the Taxation of Chargeable Gains Act 1992, the chargeable amount is an amount equal to the sums allowable under section 38(1)(a) and (b) of that Act;
if the event does not constitute such a disposal, the chargeable amount is an amount equal to the sums which would be so allowable had the trustees made a disposal of the securities for the purposes of that Act at the time the chargeable event occurs.
If the chargeable event falls within section 69(1)(d) above the chargeable amount is an amount equal to the sum concerned.
If the chargeable event falls within section 69(1)(e) above the chargeable amount is an amount equal to—
the amount of the consideration received for the qualifying transfer mentioned in section 69(1)(e) above, less
the amount of any expenditure by the trustees for a qualifying purpose during the period mentioned in section 69(5A) above.
This section applies where—
a chargeable event (within the meaning of section 69 above) occurs in relation to the trustees of an employee share ownership trust,
at the time the event occurs anything is outstanding in respect of the principal of an amount or amounts borrowed at any time by the trustees, and
the chargeable event is one as regards which section 72(2)(b) below applies.
In the following provisions of this section—
“the initial chargeable event” means the event referred to in subsection (1)(a) above, and
“the total outstanding amount” means the total amount outstanding, at the time the initial chargeable event occurs, in respect of the principal of an amount or amounts borrowed at any time by the trustees.
If any of the total outstanding amount is repaid after the initial chargeable event occurs, a further chargeable event shall occur in relatio nto the trustees at the end of the year of assessment in which the repayment is made.
In such a case—
the trustees shall be treated as receiving, when the further event occurs, income of an amount that is equal to the chargeable amount,
that income shall be chargeable to income tax for the year of assessment at the end of which the further event occurs,
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the tax so chargeable shall be charged on the full amount of the income the trustees are treated as receiving in the year of assessment , and
the trustees are liable for any tax so chargeable, ...
Subject to subsection (6) below, for the purposes of subsection (4) above the chargeable amount is an amount equal to the aggregate of the total outstanding amount repaid in the year of assessment.
In a case where section 72(2)(b) below had effect in the case of the initial chargeable event, for the purposes of subsection (4) above the chargeable amount is an amount equal to the smaller of—
the aggregate of the total outstanding amount repaid in the year of assessment, and
an amount found by applying the formula A-B-C.
For the purposes of subsection (6) above—
A is the amount which would be the chargeable amount for the initial chargeable event apart from section 72(2) below,
B is the chargeable amount for the initial chargeable event, and
C is the amount (if any) found under subsection (8) below.
If, before the further chargeable event occurs, one or more prior chargeable events have occurred in relation to the trustees by virtue of the prior repayment of any of the total outstanding amount found for the time the initial chargeable event occurs, the amount found under this subsection is an amount equal to the chargeable amount for the prior chargeable event or to the aggregate of the chargeable amounts for the prior chargeable events (as the case may be).
In a case where— the sum or part (as the case may be) shall not be included in the total outstanding amount found for the time the other chargeable event occurs.
a chargeable event (within the meaning of section 69 above) occurs in relation to the trustees in circumstances mentioned in subsection (1) above,
a sum falls to be included in the total outstanding amount found for the time the event occurs,
another chargeable event (within the meaning of that section) occurs in relation to the trustees in circumstances mentioned in subsection (1) above, and
the same sum or a part of it would (apart from this subsection) fall to be included in the total outstanding amount found for the time the event occurs,
In ascertaining for the purposes of this section whether a repayment is in respect of a particular amount, amounts borrowed earlier shall be taken to be repaid before amounts borrowed later.
Subsections (3) to (7) of section 68 above shall apply where tax is assessed by virtue of this section as they apply where tax is assessed by virtue of that section.
For the purposes of this section each of the following is a chargeable event in relation to the trustees of an employee share ownership trust—
an event which is a chargeable event by virtue of section 69 above;
an event which is a chargeable event by virtue of section 71 above.
If a chargeable event (the event in question) occurs in relation to the trustees of an employee share ownership trust, the following rules shall apply—
the amount which would (apart from this subsection) be the chargeable amount for the event in question shall be aggregated, for the purposes of paragraph (b) below, with the chargeable amounts for other chargeable events(if any) occurring in relation to the trustees before the event in question,
if the amount which would (apart from this subsection) be the chargeable amount for the event in question (or the aggregate found under paragraph (a)above, if there is one) exceeds the deductible amount, the chargeable amount for the event in question shall be the amount it would be apart from this subsection less an amount equal to the excess, and
section 70(2) and (3) and section 71(5) above shall have effect subject to paragraph (b) above.
For the purposes of subsection (2) above the deductible amount (as regards the event in question) is an amount equal to the total of the sums falling within subsection (4) below.
A sum falls within this subsection if it has been received by the trustees before the occurrence of the event in question and—
it has been deducted as mentioned in section 67(2)(a) above, or treated as mentioned in section 67(2)(b) above, before the occurrence of that event, or
it would fall to be so deducted or treated if a claim for relief under section 67 above had been made immediately before the occurrence of that event.
An inspector may by notice in writing require a return to be made by the trustees of an employee share ownership trust if they have at any time received a sum which has been deducted as mentioned in section 67(2)(a) above or treated as mentioned in section 67(2)(b) above.
Where he requires such a return to be made the inspector shall specify the information to be contained in it.
The information which may be specified is information the inspector needs for the purposes of sections 68 to 72 above, and may include information about—
sums received (including sums borrowed) by the trustees;
expenditure incurred by them;
assets acquired by them;
transfers of assets made by them.
The information which may be required under subsection (3)(a) above may include the persons from whom the sums were received.
The information which may be required under subsection (3)(b) above may include the purpose of the expenditure and the persons receiving any sums.
The information which may be specified under subsection (3)(c) above may include the persons from whom the assets were acquired and the consideration furnished by the trustees.
The information which may be included under subsection (3)(d) above may include the persons to whom assets were transferred and the consideration furnished by them.
In a case where a sum has been deducted as mentioned in section 67(2)(a)above, or treated as mentioned in section 67(2)(b) above, the inspector shall send to the trustees to whom the payment was made a certificate stating—
that a sum has been so deducted or so treated, and
what sum has been so deducted or so treated.
In the Table in section 98 of the Taxes Management Act1970 (penalties for failure to comply with notices etc.) at the end of the first column there shall be inserted— “ Section 73 of the Finance Act 1989 ”.
Schedule 5 to this Act shall have effect to determine whether, for the purposes of sections 67 to 73 above, a trust is at a particular time—
an employee share ownership trust;
a qualifying employee share ownership trust.
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In computing the amount of the profits or gains to be charged under Case I or Case II of Schedule D, no sum shall be deducted in respect of any expenses falling within subsection (2) or (3) below; and no expenses falling within either of those subsections shall be treated for the purposes of section 75 of the Taxes Act 1988 (investment companies) as expenses of management.
Expenses fall within this subsection if—
they are expenses of providing benefits pursuant to a relevant retirement benefits scheme, and
the benefits are not ones in respect of which a person is on receipt chargeable to income tax.
Expenses fall within this subsection if—
they are expenses of paying any sum pursuant to a relevant retirement benefits scheme with a view to the provision of any benefits, and
the sum is not one which when paid is treated as the income of a person by virtue of section 595(1) of the Taxes Act 1988 (sum paid with a view to the provision of any relevant benefits for an employee).
No sum shall be deducted in respect of any expenses falling within subsection (5) or (6) below— unless the sum has actually been expended.
in computing the amount of the profits or gains to be charged under Case I or Case II of Schedule D, or
by virtue of section 75 of the Taxes Act 1988,
Expenses fall within this subsection if—
they are expenses of providing benefits pursuant to a relevant retirement benefits scheme, and
the benefits are ones in respect of which a person is on receipt chargeable to income tax.
Expenses fall within this subsection if—
they are expenses of paying any sum pursuant to a relevant retirement benefits scheme with a view to the provision of any benefits, and
the sum is one which when paid is treated as the income of a person by virtue of section 595(1) of the Taxes Act 1988.
In this section—
This section has effect in relation to expenses incurred on or after the day on which this Act is passed.
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The following section shall be inserted after section 468C of the Taxes Act 1988—
Where, in the case of a certified unit trust and apart from this subsection, section 468(5) of the Taxes Act 1988 would apply as regards a distribution period beginning after 31st December 1989, section 468(5) shall not apply in the case of the trust as regards that period.
Where by virtue of subsection (1) above the last distribution period as regards which section 468(5) applies in the case of a certified unit trust is one beginning on or before, and ending after, 31st December 1989, the trustees' liability to income tax in respect of any source of income chargeable under Case III of Schedule D shall be assessed as if they had ceased to possess the source of income on the last day of that distribution period.
But where section 67 of the Taxes Act 1988 applies by virtue of subsection (2) above, it shall apply with the omission from subsection (1)(b) of the words from “and shall” to “this provision”.
For the purposes of this section “certified unit trust” means, as respects a distribution period, a unit trust scheme in the case of which—
an order under section 78 of the Financial Services Act 1986 is in force during the whole or part of the accounting period in which the distribution period falls, and
a certificate under section 78(8) of that Act, certifying that the scheme complies with the conditions necessary for it to enjoy the rights conferred by the UCITS directive, has been issued before or at any time during that accounting period.
In this section—
“distribution period” has the same meaning as in section 468 of the Taxes Act 1988,
“unit trust scheme” has the same meaning as in section 469 of the Taxes Act 1988.
In section 758 of the Taxes Act 1988 (offshore funds operating equalisation arrangements) in subsection (6) (reference to section 78 of the Capital Gains Tax Act 1979 not to include reference to it as applied by section 82) for the words “but not” there shall be substituted the words “and a reference to section 78”.
This section shall apply where a conversion of securities occurs on or after 14th March 1989; and “conversion of securities” here has the same meaning as in section 82 of the Capital Gains Tax Act 1979.
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Where the profits of an insurance company in respect of its life assurance business are, for the purposes of the Taxes Act 1988, computed in accordance with the provisions of that Act applicable to Case I of Schedule D, then, in calculating the profits for any period of account,—
there shall be taken into account as an expense (so far as not so taken into account apart from this section) any amounts which, in respect of the period, are allocated to or expended on behalf of policy holders or annuitants; and
if, at the end of the period, the company has an unappropriated surplus on valuation, as shown in its return for the purposes of the Insurance Companies Act 1982, then, subject to subsection (3) below, the closing liabilities of the period may include such amount, forming part of that surplus, as is required to meet the reasonable expectations of policy holders or annuitants with regard to bonuses or other additions to benefit of a discretionary nature.
For the purposes of this section an amount is allocated to policy holders or annuitants if, and only if,— and the amount of the allocation is, in a case within paragraph (a) above, the amount of the payments and, in a case within paragraph (b) above, the amount of the liabilities assumed by the company in consequence of the declaration or reduction.
bonus payments are made to them; or
reversionary bonuses are declared in their favour or a reduction is made in the premiums payable by them;
The amount which, apart from this subsection, would be included in the closing liabilities of a period of account by virtue of subsection (1)(b) above shall be reduced or, as the case may be, extinguished by deducting therefrom the total of the amounts which—
for periods of account ending before 14th March 1989 have been excluded, by virtue of section 433 of the Taxes Act 1988, as being reserved for policy holders or annuitants, and
have not before that date either been allocated to or expended on behalf of policy holders or annuitants or been treated as profits of an accounting period on ceasing to be so reserved.
Where the closing liabilities of a period of account include an amount by virtue of subsection (1)(b) above, the like amount shall be included in the opening liabilities of the next following period of account.
This section has effect with respect to periods of account ending on or after 14th March 1989; and the following provisions of this section shall apply for the purposes of the application of this section to any such period which begins before that date (in this section referred to as a “straddling period”).
For the purposes referred to in subsection (5) above, it shall be assumed that the straddling period consists of two separate periods of account,— and any reference in subsection (7) or subsection (8) below to a time apportionment is a reference to an apportionment made by reference to the respective lengths of the two notional periods.
the first beginning at the beginning of the straddling period and ending on 13th March 1989 (in this section referred to as “the first notional period”); and
the second beginning on 14th March 1989 and ending at the end of the straddling period (in this section referred to as “the second notional period”);
To determine the profits of the first notional period and the amount excluded from the profits of that period by virtue of section 433 of the Taxes Act 1988 as being reserved for policy holders or annuitants,—
in the first instance the profits of the straddling period and the amount so excluded from those profits shall be computed as if subsections (1) to (4) above did not apply with respect to any part of the straddling period; and
there shall then be determined that part of the profits and the amount computed under paragraph (a) above which, on a time apportionment, is properly attributable to the first notional period.
To determine the profits of the second notional period,—
in the first instance the profits of the straddling period shall be computed as if subsections (1) to (4) above applied to the whole of the straddling period; and
there shall then be determined that part of the profits computed under paragraph (a) above which, on a time apportionment, is properly attributable to the second notional period.
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Where the profits of an insurance company in respect of its life assurance business are, for the purposes of the Taxes Act 1988, computed in accordance with the provisions of that Act applicable to Case I of Schedule D, then, so far as referable to that business, the following items, as brought into account for a period of account (and not otherwise), namely,— shall be taken into account as receipts of the period; and if for any period of account there is a reduction in the value referred to in paragraph (b) above (as brought into account for the period), that reduction shall be taken into account as an expense of that period.
the company’s investment income from the assets of its long-term business fund, and
any increase in the value (whether realised or not) of those assets,
Except in so far as regulations made by the Treasury otherwise provide, in subsection (1) above “brought into account” means brought into account in the revenue account prepared for the purposes of the Insurance Companies Act 1982.
Subject to subsection (5) below, this section has effect with respect to periods of account ending on or after 1st January 1990; and the following provisions of this section shall apply for the purposes of the application of this section to any such period which begins before that date (in this section referred to as a “straddling period”).
Subject to subsection (5) below, for the purposes referred to in subsection (3) above, it shall be assumed that the straddling period consists of two separate periods of account,— and any reference in subsection (6) or subsection (7) below to a time apportionment is a reference to an apportionment made by reference to the respective lengths of the two notional periods.
the first beginning at the beginning of the straddling period and ending on 31st December 1989 (in this section referred to as “the first notional period”); and
the second beginning on 1st January 1990 and ending at the end of the straddling period (in this section referred to as “the second notional period”);
In the case of any company which, by notice in writing given to the inspector on or before 31st December 1992, so elects,—
subsections (3) and (4)(b) above shall have effect as if for “1st January 1990” there were substituted “14th March 1989”; and
subsection (4)(a) above shall have effect as if for “31st December” there were substituted “13th March”.
To determine the profits of the first notional period,—
in the first instance the profits of the straddling period shall be computed as if subsections (1) and (2) above did not apply with respect to any part of that period; and
there shall then be determined that part of the profits computed under paragraph (a) above which, on a time apportionment, is properly attributable to the first notional period.
To determine the profits of the second notional period,—
in the first instance the profits of the straddling period shall be computed as if subsections (1) and (2) above applied with respect to the whole of that period; and
there shall then be determined that part of the profits computed under paragraph (a) above which, on a time apportionment, is properly attributable to the second notional period.
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the first beginning at the beginning of the straddling period and ending on 31st December 1989; and
the second beginning on 1st January 1990 and ending at the end of the straddling period;
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amendments relating to franked investment income, loss relief and group relief; and
amendments consequential on or supplemental to sections 82 and 83 above and sections 85 to 89 below.
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paragraphs 2 and 6 shall be deemed to have come into force on 14th March 1989; and
the remainder shall have effect with respect to accounting periods beginning on or after 1st January 1990 (including the 1990 component period).
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Subject to subsection (2) below, where the profits of an insurance company in respect of its life assurance business are not charged under Case I of Schedule D, there shall be chargeable under Case VI of that Schedule any receipts referable to the company’s basic life assurance business— and for the purposes of paragraph (a) above, the provisions of section 83 above as to the manner in which any item is to be taken into account shall be disregarded.
which, if those profits were charged under Case I of Schedule D, would be taken into account in computing those profits; and
which would not be within the charge to tax (except under Case I of Schedule D) apart from this section;
The receipts referred to in subsection (1) above do not include—
any premium; or
any sum received by virtue of a claim under an insurance contract (including a re-insurance contract); or
any repayment or refund (in whole or in part) of a sum disbursed by the company as acquisition expenses falling within paragraphs (a) to (c) of subsection (1) of section 86 below; or
any sum which is taken into account under section 76(1)(a) of the Taxes Act 1988 as a deduction from the amount treated as expenses of management of the company; or
any sum which is not within the charge to tax (except under Case I of Schedule D) because of an exemption from tax.
This section has effect with respect to the receipts of accounting periods beginning on or after 1st January 1990 (including the 1990 component period).
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For the purposes of this section, the acquisition expenses for any period of an insurance company carrying on life assurance business are such of the following expenses of management as are for that period attributable to the company’s basic life assurance business,— less any such repayments or refunds falling within section 76(1)(c) of the Taxes Act 1988 as are received in the period.
commissions (however described), other than commissions in respect of industrial life assurance business carried on by the company,
any other expenses of management which are disbursed solely for the purpose of the acquisition of business, and
so much of any other expenses of management which are disbursed partly for the purpose of the acquisition of business and partly for other purposes as are properly attributable to the acquisition of business,
The exclusion from paragraph (a) of subsection (1) above of commissions in respect of industrial life assurance business shall not prevent such commissions constituting expenses of management for the purposes of paragraph (b) or paragraph (c) of that subsection.
Nothing in subsections (1) and (2) above applies to commissions (however described) in respect of insurances made before 14th March 1989, but without prejudice to the application of those subsections to any commission attributable to a variation on or after that date in a policy issued in respect of an insurance made before that date; and, for this purpose, the exercise of any rights conferred by a policy shall be regarded as a variation of it.
In subsection (1) above “the acquisition of business” includes the securing on or after 14th March 1989 of the payment of increased or additional premiums in respect of a policy of insurance issued in respect of an insurance already made (whether before, on or after that date).
In relation to any period, the expenses of management attributable to a company’s basic life assurance business are expenses—
which are disbursed for that period (disregarding any treated as so disbursed by section 75(3) of the Taxes Act 1988); and
which, disregarding subsection (6) below, are deductible as expenses of management in accordance with sections 75 and 76 of the Taxes Act 1988.
Notwithstanding anything in sections 75 and 76 of the Taxes Act 1988 but subject to subsection (7) below, only one-seventh of the acquisition expenses for any accounting period (in this section referred to as “the base period”) shall be treated as deductible under those sections for the base period, and in subsections (8) and (9) below any reference to the full amount of the acquisition expenses for the base period is a reference to the amount of those expenses which would be deductible for that period apart from this subsectio
In the case of the acquisition expenses for an accounting period or part of an accounting period falling wholly within 1990, subsection (6) above shall have effect as if for “one-seventh” there were substituted “five-sevenths”; and, in the case of the acquisition expenses for an accounting period or part of an accounting period falling wholly within 1991, 1992 or 1993, the corresponding substitution shall be “four-sevenths”, “three-sevenths” or “two-sevenths” respectively.
Where, by virtue of subsection (6) (and, where appropriate, subsection (7)) above, only a fraction of the full amount of the acquisition expenses for the base period is deductible under sections 75 and 76 of the Taxes Act 1988 for that period, then, subject to subsection (9) below, a further one-seventh of the full amount shall be so deductible for each succeeding accounting period after the base period until the whole of the full amount has become so deductible, except that, for any accounting period of less thaa year, the fraction of one-seventh shall be proportionately reduced.
For any accounting period for which the fraction of the full amount of the acquisition expenses for the base period which would otherwise be deductible in accordance with subsection (8) above exceeds the balance of those expenses which has not become deductible for earlier accounting periods, only that balance shall be deductible.
This section has effect for accounting periods beginning on or after 1st January 1990 (including the 1990 component period).
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Section 76 of the Taxes Act 1988 shall be amended in accordance with subsections (2) and (3) below.
and for this purpose “net income and gains” means income and gains after deducting any reliefs or exemptions which fall to be applied before taking account of this section.
For subsection (8) there shall be substituted—
In consequence of the amendment made by subsection (2) above, section 436(3)(b) of the Taxes Act 1988 (no deduction of expenses of management in certain cases) shall cease to have effect.
This section has effect with respect to accounting periods beginning on or after 1st January 1990; and, in relation to a straddling period, sections 75, 76 and 436 of the Taxes Act 1988—
shall have effect in relation to the 1989 component period without regard to the amendments made by subsections (2) to (4) above; and
shall have effect in relation to the 1990 component period as amended by those subsections.
If, for the 1989 component period, there is an amount of expenses of management available to be carried forward to the 1990 component period under section 75(3)(a) of the Taxes Act 1988 (as applied by section 76 thereof),—
that amount shall form a pool to which the following provisions of this section shall apply and to which section 75(3)(b) of that Act (in this subsection referred to as “the carry-forward provision”) shall apply only to the extent specified in paragraph (c) below;
if, for the 1990 component period or any subsequent accounting period, the amount which (disregarding the pool) may be deducted in respect of expenses of management is less than the amount of the profits from which, disregarding section 76(1)(e) of that Act (as set out in subsection (2) above), the expenses of management are deductible, paragraph (c) below shall apply for that period; and in that paragraph the difference between the amount which may be so deducted and that amount of profits is referred to as “the potetial deficiency” for the period;
where this paragraph applies for an accounting period (including the 1990 component period) the carry-forward provision shall be taken to have had effect to carry forward to the accounting period (as if disbursed as expenses for that period) so much of the pool as does not exceed the potential deficiency for the period and is permitted under section 76(2) of the Taxes Act 1988; and the amount of the pool shall be reduced accordingly.
In the case of a company which has an accounting period beginning on 1st January 1990, subsection (6) above shall apply as if—
any reference therein to the 1989 component period were a reference to the accounting period ending on 31st December 1989; and
any reference therein to the 1990 component period were a reference to the accounting period beginning on 1st January 1990.
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Subject to subsection (2) below, in the case of a company carrying on life assurance business, the rate of corporation tax chargeable for any financial year on the policy holders' fraction of its relevant profits for any accounting period shall be deemed to be the rate at which income tax at the basic rate is charged for the year of assessment which begins on 6th April in the financial year concerned.
Subsection (1) above does not apply in relation to profits charged under Case I of Schedule D.
For the purposes of subsection (1) above, the relevant profits of a company for an accounting period are the total profits of its life assurance business, less any deduction due under section 76 of the Taxes Act 1988, but before allowing any relief under Chapter II or Chapter IV of Part X of that Act.
In determining for the purposes of section 13 of the Taxes Act 1988 (small companies' relief) the profits and basic profits (within the meaning of that section) of an accounting period of a company carrying on life assurance business, the policy holders' fraction of the company’s relevant profits for that period shall be left out of account.
This section has effect with respect to the profits of a company for accounting periods beginning on or after 1st January 1990 (including the 1990 component period); and, for this purpose, the profits of the 1990 component period shall be taken to be that portion of the profits of the straddling period which the length of the 1990 component period bears to the length of the straddling period.
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In relation to an accounting period of an insurance company carrying on life assurance business, any reference to the shareholders' fraction or the policy holders' fraction is a reference to the appropriate fraction determined, subject to subsections (7) and (8) below, by the formulae in subsection (2) below.
The formulae referred to in subsection (1) above are— and
for the shareholders' fraction,
for the policy holders' fraction, where “A” and “B” are determined in accordance with the following provisions of this section.
In the formulae in subsection (2) above “A” is the profits of the company for the accounting period in respect of its life assurance business, computed in accordance with the provisions of the Taxes Act 1988 applicable to Case I of Schedule D, and, if there are no such profits (or there is a loss), “A” is zero.
Subject to subsection (6) below, in those formulae “B” is such a sum as, after deduction of corporation tax at the rate provided for by subsection (1) of section 88 above in relation to the policy holders' fraction of the company’s relevant profits for the accounting period (within the meaning of that subsection), is equal to the excess (if any) for the corresponding period of account of— and, if there is no such excess, “B” is zero.
the aggregate of— over
the closing liabilities to policy holders referable to the company’s basic life assurance business,
the sums paid to policy holders in the period in respect of claims referable to that business, and
any amounts allocated to policy holders in respect of that period which do not fall within sub-paragraph (i) or sub-paragraph (ii) above and which are referable to that business,
the aggregate of the premiums receivable by the company for the period in respect of its basic life assurance business and the opening liabilities to policy holders referable to that business,
The references in subsection (4) above to the opening and closing liabilities to policy holders are references to those liabilities including any such amount as is referred to in section 82(1)(b) above.
In relation to an accounting period, references in subsection (4) above to the corresponding period of account are references,— and, for the purpose of determining “B” in a case where paragraph (b) above applies, the aggregates referred to in paragraphs (a) and (b) of subsection (4) above shall each be proportionately reduced to reflect the length of the accounting period as compared with the length of the corresponding period of account.
if the accounting period coincides with a period of account, to that period; and
in any other case, to the period of account in which the accounting period is comprised;
Subject to subsection (8) below, if in the case of any accounting period of a company both “A” and “B” in the formulae in subsection (2) above are zero,—
the shareholders' fraction shall be taken to be the whole; and
the policy holders' fraction shall be taken to be nil.
In relation to an accounting period of an insurance company carrying on mutual life assurance business,—
any reference to the shareholders' fraction is a reference to nil; and
any reference to the policy holders' fraction is a reference to the whole.
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In section 725 of the Taxes Act 1988 (Lloyd’s underwriters) the following subsections shall be inserted after subsection (9)—
In section 142A of the Capital Gains Tax Act 1979 (assets in premiums trust fund) the following subsections shall be inserted after subsection (4)—
This section applies where the transfer by the trustees of a premiums trust fund is made after the date specified as mentioned in section 129(6) of the Taxes Act 1988.
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shall be made by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons;
may make different provision for different provisions or different purposes.
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Section 126 of the Taxes Act 1988 (tax not to be charged on certain securities in respect of discount under Case III of Schedule D) shall be amended as mentioned in subsections (2) and (3) below.
In subsection (2) (the securities affected) for the words “except Treasury bills” there shall be substituted the words except—
The following subsection shall be inserted after subsection (2)—
The preceding provisions of this section shall apply—
in the case of a deep discount security, where there is a disposal (within the meaning of Schedule 4 to the Taxes Act 1988) on or after 14th March 1989;
in the case of a deep gain security, where there is a transfer within the meaning of Schedule 11 to this Act, or a redemption, on or after 14th March 1989.
Subsection (7) below applies where—
by virtue of paragraph 19(2) of Schedule 4 to the Taxes Act 1988, a security falls to be treated as a deep discount security as there mentioned, and
after the time mentioned in paragraph 19(1)(d) of that Schedule there is a disposal (within the meaning of that Schedule) of the security.
Subsection (7) below also applies where—
by virtue of paragraph 20(2) of Schedule 11 to this Act, a security falls to be treated as a deep gain security as there mentioned, and
after the time mentioned in paragraph 20(1)(d) of that Schedule there is a transfer (within the meaning of that Schedule) or a redemption of the security.
In a case where this subsection applies, section 126 of the Taxes Act 1988 shall not apply in the case of the disposal, transfer or redemption (as the case may be).
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in the case of a deep discount security, where there is a disposal (within the meaning of Schedule 4 to the Taxes Act 1988) on or after 14th March 1989;
in the case of a deep gain security, where there is a transfer within the meaning of Schedule 11 to this Act, or a redemption, on or after 14th March 1989.
In section 240 of the Taxes Act 1988 (set-off of company’s ACT against subsidiary’s liability to corporation tax) at the end of subsection (5)(set-off not to be made against subsidiary’s liability to corporation tax for any accounting period in which, or in any part of which, it was not a subsidiary of the surrendering company) there shall be added the words “unless throughout that period or part both companies were subsidiaries of a third company”.
This section shall have effect in relation to accounting periods ending on or after 14th March 1989.
After section 245 of the Taxes Act 1988 there shall be inserted—
This section shall have effect where the change in the ownership of the relevant company occurs on or after 14th March 1989.
Section 247 of the Taxes Act 1988 (dividends etc. paid by one member of a group to another) shall be amended in accordance with this section.
In subsection (1) for paragraph (b) there shall be substituted—.
After subsection (1) there shall be inserted—
After subsection (8) there shall be inserted—
For subsection (9)(c) there shall be substituted—
After subsection (9) there shall be inserted—
This section shall have effect in relation to dividends and other sums paid on or after the day on which this Act is passed.
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Section 769 of the Taxes Act 1988 (which contains rules for determining whether for the purposes of sections 245 and 768 of that Act there is a change in the ownership of a company) shall be amended in accordance with this section.
For subsection (6) there shall be substituted—
Subsection (7)(b) and (c) shall cease to have effect.
This section shall have effect where the change of ownership of a company would be treated as occurring on or after 14th March 1989.
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Paragraph 1 of Schedule 18 to the Taxes Act 1988 (which contains definitions relating to group relief) shall be amended in accordance with this section.
For sub-paragraph (3)(b) there shall be substituted—.
For sub-paragraph (5)(a) there shall be substituted—.
This sub-paragraph applies to any shares which— This sub-paragraph applies to any securities representing a loan of or including new consideration and— For the purposes of sub-paragraphs (3) and (5) to (5B) above a company (“the parent company”) is another company’s “quoted parent company” if and only if— and in this sub-paragraph “ordinary shares” means shares forming part of ordinary share capital. In the application of sub-paragraphs (3) and (5) to (5B) above in determining for the purposes of sub-paragraph (5C)(a) above who are the equity holders of the other company (and, accordingly, whether section 413(7) prevents the other company from being treated as a 75 per cent. subsidiary of the parent company for the purposes of sub-paragraph (5C)(a)), it shall be assumed that the parent company is for the purposes of sub-paragraphs (3) and (5) to (5B) above the other company’s quoted parent company.
In sub-paragraph (6) for the words “to (5)” there shall be substituted the words “to (5D)”.
This section, so far as relating to Schedule 18 of the Taxes Act 1988 in its application (by virtue of section 138 below) for the purposes of subsections (1D) and (1E) of section 272 of the Taxes Act 1970, shall be deemed to have come into force on 14th March 1989.
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Subsection (2) below applies where—
there falls to be made to a company (“the surrendering company”) which is a member of a group throughout the appropriate period a tax refund relating to an accounting period of the company (“the relevant accounting period”), and
another company (“the recipient company”) which is a member of the same group throughout the appropriate period also has the relevant accounting period as an accounting period.
Where this subsection applies the two companies may, at any time before the refund is made to the surrendering company, jointly give notice to the inspector in such form as the Board may require that subsection (4) below is to have effect in relation to the refund or to any part of the refund specified in the notice.
In subsection (1) above—
“appropriate period” means the period beginning with the relevant accounting period and ending on the day on which the notice under subsection (2) above is given, and
Section 6.
Plated gross weight of vehicle Rate of duty (1) Exceeding (2) Not exceeding (3) Two axle vehicle (4) Three axle vehicle (5) Four or more axle vehicle tonnes tonnes £ £ £ 12 13 450 340 340 13 14 630 340 340 14 15 810 340 340 15 17 1,230 340 340 17 19 600 340 19 21 800 340 21 23 1,100 490 23 25 1,980 760 25 27 1,220 27 29 1,790 29 30.49 2,780
Plated gross weight of vehicle Rate of duty (1) Exceeding (2) Not exceeding (3) Two axle vehicle (4) Three axle vehicle (5) Four or more axle vehicle tonnes £ £ £ 12 13 270 205 205 13 14 380 205 205 14 15 490 205 205 15 17 740 205 205 17 19 360 205 19 21 480 205 21 23 660 295 23 25 1,190 460 25 27 735 27 29 1,075 29 30.49 1,670
Plated gross weight of vehicle Rate of duty (1) Exceeding (2) Not exceeding (3) Two axle vehicle (4) Three axle vehicle (5) Four or more axle vehicle tonnes tonnes £ £ £ 12 13 115 90 90 13 14 160 90 90 14 15 205 90 90 15 17 310 90 90 17 19 150 90 19 21 200 90 21 23 275 125 23 25 495 190 25 27 305 27 29 450 29 30.49 695
Section 8.
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after paragraph 1 there shall be inserted—;
In this Schedule “tractor” means a vehicle which is either—
in paragraph 3(b), for the words “neither carries nor hauls any load than” there shall be substituted the words “does not carry any load except”;
in paragraph 4(b), for the words “neither carries nor hauls any load than” there shall be substituted the words “does not carry any load except”;
paragraph 5A shall be omitted; and
in paragraph 6, for the words from “(other than” to “8 below)” there shall be substituted the words “(other than a special machine, a recovery vehicle or a vehicle to which Schedule 4A to this Act applies)”.
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in paragraph 11, for sub-paragraphs (b) and (c) there shall be substituted—;
paragraphs 12 and 13 shall be omitted; and
in paragraph 15(1), the definitions of “agricultural machine”, “fisherman’s tractor”, “mobile crane”, “recovery vehicle” and “works truck” shall be omitted.
Group 8—Construction of Dwellings, Etc. Item No. “Grant” includes assignment. “Dwelling” includes a garage constructed at the same time asa dwelling for occupation together with it. Use for a relevant residential purpose means use as— except use as a hospital, a prison or similar institution or an hotel,inn or similar establishment. Use for a relevant charitable purpose means use by a charity in either orboth of the following ways, namely— Where part of a building is designed as a dwelling or number of dwellingsor intended for use solely for a relevant residential purpose or a relevantcharitable purpose (and part is not)— Where all or part of a building is intended for use solely for a relevantresidential purpose or a relevant charitable purpose— The grant of an interest in, or in part of, a building designed as adwelling or number of dwellings is not within item 1 if— Where the major interest referred to in item 1 is a tenancy orlease— The reference in item 2 to the construction of a building or work does notinclude a reference to— and the reference in item 1 to a person constructing a building shall beconstrued accordingly. A caravan is not a residential caravan if residence in it throughout theyear is prevented by the terms of a covenant, statutory planning consent orsimilar permission. Item 2 does not include the supply of services described in paragraph 1(1)or 5(3) of Schedule 2 to this Act. The goods referred to in item 3 do not include— Section 16(3) of this Act does not apply to goods forming part of adescription of supply in this Group.
Group 8A (protected buildings) of that Schedule shall be amended asfollows. In item 1, for the word “granting” there shall be substituted theword “grant”. In Note (1), for the words “a building which” there shall besubstituted the words “a building which is designed to remain as or becomea dwelling or number of dwellings or is intended for use solely for a relevantresidential purpose or a relevant charitable purpose after the reconstructionor alteration and which, in either case,”. After that Note there shall be inserted— Note (5) shall be omitted. After Note (6) there shall be inserted— The following Note shall be substituted for Note (7)—
In Group 11 (caravans and houseboats) of that Schedule, for paragraph (b)of the Note there shall be substituted—
Group 1 – Land Item No. “Grant” includes an assignment, other than an assignment ofan interest made to the person to whom a surrender of the interest could bemade. A building shall be taken to be completed when an architect issues acertificate of practical completion in relation to it or it is first fullyoccupied, whichever happens first; and a civil engineering work shall be takento be completed when an engineer issues a certificate of completion inrelation to it or it is first fully used, whichever happens first. Notes (2) to (6) to Group 8 of Schedule 5 to this Act apply in relationto this Group as they apply in relation to that Group. A building or civil engineering work is new if it was completed less thanthree years before the grant. Subject to Note (6), the grant of the fee simple in a building or workcompleted before 1st April 1989 is not excluded from this Group by paragraph(a)(ii) or (iv). Note (5) does not apply where the grant is the first grant of the feesimple made on or after 1st April 1989 and the building was not fullyoccupied, or the work not fully used, before that date. Where a grant of an interest in, right over or licence to occupy landincludes a valuable right to take game or fish, an apportionment shall be madeto determine the supply falling outside this Group by virtue of paragraph (b). “Similar establishment” includes premises in which there isprovided furnished sleeping accommodation, whether with or without theprovision of board or facilities for the preparation of food, which are usedby or held out as being suitable for use by visitors or travellers. “Houseboat” includes a houseboat within the meaning of Group11 of Schedule 5 to this Act. “Holiday accommodation” includes any accommodation advertisedor held out as such. A seasonal pitch is a pitch— “Mooring” includes anchoring or berthing. Paragraph (k) shall not apply where the grant of the facilities isfor— In consequence of the amendment made by sub-paragraph (1) above, inparagraph 9(1) of Schedule 4 to the Value Added Tax Act1983 for “(a)” there shall be substituted “(c)”.
The following section shall be substituted for section 21 (refund of taxto person constructing dwelling) of the Value Added Tax Act 1983—
The following section shall be inserted in the ValueAdded Tax Act 1983 after section 35— The following Schedule shall be inserted in the Value Added Tax Act 1983after Schedule 6—
In section 42 (adjustment of consideration on changes in tax) of the Value Added Tax Act 1983—
the following subsection shall be inserted after subsection (1)—, and
in subsection (2), the words “(including a change attributable tothe making of an election under paragraph 2 of Schedule 6A to thisAct)” shall be added at the end.
In section 45(4) (orders etc.) of the Value Added TaxAct 1983, there shall be added after paragraph (c)—
“fee simple”—
In Schedule 1 (registration) to the Value Added Tax Act 1983—
in paragraph 1 there shall be added at the end—, and
in paragraph 2 there shall be added at the end—
In Schedule 2 (supplies of goods and services) to the Value Added Tax Act1983—
in paragraph 4, for the word “granting” there shall be substitutedthe word “grant”,
in paragraph 5(1), for the words “the goods” there shall besubstituted the word “goods”, and
there shall be added at the end—
Subject to sub-paragraphs (2) and (3) and paragraph 13 below, theamendments made by paragraphs 1 to 4 of this Schedule shall have effect inrelation to grants, assignments and other supplies made on or after 1st April1989. Note 4(b) to Group 8 of Schedule 5 to the Value AddedTax Act 1983 shall have effect in relation to grants, assignments and othersupplies made on or after 1st August 1989. In relation to grants and assignments made on or after 1st April 1989 butbefore 1st August 1989— Paragraphs 5, 7, 8, 11 and 13(6) and (7) of this Schedule and paragraph6, so far as relating to section 35A(2) of, and paragraphs 2 to 7 of Schedule6A to, the Value Added Tax Act 1983, shall come into force on 1st August 1989. Subject to the preceding provisions of this paragraph, this Schedule shallcome into force on 1st April 1989.
Subject to sub-paragraph (3) below, the amendments made by paragraphs 1and 2 of this Schedule shall not have effect in relation to a grant,assignment or other supply where— Subject to sub-paragraph (3) below, the amendments made by paragraphs 1and 2 of this Schedule shall not have effect in relation to a grant orassignment of an interest in, or in any part of, a building or its sitewhere— Where the grant or assignment is of a tenancy or lease— The amendments made by paragraphs 1 and 2 of this Schedule shall not haveeffect in relation to a supply relating to a building or civil engineeringwork where— Where a grant, assignment or other supply is zero-rated by virtue of thisparagraph, it is not a relevant zero-rated supply for the purposes ofparagraph 1 of Schedule 6A to the Value Added Tax Act1983. Nothing in paragraphs 5 and 6 of that Schedule shall apply— If the Commissioners so require, proof of any of the matters specified insub-paragraph (6)(a), (b) or (c)(i) above shall be given to their satisfactionby the production of documents made before 21st June 1988.
The Taxes Act 1988 shall be amended in accordance with the followingprovisions of this Schedule.
In section 171(4) (limit on pay of which half may be exempt from tax) for “£3,000” there shall be substituted “£4,000”. This paragraph shall have effect in relation to profit-related pay paidby reference to profit periods beginning on or after 1st April 1989.
After section 177 there shall be inserted—
Section 178 (cancellation of registration) shall be amended as follows. In subsection (1) for the words “subsection (5)” there shall besubstituted the words “subsections (5) and (5A)”. After subsection (3) there shall be inserted— After subsection (5) there shall be inserted—
At the end of section 179 (recovery of tax) there shall be added—
At the end of section 180 (annual returns) there shall be added—
At the end of section 181 (information) there shall be added—
Section 182 (appeals) shall be amended as follows. In subsection (1) after paragraph (b) there shall be inserted—. After subsection (1) there shall be inserted— In subsection (2) for the words “scheme employer” there shall besubstituted the word “appellant”.
Paragraph 7 of Schedule 8 (no payments for employees with materialinterest in company) shall be amended as follows. In sub-paragraph (1), the words “, or is an associate of a person who has,” shall be omitted. In sub-paragraph (3), after the words “section 417(3) and (4)” thereshall be inserted the words “, but subject to sub-paragraph (4) below”. divided by the number of the periods mentioned in paragraphs (a) to(c) above in which distributions were so made.
Paragraphs 13(2) and 14(2) of Schedule 8 (which provide for a scheme’sdistributable pool to be at least 5 per cent. of the pay of all the employeesto whom the scheme relates if profits remain unchanged) shall be omitted. In consequence of sub-paragraph (1) above—
Any provision included in a scheme by virtue of sub-paragraph (4) or (5)above may take effect either from the scheme’s first profit period or from anylater profit period determined in accordance with the scheme.
In paragraph 14 of Schedule 8 (calculation of distributable pool by methodB), in sub-paragraph (5) the words “specified in, or” shall be omitted.
Any provision included in a scheme by virtue of sub-paragraph (3)(b), (4)or (5) above may take effect either from the scheme’s first profit period orfrom any later profit period determined in accordance with the scheme.
Paragraph 19 of Schedule 8 (profit and loss account for purposes ofprofit-related pay scheme) shall be amended as follows. After sub-paragraph (4) (account to make no allowance for remuneration ofpersons excluded from scheme) there shall be inserted— In sub-paragraph (6) (items which may be left out of account in arrivingat profits or losses) for paragraph (f) there shall be substituted—.
After paragraph 20 of Schedule 8 there shall be inserted—
Section 74.
A trust is a qualifying employee share ownership trust at the time it isestablished if the conditions set out in paragraphs 2 to 11 below aresatisfied in relation to the trust at that time.
The trust must be established under a deed (the trust deed). The trust must be established by a company (the founding company) which,at the time the trust is established, is resident in the United Kingdom andnot controlled by another company.
The trust deed must provide for the establishment of a body of trustees. The trust deed must— The trust deed must provide that at any time while the trust subsists (therelevant time)— For the purposes of sub-paragraph (3) above a company falls within thefounding company’s group at a particular time if— This paragraph applies in relation to trusts established on or before the day on which the Finance Act 1994 was passed.
Where a trust is established after the day on which the Finance Act 1994 was passed, the trust deed must make provision as mentioned in one of paragraphs (a) to (c) below—
provision for the establishment of a body of trustees and complying with paragraph 3(2) to (4) above;
provision for the establishment of a body of trustees and complying with paragraph 3B(2) to (9) below;
provision that at any time while the trust subsists there must be a single trustee.
The following are the provisions that must be complied with under paragraph 3A(b) above. The trust deed must— The trust deed must be so framed that at any time while the trust subsists the conditions set out in sub-paragraph (4) below are fulfilled as regards the persons who are then trustees; and in that sub-paragraph “the relevant time” means that time. The conditions are that— For the purposes of this paragraph a trustee is a professional trustee at a particular time if— and for the purposes of this paragraph a trustee is a non-professional trustee at a particular time if the trustee is not then a professional trustee for those purposes. A trustee meets the requirements of this sub-paragraph if— Trustees are selected in accordance with this sub-paragraph if the process of selection is one under which— Trustees are selected in accordance with this sub-paragraph if they are selected by persons elected to represent the employees of the companies falling within the founding company’s group at the time of the selection. For the purposes of this paragraph a company falls within the founding company’s group at a particular time if—
This paragraph applies where the trust deed provides that at any time while the trust subsists there must be a single trustee. The trust deed must— The trust deed must be so framed that at any time while the trust subsists the company which is then the trustee is a company so constituted that the conditions set out in sub-paragraph (4) below are then fulfilled as regards the persons who are then directors of the company; and in that sub-paragraph “the relevant time” is that time and “the trust company” is that company. The conditions are that— For the purposes of this paragraph a director is a professional director at a particular time if— and for the purposes of this paragraph a director is a non-professional director at a particular time if the director is not then a professional director for those purposes. A director meets the requirements of this sub-paragraph if— Directors are selected in accordance with this sub-paragraph if the process of selection is one under which— Directors are selected in accordance with this sub-paragraph if they are selected by persons elected to represent the employees of the companies falling within the founding company’s group at the time of the selection. For the purposes of this paragraph a company falls within the founding company’s group at a particular time if—
The trust deed must contain provision as to the beneficiaries under thetrust, in accordance with the following rules. The trust deed must provide that a person is a beneficiary at a particulartime (the relevant time) if— The trust deed may provide that a person is a beneficiary at a given time if at that time he is eligible to participate in an SAYE option scheme— Where a trust deed contains a rule conforming with sub-paragraph (2A) above it must provide that the only powers and duties which the trustees may exercise in relation to persons who are beneficiaries by virtue only of that rule are those which may be exercised in accordance with the provisions of a scheme such as is mentioned in that sub-paragraph. The trust deed may provide that a person is a beneficiary at a particulartime (the relevant time) if— The trust deed may provide for a person to be a beneficiary if the personis a charity and the circumstances are such that— For the purposes of sub-paragraph (2) above a qualifying period is aperiod— For the purposes of sub-paragraph (3) above a qualifying period is aperiod— The trust deed must not provide for a person to be a beneficiary unlesshe falls within any rule which is included in the deed and conforms withsub-paragraph (2) , (2A), (3) or (4) above. The trust deed must provide that, notwithstanding any other rule which isincluded in it, a person cannot be a beneficiary at a particular time (therelevant time) by virtue of a rule which conforms with sub-paragraph (2), (3) or (4) above if— For the purposes of this paragraph a company falls within the foundingcompany’s group at a particular time if— . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The trust deed must contain provision as to the functions of the trustees. The functions of the trustees must be so expressed that it is apparentthat their general functions are—
The trust deed must require that any sum received by the trustees— For the purposes of sub-paragraph (1) above the relevant period is theperiod of nine months beginning with the day found as follows— For the purposes of sub-paragraph (1) above each of the following is aqualifying purpose— The trust deed must provide that, in ascertaining for the purposes of arelevant rule whether a particular sum has been expended, sums receivedearlier by the trustees shall be treated as expended before sums received bythem later; and a relevant rule is one which is included in the trust deed andconforms with sub-paragraph (1) above. The trust deed must provide that, where the trustees pay sums to differentbeneficiaries at the same time, all the sums must be paid on similar terms. For the purposes of sub-paragraph (5) above, the fact that terms varyaccording to the levels of remuneration of beneficiaries, the length of theirservice, or similar factors, shall not be regarded as meaning that the termsare not similar.
Subject to paragraph 8 below, the trust deed must provide that securitiesacquired by the trustees must be shares in the founding company which— Subject to sub-paragraph (3) below, a restriction is authorised by thissub-paragraph if— A restriction is not authorised by sub-paragraph (2) above unless— The trust deed must provide that shares in the founding company may notbe acquired by the trustees at a price exceeding the price they mightreasonably be expected to fetch on a sale in the open market. The trust deed must provide that shares in the founding company may notbe acquired by the trustees at a time when that company is controlled byanother company.
The trust deed may provide that the trustees may acquire securities otherthan shares in the founding company—
if they are securities issued to the trustees in exchange in circumstancesmentioned in section [135(1) of the Taxation of Chargeable Gains Act1992], or
if they are securities acquired by the trustees as a result of areorganisation, and the original shares the securities represent are sharesin the founding company (construing “reorganisation” and “originalshares” in accordance with section 126 of that Act).
The trust deed must provide that— For the purposes of sub-paragraph (1) above a transfer of securities ismade on qualifying terms if— For the purposes of sub-paragraph (1) above a transfer of securities is also made on qualifying terms if— For the purposes of sub-paragraph (1) above the qualifying period is— For the purposes of sub-paragraph (2) above, the fact that terms varyaccording to the levels of remuneration of beneficiaries, the length of theirservice, or similar factors, shall not be regarded as meaning that the termsare not similar. The trust deed must provide that, in ascertaining for the purposes of arelevant rule whether particular securities are transferred, securitiesacquired earlier by the trustees shall be treated as transferred by thembefore securities acquired by them later; and a relevant rule is one which isincluded in the trust deed and conforms with sub-paragraph (1) above.
The trust deed must not contain features which are not essential orreasonably incidental to the purpose of acquiring sums and securities, granting rights to acquire shares to persons who are eligible to participate in SAYE option schemes approved under Schedule 3 to the Income Tax (Earnings and Pensions) Act 2003, transferring shares to such persons, transferring sums and securities to employees and directors, and transferringsecurities to the trustees of profit sharing schemes approved under Schedule 9 to the Taxes Act 1988.
The trust deed must provide that, for the purposes of the deed, thetrustees— But if the deed provides as mentioned in paragraph 8 above, it mustprovide for the following exceptions to any rule which is included in it andconforms with sub-paragraph (1)(a) above, namely, that— The trust deed must provide that—
A trust which was at the time it was established a qualifying employeeshare ownership trust shall continue to be one, except that it shall not besuch a trust at any time when the requirements mentioned in paragraph 3(3)(a)to (f) above are not satisfied. This paragraph applies in relation to trusts established on or before the day on which the Finance Act 1994 was passed.
A trust is an employee share ownership trust at a particular time (therelevant time) if it was a qualifying employee share ownership trust at thetime it was established; and it is immaterial whether or not it is aqualifying employee share ownership trust at the relevant time.
Subject to sub-paragraphs (2) and (3) below, a trust which was at the time it was established a qualifying employee share ownership trust shall continue to be one. If the trust deed makes provision under paragraph 3A(a) above, the trust shall not be a qualifying employee share ownership trust at any time when the requirements mentioned in paragraph 3(3)(a) to (f) above are not satisfied. If the trust deed makes provision under paragraph 3A(b) above, the trust shall not be a qualifying employee share ownership trust at any time when the conditions mentioned in paragraph 3B(4)(a) to (e) above are not satisfied. If the trust deed makes provision under paragraph 3A(c) above, the trust shall not be a qualifying employee share ownership trust at any time when— This paragraph applies in relation to trusts established after the day on which the Finance Act 1994 was passed.
For the purposes of this Schedule the following are securities—
shares;
debentures.
For the purposes of this Schedule, the question whether one company is controlled by another shall be construed in accordance with section 995 of the Income Tax Act 2007.
For the purposes of this Schedule a person shall be treated as having a material interest in a company if he, either on his own or with one or more of his associates, or if any associate of his with or without other such associates,— In this paragraph— Where a person has an interest in shares or obligations of the company asa beneficiary of an employee benefit trust, the trustees shall not be regarded as associates of his by reason only of that interest unless sub-paragraph (5)below applies in relation to him. In sub-paragraph (3) above “employee benefit trust” has the same meaning as in paragraph 7 of Schedule 8 to the Taxes Act 1988, except that in its application for this purpose paragraph 7(5)(b) of that Schedule shall have effect as if it referred to the day on which this Act was passed instead of to 14th March 1989. This sub-paragraph applies in relation to a person if at any time on or after the day on which this Act was passed— has been the beneficial owner of, or able (directly or through the medium of other companies or by any other indirect means) to control, more than 5 percent. of the ordinary share capital of the company. Sub-paragraphs (9) to (12) of paragraph 7 of Schedule 8 to the Taxes Act1988 shall apply for the purposes of sub-paragraph (5) above as they apply for the purposes of that paragraph.
For the purposes of this Schedule a trust is established when the deed under which it is established is executed.
For the purposes of this Schedule “SAYE option scheme” has the same meaning as in the SAYE code (see section 516 of the Income Tax (Earnings and Pensions) Act 2003 (approved SAYE option schemes)).
Section 75.
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“administrator”, “approved scheme”, “employee” and “retirement benefits scheme” have the same meanings as in Chapter I of Part XIV of the Taxes Act 1988,
“freestanding”, in relation to provision for the payment of voluntary contributions, means provision which is contained in a retirement benefits scheme other than the one which provides the benefits which the voluntary contributions are intended to supplement,
“the main scheme”, in relation to provision for the payment of voluntary contributions which is freestanding, means the retirement benefits scheme which provides the benefits which the voluntary contributions are intended to supplement,
“principal provisions”, in relation to a retirement benefits scheme which makes provision for the payment of voluntary contributions which is not freestanding, means the provisions of the scheme concerning the provision of the benefits which the voluntary contributions are intended to supplement,
references to the provision of a benefit for an employee shall, in relation to a deceased employee, be construed as references to the provision of a benefit in respect of him, and
references to an employee being (or not being) a member of a scheme shall, in relation to a deceased employee, be construed as references to his having been (or not having been) a member of a scheme immediately before the time of his death.
Section 77.
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“personal pension scheme” has the same meaning as in Chapter IV of Part XIV of the Taxes Act 1988, and
references to approval of such a scheme do not include references to provisional approval under regulations made under section 655(5) of that Act.
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Section 84.
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“eligible contract” has the meaning given by section 55 above, and
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Section 90.
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Schedule 4 to the Taxes Act 1988 (deep discount securities) shall beamended as mentioned in the following provisions of this Schedule.
Paragraph 1 shall be amended as follows. The following paragraph shall be inserted after sub-paragraph(1)(d)—. In sub-paragraph (1)(g) after the words “the company” there shall beinserted the words “or the public body”. The following shall be inserted at the end of sub-paragraph (2)— “ This sub-paragraph applies only in the case of securities issued by acompany. ” The following sub-paragraphs shall be inserted after sub-paragraph(3)—
The following sub-paragraph shall be inserted after paragraph 4(7)—
In paragraph 11(1) after the words “deep discount security” thereshall be inserted the words “issued by a company”.
The following paragraph shall be inserted after paragraph 11—
The following sub-paragraph shall be inserted after paragraph 13(2)—
The following shall be inserted after paragraph 14—
For the purposes of this Schedule a deep gain security is a redeemable security (whenever issued) which fulfils the first and second conditions. The first condition is that, taking the security at the time it is issuedand assuming redemption, the amount payable on redemption might constitute adeep gain; and if the security is capable of redemption on one of a number ofoccasions, this condition is fulfilled if it is fulfilled as regards any oneof them. For the purposes of sub-paragraph (2) above “redemption” does not include any redemption which may be made before maturity only at the option of the person who issued the security(and no other person). In the case of a security issued before 13th November 1991, for the purposes of sub-paragraph (2) above “redemption” does not include any redemption which may be made before maturity otherwise than in pursuance of the exercise by the person who holds the security for the time being of an option exercisable only on the effluxion of time or the happening of an event which (judged at the time of the security’s issue) is certain or likely to occur. In the case of a security issued on or after 13th November 1991, for the purposes of sub-paragraph (2) above “redemption” does not include any redemption which may be made before maturity otherwise than at the option of the person who holds the security for the time being and as regards which the following conditions are fulfilled (judged at the time of the security’s issue)— The condition set out in sub-paragraph (3B)(a) above is fulfilled if it is fulfilled by reference to any one potential holder, whether or not it is fulfilled by reference to other potential holders. (3D) In a case where— the condition concerned shall not be treated as fulfilled unless it is fulfilled having regard only to circumstances in which (judged at the time of the security’s issue) the right to convert or exchange cannot be or is unlikely to be exercised. In the case of a security issued on or after 13th November 1991, for the purposes of sub-paragraph (2) above “redemption” does not include any redemption which may be made before maturity at the option of the person who holds the security for the time being and as regards which the following conditions are fulfilled (judged at the time of the security’s issue)— The condition set out in sub-paragraph (3E)(a) above is fulfilled if it is fulfilled by reference to any one potential holder, whether or not it is fulfilled by reference to other potential holders. (3G) In a case where— the condition concerned shall not be treated as fulfilled unless it is fulfilled having regard only to circumstances in which (judged at the time of the security’s issue) the right to convert or exchange cannot be or is unlikely to be exercised. The second condition is that the security— A security falls within this sub-paragraph if it is a gilt-edged securityand— A security falls within this sub-paragraph if it is a gilt-edged securityand— A security falls within this sub-paragraph if it is not a gilt-edgedsecurity and was issued (at whatever time) under the same prospectus as anyother security which was issued before the security in question and which isnot a deep gain security. For the purposes of this paragraph— For the purposes of this paragraph the amount payable on redemption of asecurity constitutes a deep gain if the issue price is less than the amountso payable, and the amount by which it is less represents more than— For the purposes of this paragraph the amount payable on redemption doesnot include any amount payable by way of interest.
For the purposes of paragraph 1 above a qualifying indexed security is asecurity which fulfils each of the conditions set out below. The first condition is that— The second condition is that the terms of issue make no provision forconversion into, or redemption in, a currency other than that in which thesecurity is denominated on issue. The third condition is that under the terms of issue— The fourth condition is that where that index is applied to determine theamount payable on redemption or to determine interest it must, under the termsof issue, be applied precisely and without restriction. The fifth condition is that— The sixth condition is that the terms of issue contain no provisionenabling the person who holds the security for the time being to require anyof the following before the expiry of a period which commences with the dayof issue and which is five years or more— The seventh condition is that, where the issue is handled by an agent forthe person making the issue or by an underwriter, the terms on which the agentor underwriter offers the security— If a security was issued before 9th June 1989, was not quoted in theofficial list of a recognised stock exchange at the time it was issued, butwas quoted in such a list on 8th June 1989, for the purposes of subparagraph(2)(c) above it shall be deemed to have been quoted in that list at the timeit was issued. If a security was issued on or after 9th June 1989, and was quoted in theofficial list of a recognised stock exchange at a time aftet it was issued butbefore the end of the qualifying period, for the purposes of sub-paragraph(2)(c) above it shall be deemed to have been quoted in that list at the timeit was issued; and the qualifying period is the period of one month beginningwith the day on which the security was issued For the purposes of sub-paragraph (5) above “redemption” does not include any redemption which may bemade before maturity only at the option of the person who issued the security(and no other person). In a case where the amount payable on redemption, or the amount ofinterest, is under the terms of issue determined by reference to the movementof the index for a period (a notional period) in place of a later actualperiod (a process commonly known as lagging) the fourth condition shall betreated as fulfilled if the following rules are fulfilled— In a case where the terms of issue contain provision for the amountpayable on redemption to be not less than an amount stated in the terms, theprovision shall not prevent the fourth condition being fulfilled if— In a case where the terms of issue contain provision for the amountpayable on redemption to be not less than a specified percentage of the issueprice, the provision shall not prevent the fourth condition being fulfilledif the specified percentage is not greater than 10. In a case where— the provision shall not prevent the fourth condition being fulfilled. In a case where— the provision shall not prevent the fourth condition being fulfilled. For the purposes of sub-paragraphs (7) , (12) and (12A) above the following are qualifying circumstances— In a case where an issue is handled by an agent for the person making theissue, or by an underwriter, for the purposes of sub-paragraphs (2) to (5) and(10) above the terms of issue shall be taken to include any terms on which theagent or underwriter offers the security. For the purposes of this paragraph the amount payable on redemption doesnot include any amount payable by way of interest. For the purposes of this paragraph “control” (in relation to acompany) shall be construed in accordance with section 840 of the Taxes Act1988.
For the purposes of paragraph 1 above a security is a convertible securityif— The condition is that— For the purposes of sub-paragraph (2) above the qualifying period is theperiod of one month beginning with the day on which the security was issued. For the purposes of sub-paragraph (2) above relevant share capital isshare capital in the company into whose share capital the security can beconverted or for whose share capital the security can be exchanged; andrelevant share capital need not be share capital into or for which thesecurity can be converted or exchanged. References in this paragraph to share capital are to share capital bywhatever name called.
This paragraph has effect for the purposes of this Schedule. “Transfer”, in relation to a security, means transfer by wayof sale, exchange, gift or otherwise. But (notwithstanding sub-paragraph (2) above) “transfer”does not include a transfer made ona conversion of a security into sharecapital in a company. Where an agreement for the transfer of a security is made, it istransferred, and the person to whom it is agreed to be transferred becomesentitled to it, when the agreement is made and not on a later transfer madepursuant to the agreement; and “entitled”, “transfer” and cognateexpressions shall be construed accordingly. A person holds a security at a particular time if he is entitled to it atthe time. A person acquires a security when he becomes entitled to it; and “acquisition” shall be construed accordingly. If an agreement is conditional (whether on the exercise of an option orotherwise) for the purposes of sub-paragraph (3) above it is made when thecondition is exercised.
This paragraph applies where— In such a case, the issue price of each new security shall be deemed for the purposes of paragraph 1(9) above to be its actual issue price less an amount equal to the extra return payable in respect of the security. For the purposes of this paragraph securities are of the same kind if they are treated as being of the same kind by the practice of a recognised stock exchange or would be so treated if dealt with on such a stock exchange. For the purposes of this paragraph the relevant period is the period beginning with the day following the relevant day and ending with the day on which the new securities are issued. For the purposes of this paragraph the relevant day is— and an interest payment day, in relation to the old securities, is a day on which interest is payable under them.
This paragraph applies if— In such a case— For the purposes of this paragraph— For the purposes of sub-paragraph (3)(a) above the person making thetransfer shall be treated as obtaining in respect of it— Sub-paragraph (4) above shall not apply where paragraph 7, 8 or 9 belowapplies.
Paragraph 5 above applies where there is a redemption of a deep gainsecurity as well as where there is a transfer. In its application by virtue of sub-paragraph (1) above, paragraph 5 aboveshall have effect as if—
Where an individual who is entitled to a security dies, for the purposesof this Schedule— Where a security is transferred by personal representatives to a legatee,for the purposes of paragraph 5 above they shall be treated as obtaining inrespect of the transfer an amount equal to the market value of the securityat the time of the transfer. In sub-paragraph (2) above “legatee” includes any person taking (whether beneficiallyor as trustee) under a testamentary disposition or on an intestacy or partialintestacy, including any person taking by virtue of an appropriation by thepersonal representatives in or towards satisfaction of a legacy or otherinterest or share in the deceased’s property.
This paragraph applies where— For the purposes of paragraph 5 above the amount treated as income— For the purposes of this paragraph— For the purposes of this paragraph the holding period is the period which—
This paragraph applies where a security is transferred from one person toanother (whether or not on or after 14th March 1989) and they are connectedwith each other. For the purposes of paragraph 5 above— Section 839 of the Taxes Act 1988 (connected persons) shall apply for thepurposes of this paragraph.
This paragraph applies where a security is transferred from one person toanother (whether or not on or after 14th March 1989) and— For the purposes of paragraph 5 above—
Where on a transfer or redemption of a security by trustees an amount istreated as income chargeable to tax by virtue of paragraph 5 above, the rateat which it is chargeable shall be the rate applicable to trusts for the year of assessment in which the transfer ismade. Where the trustees are trustees of a scheme to which section 469 of theTaxes Act 1988 applies, sub-paragraph (1) above shall not apply if or to theextent that the amount is treated as income in the accounts of the scheme.
Where, for the purposes of paragraph 5 above and apart from thisparagraph, the amount obtained on transfer would be an amount expressed in acurrency other than sterling, it shall be treated for those purposes as thesterling equivalent on the day of the transfer of the amount so expressed. Where, for the purposes of paragraph 5 above and apart from thisparagraph, the amount paid on acquisition would be an amount expressed in acurrency other than sterling, it shall be treated for those purposes as thesterling equivalent on the day of the acquisition of the amount so expressed. Where, for the purposes of paragraph 5 above and apart from thisparagraph, the amount of the costs incurred by a person in connection with atransfer would be an amount expressed in a currency other than sterling, itshall be treated for those purposes as the sterling equivalent on the day ofthe transfer of the amount so expressed. Where, for the purposes of paragraph 5 above and apart from thisparagraph, the amount of the costs incurred by a person in connection with anacquisition would be an amount expressed in a currency other than sterling,it shall be treated for those purposes as the sterling equivalent on the dayof the acquisition of the amount so expressed. In sub-paragraphs (1) and (3) above “transfer” includes “redemption”. For the purposes of this paragraph the sterling equivalent of an amounton a particular day is the sterling equivalent calculated by reference to theLondon closing rate of exchange for that day.
Sub-paragraph (2) below applies where— In such a case— For the purposes of sub-paragraph (2) above—
In a case where— that paragraph shall not apply to the transfer or redemption.
paragraph 5 above would apply (apart from this paragraph) to a transferor redemption of a security, and
immediately before the transfer or redemption was made the security washeld for the purposes of an exempt approved scheme (within the meaning ofChapter I of Part XIV of the Taxes Act 1988),
In a case where— that paragraph shall not apply to the transfer or redemption. In this paragraph “charity” has the same meaning as in section 506 of the TaxesAct 1988.
In a case where— that paragraph shall not apply to the transfer.
a security is the subject of a transfer which falls within section 129(3)of the Taxes Act 1988, and
paragraph 5 above would apply to the transfer (apart from this paragraph),
In a case where— the transfer shall not be a transfer for those purposes.
a security is the subject of a transfer to which paragraph 5 aboveapplies, and
apart from this paragraph, the transfer would be a transfer for thepurposes of sections 710 to 728 of the Taxes Act 1988,
In a case where paragraph 5 above applies to the redemption of a security,sections 123 and 348 to 350 of the Taxes Act 1988 shall not apply to anyproceeds of the redemption.
Section 108 of the Taxation of Chargeable Gains Act 1992 shall apply to theidentification, for the purposes of this Schedule, of deep gain securitiestransferred or redeemed as it applies to the identification, for the purposesof capital gains tax, of deep discount securities disposed of.
In a case where— sub-paragraph (2) below shall apply in relation to any gilt-edgedsecurity which has been or is issued under the prospectus at any time (whetherbefore, at or after the time mentioned in paragraph (d) above). As regards any event occurring in relation to the security after the timementioned in sub-paragraph (1)(d) above, paragraphs 5 to 19 above shall haveeffect as if— For the purposes of sub-paragraph (1) above a would-be deep gain securityis a security which would be a deep gain security apart from paragraph 1(6)above. In sub-paragraph (1) above “gilt-edged security” has the same meaning as in paragraph1 above. For the purposes of sub-paragraph (2) above events, in relation to asecurity, include anything constituting a transfer or acquisition for thepurposes of this Schedule.
In a case where— sub-paragraph (2) below shall apply in relation to any security which isnot a gilt-edged security but which has been or is issued under the prospectusat any time (whether before, at or after the time mentioned in paragraph (c)above). As regards any event occurring in relation to the security after the timementioned in sub-paragraph (1)(c) above, paragraphs 5 to 19 above shall haveeffect as if— For the purposes of sub-paragraph (1) above , and subject to paragraph 21A below, a new would-be deep gain security is a security which— In sub-paragraph (1) above “gilt-edged security” has the same meaning as in paragraph1 above. For the purposes of sub-paragraph (2) above events, in relation to asecurity, include anything constituting a transfer or acquisition for thepurposes of this Schedule.
A security which (apart from this paragraph) would be a new would-be deep gain security for the purposes of paragraph 21(1) above is not such a security if the following three conditions are fulfilled. The first condition is that all the securities issued on the occasion of the original issue were issued before 13th November 1991. The second condition is that the security is issued on or after 13th November 1991. The third condition is that, even if paragraph 1(7) above did not prevent the security being a deep gain security, it would nevertheless not be a deep gain security if for the purposes of paragraph 1(2) above “redemption” did not include any redemption which may be made before maturity otherwise than in pursuance of the exercise by the person who holds the security for the time being of an option exercisable only on the effluxion of time or the happening of an event which (judged at the time of the security’s issue) is certain or likely to occur.
Sub-paragraph (2) below applies where— As regards any event occurring in relation to the security after theagreement is made, paragraphs 5 to 19 above shall have effect as if— For the purposes of sub-paragraph (2) above events, in relation to asecurity, include anything constituting a transfer or acquisition for thepurposes of this Schedule. In this paragraph “qualifying indexed security” has the meaning given byparagraph 2 above.
Sub-paragraph (2) below applies where— As regards the redemption, paragraphs 5 to 19 above shall have effect as if— Sub-paragraph (4) below applies where— As regards the transfer, paragraphs 5 to 19 above shall have effect as if— Section 839 of the Taxes Act 1988 (connected persons) shall apply for the purposes of this paragraph.
The Treasury may make regulations amending paragraph 2 above so as to doone or more of the following— Regulations under sub-paragraph (1) above—
Sub-paragraph (2) below applies where— As regards any event occurring in relation to the security after the timementioned in sub-paragraph (1)(c) above, paragraphs 5 to 19 above shall haveeffect as if— For the purposes of sub-paragraph (2) above events, in relation to asecurity, include anything constituting a transfer or acquisition for thepurposes of this Schedule.
In a case where— then (subject to sub-paragraph(3) below) the security shall be treated,at the time of its issue and at all subsequent times, as not being a deep gainsecurity. Sub-paragraph (3) below applies where— As regards any event occurring in relation to the security after the timementioned in sub-paragraph (2)(b) above, paragraphs 5 to 19 above shall haveeffect as if— For the purposes of sub-paragraph (3)above events, in relation to asecurity, include anything constituting a transfer or acquisition for thepurposes of this Schedule.
This paragraph applies to a security whose terms contain no particular date by which it is to be redeemed. In the case of such a security the following expressions, wherever they appear in this Schedule, shall be construed as if the words “before maturity” were omitted—
Section 107.
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sections 13A, 231 and 419 to 422 of the Taxes Act 1988, and
Chapter III of Part XI of that Act (as it has effect in relation to accounting periods beginning before 1st April 1989).
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In section 13 of the Taxes Act 1988 (small companies’ rate) in subsection(9) for the words “paragraph 17 of Schedule 19” there shall besubstituted the words “paragraphs 2 to 4 of Schedule 12 to the Finance Act1989”.
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in a company if he, either on his own or with one or more associates, or if any associate of his with or without such other associates,— is the beneficial owner of, or able, directly or through the medium of other companies, or by any other indirect means to control, more than 5 per cent. of the ordinary share capital of the company, or in the case of a close company, possesses, or is entitled to acquire, such rights as would, in the event of the winding-up of the company or in any other circumstances, give an entitlement to receive more than 5 per cent. of the assets which would then be available for distribution among the participators.
In section 187(3) of the Taxes Act 1988 (cases in which a person has amaterial interest in a company for the purposes of sections 185 to 187 of, andSchedules 9 and 10 to, that Act) for the words from “in a company” to theend of paragraph (b) there shall be substituted—in a company if he, either on his own or with one or more associates,or if any associate of his with or without such other associates,— and at the end there shall be added the words “ and “participator” has the meaning given by section 417(1) ”. This paragraph shall have effect in relation to accounting periods beginning after 31st March 1989.
In section 214 of the Taxes Act 1988 (chargeable payments connected with exempt distributions) in subsection (1)(c) for the words from “338(2)(a)”to “Schedule 19” there shall be substituted the words “and338(2)(a)”. This paragraph shall have effect in relation to accounting periods beginning after 31st March 1989, except in any case where section 427(4) ofthe Taxes Act 1988 has effect by virtue of section 103(2) of this Act.
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In section 576 of the Taxes Act 1988 (which relates to relief for losses on certain unquoted shares) in subsection (5), for paragraph (a) of the definition of “trading company” there shall be substituted—. This paragraph shall have effect in relation to disposals made after 31stMarch 1989.
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Paragraph 7 of Schedule 8 to the Taxes Act 1988 (cases in which a person has a material interest in a company for the purposes of a profit-related pay scheme) shall be amended in accordance with this paragraph. In sub-paragraph (2) for the words from “in a company” onwards there shall be substituted—in a company if he, either on his own or with one or more associates, or if any associate of his with or without such other associates,— . “participator” has the meaning given by section 417(1) This paragraph shall have effect in relation to accounting periods beginning after 31st March 1989.
Section 121.
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In section 7 of the 1968 Act (definition of “industrial building or structure”), after subsection (3A) there shall be inserted— This paragraph shall have effect in relation to any chargeable period or its basis period ending on or after the day on which this Act is passed.
Section 84 of the 1968 Act (under which certain contributions etc. reduce allowable expenditure) shall be amended as follows. At the end of paragraph (b) of subsection (2) there shall be added the words “and not being expenditure which is allowed to be deducted in computing the profits or gains of a trade, profession or vocation carried on by that person”. After subsection (2) there shall be inserted— This paragraph shall have effect in relation to expenditure incurred on or after the day on which this Act is passed except in so far as a contribution to the expenditure was made before that day.
In section 85 of the 1968 Act (which gives allowances in respect of certain contributions), after subsection (3) there shall be inserted— This paragraph shall have effect in relation to contributions made on or after the day on which this Act is passed.
This paragraph applies where allowances are made in respect of a contribution to capital expenditure by virtue of section 85 of the 1968 Act as applied by paragraph 15(6) of Schedule 8 to the Finance Act 1971. Where this paragraph applies in relation to a contribution made for the purposes of a trade carried on or to be carried on by the contributor, it shall be assumed for the purposes of section 44 of the Finance Act 1971— and any allowance or charge which would on those assumptions fall to be made for any chargeable period in the case of the separate trade shall be made for that period in the case of the trade for the purposes of which the contribution was actually made. References in sub-paragraph (2) above to a trade shall be construed as including references to a profession or vocation. This paragraph shall have effect in relation to contributions made on or after the day on which this Act is passed.
In its application in relation to allowances under Schedule 15 to the Finance Act 1986 (agricultural land and buildings), Schedule 9 to the 1968 Act shall have effect— This paragraph shall have effect in relation to contributions made on or after the day on which this Act is passed.
In section 91 of the 1968 Act (allowances for expenditure on scientific research), after subsection (1B) there shall be inserted— This paragraph shall have effect in relation to expenditure incurred on or after the day on which this Act is passed.
The amendments made in section 92 of the 1968 Act (assets ceasing to be used for scientific research) by section 63 of the Finance Act 1985 shall have effect in relation to any case where the relevant event (within the meaning given in section 92(1)) occurs on or after 1st April 1989 (as well as in the cases provided for by section 63(7) where it occurs before that date).
In section 94 of the 1968 Act (interpretation of Part II), after subsection (4) there shall be added— This paragraph shall have effect in any case where the sale is effected, or the contract for sale entered into, on or after the day on which this Act is passed.
In section 45(1) of the Finance Act 1971 (machinery or plant held by a person under a hire-purchase or similar agreement to be treated as belonging to him), in paragraph (a), after the words “to him” there shall be inserted the words “(and not to any other person)”. This paragraph shall have effect in relation to capital expenditure incurred under contracts entered into on or after the day on which this Act is passed.
In section 46 of the Finance Act 1971 (machinery and plant on lease) after subsection (2) there shall be inserted—
In section 48 of the Finance Act 1971, after subsection (4) (which provides for the manner of making capital allowances and imposes restrictions in certain cases where the machinery or plant is on lease), there shall be inserted— This paragraph shall have effect in any case where the accounting period of the surrendering company (within the meaning of Chapter IV of Part X of the Taxes Act 1988) ends on or after the day on which this Act is passed.
Paragraph 7 of Schedule 8 to the Finance Act 1971 (effect of use after user not attracting capital allowances, or after receipt by way of gift) shall be amended as follows. In sub-paragraph (1) the words “Subject to sub-paragraph (2) below” and the words from “by reason of” to the end of paragraph (b) shall cease to have effect. Where a person is treated as having incurred capital expenditure on the provision of machinery or plant by virtue of sub-paragraph (1)(b) above, he shall for the purposes of paragraph 3 above be treated as having done so by way of purchase from the donor. This paragraph shall have effect in cases where machinery or plant is brought into use on or after the day on which this Act is passed.
In paragraph 8A of Schedule 8 to the Finance Act 1971 (which enables shipowners to elect to defer allowances in certain cases), in sub-paragraph (1)(b), for the words from “the expenditure” to “falling” there shall be substituted the words “the ship is not provided for leasing or letting on charter otherwise than by way of lease, or is so provided but it appears that the ship will be used in the requisite period (within the meaning of section 64 of the Finance Act 1980) for a qualifying purpose (within the meaning of that section) and will not at any time in that period be used for any other purpose, and the expenditure does not fall”. This paragraph shall have effect in relation to expenditure incurred on or after the day on which this Act is passed.
In section 58 of the Finance Act 1985 (extension of first-year allowances to ships which are not new), after subsection (2) there shall be added— Paragraph (a) of section 58(3) of the Finance Act 1985 shall have effect in relation to disclaimers and claims made on or after the day on which this Act is passed, paragraph (b) of that subsection shall have effect in any case where the requisite period begins on or after that day and paragraph (c) of that subsection shall come into force on that day.
Section 48(1) of the Capital Allowances Act 1968 and section 65(5) of the Finance Act 1980 shall not apply in any case where an election is made under this paragraph. This paragraph shall have effect in relation to successions occurring on or after the day on which this Act is passed.
In section 68(4) of the Finance Act 1972 (which modifies the restrictions on allowances imposed by paragraph 3 of Schedule 8 to the Finance Act 1971 in the case of sales etc. between connected persons) for paragraphs (b) and (c) there shall be substituted—
In section 73(5) of the Finance Act 1980 (application of sections 64 to 72 to activities other than trades), for the words “first-year” there shall be substituted the words “writing-down”.
In Schedule 11 to the Finance Act 1982, in paragraph 4(3), for the reference to section 243(2) of the Taxes Act 1988 there shall be substituted a reference to section 343(2).
In paragraph 4(5)(c) of Schedule 12 to the Finance Act 1982 (application of section 78 of and Schedule 7 to the 1968 Act to certain sales of dwelling-houses), for the words “are at the time of the sale” there shall be substituted the words “at the time of the sale are or at any earlier time were”. This paragraph shall have effect in any case where the time of the sale referred to in paragraph 4(5)(c) is after 14th January 1989.
In section 57(6) of the Finance Act 1985 (election for certain machinery or plant to be treated as short-life assets)— The amendment made by sub-paragraph (1)(b)(i) above is to section 57(6) of the Finance Act 1985 as it has effect as amended by section 57(6) of the Finance Act 1986 and as it has effect by virtue of section 57(7) of that Act and the amendment made by sub-paragraph (1)(b)(ii) above is to section 57(6) of the Finance Act 1985 as it has effect by virtue of section 57(7) of the Finance Act 1986. This paragraph shall have effect in relation to any chargeable period or its basis period ending on or after the day on which this Act is passed.
In Schedule 15 to the Finance Act 1985 (machinery and plant excluded from treatment as short-life assets), for paragraph 8 (leased assets) there shall be substituted— In paragraph 9 of that Schedule (leased assets) for the words from “1980” to the end there shall be substituted the word “applies”. This paragraph shall have effect in relation to expenditure incurred on or after the day on which this Act is passed.
there shall be disregarded for material purposes so much (if any) of that expenditure as exceeds that disposal value This paragraph shall have effect in relation to expenditure incurred on or after the day on which this Act is passed.
In Schedule 13 to the Finance Act 1986 (new code for minerals), in paragraph 16(5) (unrelieved value for the purposes of qualifying expenditure), for the reference to section 55 of that Act there shall be substituted a reference to Schedule 15. This paragraph shall have effect in cases where buildings or structures cease, on or after the day on which this Act is passed, permanently to be used for any purpose.
At the end of section 56(3) of the Finance Act 1986 (interpretation of new provisions relating to agriculture), there shall be added the words “and section 4(11) of and Chapter VI of Part I of the Capital Allowances Act 1968 shall apply in relation to Schedule 15 as they apply in relation to section 68 of that Act”.
In paragraph 7(3) of Schedule 15 to the Finance Act 1986 (amount of writing-down allowances after a balancing event) the words “subject to paragraph 9 below” shall be omitted.
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In section 56 of the Finance Act 1985 (time when capital expenditure is incurred) at the end of subsection (1) there shall be added and This paragraph shall have effect in relation to expenditure incurred on or after 6th April 1989.
In section 56(8) of the Finance Act 1985 (preservation of certain provisions under which expenditure is taken to have been incurred later than section 56 provides), for the words “or the Finance Act 1971” there shall be substituted the words “the Finance Act 1971, Schedule 12 to the Finance Act 1982 or Schedules 13 and 15 to the Finance Act 1986”. This paragraph shall have effect in relation to any chargeable period or its basis period ending on or after the day on which this Act is passed.
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Section 181.
Section 32 of the Broadcasting Act 1981 (rentalpayments by programme contractors) shall be amended as follows. In subsection (1)(b), after the word “amounts” there shall beinserted the words “in respect of profits and in respect of advertisingrevenue”. In subsection (2)(b), after the word “amounts” there shall beinserted the words “in respect of profits”. Rate for determining amount of additional payments For so much of the advertising revenue for the accounting period as does not exceed the free slice for advertising revenue. Nil For so much of the advertising revenue for the accounting period as exceedsthe free slice for advertising revenue. The relevant revenue rate except where the rate is nil For the purposes of this Table— For the purposes of this Table— Subsection (4A) shall be omitted. In subsection (5), for the words “relevant sum mentioned in subsection(4A)” there shall be substituted the words “relevant sum mentioned in theTables above”. In subsection (7), after the words “additional payments” there shallbe inserted the words “in respect of profits”. In subsection (8), for the words “any of the provisions of subsections(4), (4A)” there shall be substituted the words “any of the provisionsof subsections (4)”. For subsection (9) there shall be substituted the followingsubsections—
Section 33 of the Broadcasting Act 1981 (supplementalprovisions) shall be amended as follows. In subsection (1), for the words “advertising receipts” there shallbe substituted the words “advertising revenue”. In subsection (2), for the words “advertising receipts” there shallbe substituted the words “advertising revenue” and for the words “thosereceipts derive” there shall be substituted the words “the revenuederives”. In subsection (3)(c), for the words “advertising receipts” thereshall be substituted the words “advertising revenue” and for the word “derive” there shall be substituted the word “derives”.
Section 34 of the Broadcasting Act 1981 (instalments payable on accountby programme contractors for their accounting periods) shall be amended asfollows. In subsection (3)(c), for the words “receipts are” there shall besubstituted the words “revenue is”.
Section 35 of the Broadcasting Act 1981 (provision forsupplementing additional payments) shall be amended as follows. In subsection (1)—
In this paragraph— Any contract between the Authority and a programme contractor which is inforce immediately before the day on which section 181 of this Act comes intoforce shall, until it is varied or superseded by a further contract betweenthem or expires or is otherwise terminated (whichever first occurs), be deemedto be modified by virtue of this Schedule so as— and (subject to paragraph 5 of Schedule 4 to the 1981 Act) any provisionsof the contract which provide for arbitration as to any matters contained inthe contract in accordance with the existing statutory provisions shall beconstrued as making the like provision for arbitration in relation to mattersdeemed to be included in the contract by virtue of this sub-paragraph. Where it appears to the Authority that the new statutory provisions callfor the inclusion of additional terms in any such contract, but do not affordsufficient particulars of what those terms should be, the Authority may, afterconsulting the programme contractor, decide what those terms are to be. This paragraph shall not be taken to have effect in relation to anycontract entered into by a programme contractor and any person other than theAuthority before the day on which section 181 of this Act comes into force.
Where any accounting period of a programme contractor begins before 1stJanuary 1990 and ends after 31st December 1989, the additional paymentspayable by the programme contractor in relation to that accounting periodunder section 32 of the Broadcasting Act 1981 shall be theaggregate of—
the amounts payable by him on the assumption that section 181 of this Actwas not in force at any time during the accounting period, multipliedby— and
the amounts payable by him on the assumption that that section was inforce throughout the accounting period, multiplied by— where (taking any odd four days or more as a week)— X is the number of weeks in the accounting period falling before 1stJanuary 1990, and Y is the number of weeks in the accounting period falling after 31stDecember 1989.
Where, under the existing statutory provisions, any excess of firstcategory expenditure over first category income of a programme contractorwould have been carried forward and treated as relevant first categoryexpenditure of his for an accounting period ending after 31st December 1989if those provisions had applied in relation to that period then the excessshall be carried forward and treated, under the new statutory provisions, asrelevant expenditure of the contractor for any accounting period which endsafter that date.
In this Part of this Schedule, references to programme contractors shallbe read as including references to teletext contractors.
Section 187.
1979 c. 2. The Customs and Excise Management Act 1979. Section 17(5)(a).Section 147(1). 1979 c. 4. The Alcoholic Liquor Duties Act 1979. Section 73. 1988 c. 39. The Finance Act 1988. Section 11(2). The repeals of section 147(1) of the Customs and Excise Management Act1979 and section 11(2) of the Finance Act 1988 have effect in relation tooffences committed on or after the day on which this Act is passed.
1983 c. 55. The Value Added Tax Act 1983. In Schedule 5, Group 6 and, in Group 8A, Note (5). 1984 c. 43. The Finance Act 1984. In Schedule 6, Part II. S.I. 1986/704. The Value Added Tax (Land) Order 1986. The whole Order. S.I. 1986/716. The Value Added Tax (Land) (No.2) Order 1986. The whole Order. S.I. 1987 /1072. The Value Added Tax (Construction of Buildings) (No.2) Order 1987. Article 2.
The repeal of Group 6 of Schedule 5 to the Value Added Tax Act 1983 haseffect in relation to supplies made on or after 1st April 1989.
The remaining repeals have effect in accordance with Schedule 3 to thisAct.
1970 c. 9. The Taxes Management Act 1970. In section 15(11), paragraph (b) and the word “and” preceding it. 1988 c. 1. The Income and Corporation Taxes Act 1988. In section 131(2), the words “for the same or another chargeableperiod”.In section 149(1), the words “for that period” and the words “for that or any other period”. Section 170.Section 175(3).In section 176(1), the words “(but not morethan six months)”.In section 178(2), paragraph (b) and the word “or”preceding it.Section 203(4).In section 231, in subsection (4) the words “andwhere” onwards, and subsection (5).Section 433.Section 434(4) and(5).Section 435.Section 436(3)(b).Section 507(2).In section 590(3)(d), thewords “(disregarding any excess of that remuneration over the permittedmaximum)”.Section 595(2) and (3).In section 596(3)(a), the word “either” and the words “or subsection (2)”.In section 600(1), thewords “or have been” and the words “or has at any time been”.Section635(4).In section 645, in subsection (3), the word “and” followingparagraph (a) and subsection (5).In section 655(5), the words “in caseswhere the applications are made before 1st February 1990”.Section 769(7)(b)and (c).In section 824(10), the definition of “United Kingdom estate”.InSchedule 8, in paragraph 7(1), the words “, or is an associate of a personwho has,”; in paragraph 13, in sub-paragraph (1) the word “fixed” andsub-paragraphs (2) and (3); and, in paragraph 14, sub-paragraph (2), insub-paragraph (5) the words “specified in, or” and sub-paragraph (7).InSchedule 9, in paragraph 10, paragraph (ii) of sub-paragraph (c) and the word “and” preceding it.In Schedule 23, paragraph 8. 1988 c. 39. The Finance Act 1988. In section 68(1), the words from “at the fixed price” to “tendered”.
The repeals in sections 131 and 149 and of section 170 of the Income andCorporation Taxes Act 1988 have effect in accordance with section 42 of thisAct.
The repeals in sections 231 and 824 of the Income and Corporation TaxesAct 1988 have effect in accordance with sections 110 and 111 of this Act.
The repeals in sections 433 to 435 of the Income and Corporation Taxes Act1988 have effect in accordance with section 84(5) of this Act and the repealof section 436(3)(b) of that Act has effect in accordance with section 87(5)of this Act.
The repeals in sections 590, 595, 596 and 600 of, and in Schedule 23 to,the Income and Corporation Taxes Act 1988 have effect in accordance withSchedule 6 to this Act.
The repeals in sections 635, 645 and 655 of the Income and CorporationTaxes Act 1988 have effect in accordance with Schedule 7 to this Act.
The repeal of section 769(7)(b) and (c) of the Income and CorporationTaxes Act 1988 has effect in accordance with section 100 of this Act.
The repeal in the Finance Act 1988 has effect in relation to offers madeon or after 11th October 1988.
1970 c. 9. The Taxes Management Act 1970. Section 29(2).In section 31(3)(b), the words “426,”.In the Table insection 98, in the first column, the reference to paragraph 17 of Schedule 19to the principal Act.In Schedule 3, in rule 8, the words from “orrelating” to “Schedule 19 to the principal Act”. 1972 c. 41. The Finance Act 1972. In Schedule 24, paragraph 6. 1979 c. 14. The Capital Gains Tax Act 1979. In section 89(1), paragraph (b) and the word “or” preceding it. 1988 c. 1. The Income and Corporation Taxes Act 1988. In section 127(3), paragraph (b) and the word “or” preceding it.Insection 230, the word “either”, the words from “or to” to “Schedule 19” and the words “in either case”.In section 239(7), thewords “subsections (5) to (7) of section 430 and”.In section 249(3), thewords “and paragraph 12(1) to (3) of Schedule 19”.In section 250(7), thewords “and paragraph 12 of Schedule 19”.Section 414(3).In section 416(1),the words from “except” to “Schedule 19”.Sections 423 to 430.Insection 539(1), the words “including tax under section 426”.In section681, in subsection (1), paragraph (b) and the word “and” preceding it andsubsections (2) and (3).Section 686(3) and (4).Section 687(3)(b) and (c).Insection 701(8), the words “426(3)”.Section 742(9)(d) and (10).In section825(1)(a), the words from “and any” to “430(7)(a)”.In Schedule 4,paragraph 10(3).In Schedule 8, in paragraph 7(3), the second “and”.Schedule 19.In Schedule 29, in the Table in paragraph 32, theentries relating to section 29(2) of the Taxes Management Act 1970 andsections 89(1)(b) and 136(10)(b) of the Capital Gains Tax Act 1979. 1988 c. 39. The Finance Act 1988. Section 102(2)(a).
The repeal in section 98 of the Taxes Management Act 1970 and the repealof paragraph 17 of Schedule 19 to the Income and Corporation Taxes Act 1988have effect on and after the day on which this Act is passed.
The repeal in section 89 of the Capital Gains Tax Act 1979 (and thecorresponding repeal in Schedule 29 to the Income and Corporation Taxes Act1988) have effect where the due date of issue of the share capital issued toa close company falls in an accounting period of the company beginning after31st March 1989.
The repeal of section 414(3) of the Income and Corporation Taxes Act 1988has effect from 1st April 1989.
The repeal of sections 423 to 430 of, and Schedule 19 to, the Income andCorporation Taxes Act 1988 has effect in accordance with section 103 of thisAct.
The repeals in section 681 of the Income and Corporation Taxes Act 1988have effect in relation to the income of bodies corporate for accountingperiods beginning after 31st March 1989.
The remaining repeals have effect in relation to accounting periodsbeginning after 31st March 1989.
1968 c. 3. The Capital Allowances Act 1968. Section 9(b).Section 14.Section 50.Section 67(11).In section 68, insubsections (1) and (3), the words “or forestry”, in each place wherethey occur, and in subsection (2), the words “and forestryincome”.Section 80.In section 87(4), the words “or forestry”, in bothplaces where they occur.In section 92(5), the words “allowed or” and thewords “balancing allowance or”.Section 93(1) and (2).Schedule 8. 1971 c. 68. The Finance Act 1971. In Schedule 8, paragraph 2 and, in paragraph 7, in sub-paragraph (1) thewords “Subject to sub-paragraph (2) below” and the words from “byreason of” to the end of paragraph (b) and sub-paragraph (2). 1978 c. 42. The Finance Act 1978. In Schedule 6, paragraph 8. 1980 c. 48. The Finance Act 1980. In section 74(6), the words from the beginning to “and”.In section75(6), the words from the beginning to “and”. 1982 c. 39. The Finance Act 1982. In Schedule 12, paragraph 11. 1986 c. 41. The Finance Act 1986. Section 56(5).In Schedule 15, in paragraphs 1 to 3, the words “orforestry”, in each place where they occur, in paragraph 7(3), the words “subject to paragraph 9 below”, and in paragraph 11, the words “andforestry income” and the words “or forestry income”. 1988 c. 1. The Income and Corporation Taxes Act 1988. In section 521(5), the words “within the terms of section 839”.
The repeal in paragraph 7(1)(b) of Schedule 8 to the Finance Act 1971 haseffect in cases where machinery or plant is brought into use on or after theday on which this Act is passed.
The repeals in sections 68 and 87(4) of the Capital Allowances Act 1968and in paragraphs 1 to 3 and 11 of Schedule 15 to the Finance Act 1986 haveeffect in relation to chargeable periods beginning on or after 6th April 1993.
The repeal in section 521(5) of the Income and Corporation Taxes Act 1988has effect in accordance with paragraph 27 of Schedule 13 to this Act.
The repeals of the provisions listed in sub-paragraph (5) of paragraph 28of Schedule 13 to this Act have effect in accordance with that paragraph.
1973 c. 51. The Finance Act 1973. In section 38(3B)(a), the words “within the period of two years endingat the date of the disposal”. 1979 c. 14. The Capital Gains Tax Act 1979. Section 126(7)(b).Section 142A(5)(c).In Schedule 4, in paragraph 1(2), thewords “at the rate of 50 per cent.,”, in paragraph 3(1), the words from “by virtue” to “(settled property)”, in paragraph 3(2), the words “at the rate of 50 per cent.,” and in paragraph 4(4), the words “(taking account” onwards. 1980 c. 48. The Finance Act 1980. Section 79. 1981 c. 35. The Finance Act 1981. Section 78.Section 96(3)(e) and (4). 1982 c. 39. The Finance Act 1982. Sections 81 and 82. 1984 c. 43. The Finance Act 1984. Section 64(2)(a). 1984 c. 51. The Inheritance Tax Act 1984. In section 97(2), the words from “and in this section” to the end. 1985 c. 54. The Finance Act 1985. In section 70(10), paragraph (a) and the word “and” following it. 1986 c. 41. The Finance Act 1986. In section 58(2), paragraph (b) and the word “and” precedingit.Section 101(2). 1987 c. 51. The Finance (No.2) Act 1987. Section 78. 1988 c. 1. The Income and Corporation Taxes Act 1988. In Schedule 29, in the Table in paragraph 32, the entry relating to section126(7) of the Capital Gains Tax Act 1979.
The repeal in the Finance Act 1973 has effect in accordance with section130 of this Act.
The repeal in section 142A of the Capital Gains Tax Act 1979 has effectin accordance with section 92 of this Act.
The repeal of section 81 of the Finance Act 1982 has effect in relationto disposals on or after 6th April 1989 or, in the case of section 81(1)(b),assets acquired on or after that date.
The repeal of section 64(2)(a) of the Finance Act 1984 has effect inaccordance with section 139(1) of this Act.
The repeal in section 97(2) of the Inheritance Tax Act 1984 has effect inaccordance with section 138(7) of this Act.
The repeal in the Finance (No.2) Act 1987 has effect in accordance withsection 140 of this Act.
The remaining repeals have effect in relation to disposals on or after14th March 1989 (except that they shall not have effect in relation to sucha disposal in a case where the enactment in question operates in consequenceof relief having been given under section 79 of the Finance Act 1980 inrespect of a disposal made before that date).
1970 c. 9. The Taxes Management Act 1970. Section 16(6).In section 20, subsections (4) and (5) and, in subsection(6), the words “and in relation” onwards.In section 20B(7), the wordsfrom “to a person” to “daughter”.Sections 37 to 39.In section 40(2),the words “Subject to section 41 below,”.Section 41.In section 53(1), thewords “and the reference” onwards.In section 61(5), the words “withinthe said five days” and the words from “The costs” to “thecollector, and”.Section 62(3), so far as unrepealed.Section 64(3), so faras unrepealed.Section 70(5).Section 86(6).Section 87(4) and (5).In section 98,in the Table, in column 1, in the entry relating to Part III of the TaxesManagement Act 1970, the words “, except sections 16 and 24(2)” and theentry relating to section 481(5)(k) of the Income and Corporation Taxes Act1988.In section 118(1), the definition of “neglect”. 1973 c. 51. The Finance Act 1973. In Schedule 16A, paragraph 10. 1975 c. 45. The Finance (No.2) Act 1975. In section 47(1), the words “of not less than £25”. 1976 c. 24. The Development Land Tax Act 1976. In Schedule 8, paragraphs 17 and 18, so far as unrepealed. 1980 c. 48. The Finance Act 1980. Section 62. 1982 c. 39. The Finance Act 1982. Section 69. 1987 c. 51. The Finance (No.2) Act 1987. In section 84, subsections (1) to (3) and (5) to (8). 1988 c. 1. The Income and Corporation Taxes Act 1988. In section 824, in subsections (1)(a) and (b), the words “of not lessthan £25” and, in subsection (5), the words “of not less than£25” and paragraph (b) and the word “and” preceding it.Insection 825(2), the words “of not less than £100”.In Schedule 19A,paragraph 10. 1988 c. 39. The Finance Act 1988. In section 126, subsection (1) and, in subsection (4)(b), the words “and(9)”. In Schedule 3, paragraph 29. 1989 c. 26. The Finance Act 1989. Section 165(2).
The repeals in sections 16, 53 and 98 of the Taxes Management Act 1970have effect in accordance with section 164 of this Act.
The repeals in sections 20 and 20B of the Taxes Management Act 1970 andsection 126 of the Finance Act 1988 have effect with respect to notices given,or warrants issued, on or after the day on which this Act is passed.
The repeals of sections 37 to 39, in section 40, of section 41 and insection 118 of the Taxes Management Act 1970 and in Schedule 3 to the FinanceAct 1988 have effect in accordance with section 149 of this Act.
The repeals in section 61 of the Taxes Management Act 1970 come into forceon the day appointed under section 152(7) of this Act.
The repeals in sections 86 and 87 of the Taxes Management Act 1970, theFinance (No.2) Act 1975, the Finance Act 1980 and sections 824 and 825 of theIncome and Corporation Taxes Act 1988 have effect in accordance with section158 of this Act.
The repeal in the Finance Act 1982 has effect in accordance with section156(4) of this Act.
The repeal of subsection (2) of section 165 of this Act has effect inrelation to failures beginning on or after the day appointed under thatsubsection.
54 & 55 Vict. c. 39. The Stamp Act 1891. Section 91.Section 98(1).Section 100.Section 118.In Schedule 1, paragraph(3) of the heading beginning “Bond, Covenant, or Instrument of any kindwhatsoever”, the whole of the heading beginning “Insurance”, and thewhole of the heading beginning “Policy of Life Insurance”. 4 & 5 Eliz. 2 c. 54. The Finance Act 1956. Section 38. 4 & 5 Eliz. 2 c. 11 (N.I.). The Finance Act (Northern Ireland) 1956. Section 6. 7 & 8 Eliz. 2 c. 58. The Finance Act 1959. In section 30(4), the words preceding paragraph (a) and the words followingparagraph (c). 7 & 8 Eliz. 2 c. 9 (N.I.). The Finance Act (Northern Ireland) 1959. In section 5(4), the words preceding paragraph (a) and the words followingparagraph (c). 1966 c. 18. The Finance Act 1966. Section 47. 1966 c. 21 (N.I.). The Finance Act (Northern Ireland) 1966. Section 5. 1970 c. 24. The Finance Act 1970. In Schedule 7, paragraphs 7(4) and 17. 1970 c. 21 (N.I.). The Finance Act (Northern Ireland) 1970. In Schedule 2, paragraphs 7(4) and 17. 1982 c. 39. The Finance Act 1982. Section 130. 1988 c. 1. The Income and Corporation Taxes Act 1988. In Schedule 14, in paragraph 3(4) the words from “and section 100” tothe end. These repeals have effect in accordance with section 173 of this Act.
1970 c. 9. The Taxes Management Act 1970. Section 89. 1970 c. 24. The Finance Act 1970. Section 30. 1970 c. 21 (N.I.). The Finance Act (Northern Ireland) 1970. Section 1(1) and (2). 1973 c. 51. The Finance Act 1973. In Schedule 16A, in paragraph 3(4), para-graph (a) and the word “and”following it and the words “they apply”. 1975 c. 22. The Oil Taxation Act 1975. In Schedule 2, in the Table in paragraph 1, the entry relating to section89 of the Taxes Management Act 1970. 1975 c. 45. The Finance (No.2) Act 1975. Section 47(2). 1980 c. 1. The Petroleum Revenue Tax Act 1980. Section 2(3). 1984 c. 51. The Inheritance Tax Act 1984. Section 233(2) and (4). 1986 c. 41. The Finance Act 1986. Section 92(4) and (5).In Schedule 19, paragraph 32. 1987 c. 51. The Finance (No.2) Act 1987. Section 89. 1988 c. 1. The Income and Corporation Taxes Act 1988. In section 824, subsection (1A), in subsection (2) the words “and(1A)” and in subsection (6) the words “Without prejudice to subsection(1A) above”.In section 825, subsection (2A) and in subsection (5) the words “Without prejudice to subsection (2A) above”.In Schedule 19A, inparagraph 3(4), para-graph (a) and the word “and” following it and thewords “they apply”. 1988 c. 39. The Finance Act 1988. In Schedule 13, paragraphs 7(b) and (f) and 8. These repeals have effect in accordance with section 178(7) of this Act.
1981 c. 68. The Broadcasting Act 1981. Section 32(4A).In section 35(1)(b)(ii), the words “in the case of secondcategory profits,”. 1982 c. 39. The Finance Act 1982. In section 144, subsections (1), (2), (4) and (5). 1984 c. 46. The Cable and Broadcasting Act 1984. Section 40(2).In Schedule 5, in paragraph 40, sub-paragraphs (7), (8) and(9). 1986 c. 41. The Finance Act 1986. In Schedule 22, paragraph 1, and paragraphs 4 to 8. These repeals have effect on 1st January 1990.
11 and 12 Geo. 5 c. 32. The Finance Act 1921. Sections 50 and 51.Schedule 3. 5 and 6 Geo. 6 c. 21. The Finance Act 1942. In Schedule 11, in Part II, the amendments of the Finance Act 1921. 9 and 10 Geo. 6 c. 64. The Finance Act 1946. Section 66. 1969 c. 48. The Post Office Act 1969. Section 108(1)(c). 1982 c. 41. The Stock Transfer Act 1982. Section 4. So far as relating to stock registered in the National Savings StockRegister these repeals have effect on the coming into force of the firstregulations made by virtue of section 3(1)(bb) of the National Debt Act 1972and so far as relating to other stock and bonds they have effect on the cominginto force of the first regulations made by virtue of section 47(1)(bb) of theFinance Act 1942.
1971 c. 29. The National Savings Bank Act 1971. Section 5(2), (5), (6) and (7).In section 26(2), paragraph (b) and the word “or” preceding it. 1982 c. 39. The Finance Act 1982. In Schedule 20, paragraph 4(2). These repeals, apart from the repeal of section 5(2), (5) and (6) of theNational Savings Bank Act 1971, come into force on 1st October 1989.
26 Geo. 5 & 1 Edw. 8 c. 43. The Tithe Act 1936. Section 2(1).In section 4(2), in paragraph (a) the words “the amount”onwards.Section 7.Part II.Section 31(7).In section 47(1), the definition of “interest date”.In section 47(4), the words “of any stock, or”.InSchedule 7, paragraph 3(a) of Part I, Part II, and paragraph 2 of Part III. 5 & 6 Geo. 6 c. 21. The Finance Act 1942. In Schedule 11, in Part I the entry relating to Redemption Stock and inPart II the amendment of the Tithe Act 1936. 14 & 15 Geo. 6 c. 62. The Tithe Act 1951. In section 8(2), the words from “which” to “Act”, and the words “and appended” onwards. 6 & 7 Eliz. 2 c. 55. The Local Government Act 1958. In Schedule 8, paragraph 15. 1968 c. 13. The National Loans Act 1968. In section 16(7), the words “Part II of the Tithe Act 1936”.Section16(9)(a).In section 22(3), the words “Part II of the Tithe Act 1936”.InSchedule 1, the entries relating to section 26 of the Tithe Act 1936. 1972 c. 65. The National Debt Act 1972. In section 15(1), the words “section 24 of the Tithe Act 1936”. 1979 c. 14. The Capital Gains Tax Act 1979. In Schedule 2, in Part II, the entry relating to securities issued underPart II of the Tithe Act 1936. These repeals have effect from the day appointed under section 187(2)of this Act.
“tax refund relating to an accounting period” means, in relation to a company—
a payment of the whole or part of the tax credit comprised in any franked investment income received by the company in the period.
Subject to subsection (6) below, where this subsection has effect in relation to any refund or part of a refund— and where the refund is a repayment of corporation tax, any interest relating to it which has been paid by the surrendering company shall be treated as having been paid by the recipient company.
the recipient company shall be treated for all purposes of the Tax Acts as having paid on the relevant date an amount of corporation tax for the relevant accounting period equal to the amount of the refund or part, and
there shall be treated for all those purposes as having been made to the surrendering company on the relevant date a repayment of corporation tax or income tax or a payment of tax credit (as the case may be) equal to the amount of the refund or part;
In subsection (4) above “relevant date”, in relation to a refund, means—
in so far as it consists of a repayment of corporation tax paid by the surrendering company after the date on which it became due and payable under section 10 of the Taxes Act 1988, the day on which it was paid by that company, and
otherwise, the date on which corporation tax for the relevant accounting period became due and payable.
For the purpose of ascertaining the amount of any penalty to which the recipient company is liable under section 94(6) of the Taxes Management Act 1970, the corporation tax which the company is treated as having paid by subsection (4)(a) above shall be treated as paid on the day on which the notice under subsection (2) above is given (and not on the relevant date).
A payment for a transferred tax refund— and in this subsection “a payment for a transferred tax refund” means a payment made by the receiving company to the surrendering company in pursuance of an agreement between them as respects the giving of a notice under this section, being a payment not exceeding the amount of the refund in question.
shall not be taken into account in computing profits or losses of either company for corporation tax purposes, and
shall not for any of the purposes of the Corporation Tax Acts be regarded as a distribution or a charge on income;
For the purposes of this section two companies are members of the same group if and only if they would be for the purposes of Chapter IV of Part X of the Taxes Act 1988.
This section shall not apply unless the relevant accounting period ends after such day, not being earlier than 31st March 1992, as the Treasury may by order made by statutory instrument appoint.
Except as provided by subsection (2) below, Chapter III of Part XI of theTaxes Act 1988 (apportionment of undistributed income etc. of close companies)shall not have effect in relation to accounting periods beginning after 31stMarch 1989.
Section 427(4) of the Taxes Act 1988 (which gives relief to an individualwhere income apportioned to him in an earlier accounting period of a closecompany is included in a distribution received by him in a later accountingperiod), and section 427(5) of, and Part I of Schedule 19 to, that Act so faras they relate to section 427(4), shall continue to have effect in any casewhere the subsequent distribution referred to in section 427(4) is made before1st April 1992.
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In section 414 of the Taxes Act 1988 for subsection (2) (further case in which a company is a close company for the purposes of the Tax Acts) there shall be substituted—
Subsection (3) of that section shall cease to have effect.
In subsection (5)(b) of that section for the words from “paragraph (c)” to “that paragraph” there shall be substituted the words “paragraph (a) of subsection (2) above or paragraph (c) of section 416(2) and it would not be a close company if the references in those paragraphs”.
This section shall be deemed to have come into force on 1st April 1989.
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In section 13 of the Taxes Act 1988 (small companies' relief) in subsection (1) for the words “a company resident in the United Kingdom” there shall be substituted the words a company which—.
After that section there shall be inserted the following section—
This section shall have effect in relation to accounting periods beginning after 31st March 1989.
In section 231 of the Taxes Act 1988 (tax credits for certain recipientsof qualifying distributions) in subsection (3) after the words “made and”there shall be inserted the words “subject to subsections (3A) to (3D)below” and after that subsection there shall be inserted—
This section shall have effect in relation to distributions made bycompanies in accounting periods beginning after 31st March 1989.
Schedule 12 to this Act (in which Part I contains administrativeprovisions relating to close companies and Part II makes amendments connectedwith section 103 above) shall have effect.
Section 685 of the Taxes Act 1988 (provisions supplementary to sections charging settlor to tax in excess of basic rate on certain settlement income) shall be amended as follows.
In subsection (3), after the word “above” there shall be inserted the words “and subsection (4B) below”.
At the end of subsection (4) there shall be added the words “, but subject to subsections (4A) and (4C) below”.
After subsection (4) there shall be inserted—
This section shall have effect for the year 1990-91 and subsequent years of assessment.
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Where the trustees of a settlement include at least one who is not resident in the United Kingdom as well as at least one who is, then for all the purposes of the Income Tax Acts—
if the condition in subsection (2) below is satisfied, the trustee or trustees not resident in the United Kingdom shall be treated as resident there, and
otherwise, the trustee or trustees resident in the United Kingdom shall be treated as not resident there (but as resident outside the United Kingdom).
The condition referred to in subsection (1) above is that the settlor or, where there is more than one, any of them is at any relevant time—
resident in the United Kingdom,
ordinarily resident there, or
domiciled there.
For the purposes of subsection (2) above the following are relevant times in relation to a settlor—
in the case of a settlement arising under a testamentary disposition of the settlor or on his intestacy, the time of his death, and
in the case of any other settlement, the time or, where there is more than one, each of the times when he has provided funds directly or indirectly for the purposes of the settlement.
For the purposes of this section “settlor”, in relation to a settlement, includes any person who has provided or undertaken to provide funds directly or indirectly for the purposes of the settlement.
In section 824(9) of the Taxes Act 1988 (repayment supplements), for the words “or a United Kingdom trust (as defined in section 231),” there shall be substituted the words “the trustees of a settlement”.
Subject to subsections (7) to (9) below, this section shall apply for the year 1989-90 and subsequent years of assessment.
For the purpose of determining the residence of trustees at any time during the year 1989-90, the condition in subsection (2) above shall be regarded as not having been satisfied if none of the trustees of the settlement is resident in the United Kingdom at any time during the period beginning with 1st October 1989 and ending with 5th April 1990.
This section shall not apply for any of the purposes of section 739 of the Taxes Act 1988 in relation to income payable before 15th June 1989, or for the purposes of subsection (3) of that section in relation to income payable on or after that date if—
the capital sum there referred to is received, or the right to receive it is acquired, before that date, and
that sum is wholly repaid, or the right to it waived, before 1st October 1989.
This section shall not apply for any of the purposes of section 740 of the Taxes Act 1988 in relation to benefits received before 15th June 1989; and, in relation to benefits received on or after that date, “relevant income” for those purposes shall include income arising to trustees before 6th April 1989 notwithstanding that one or more of them was not resident outside the United Kingdom, unless they have been charged to tax in respect of it.
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if the condition in subsection (2) below is satisfied, the personal representative or representatives not resident in the United Kingdom shall be treated as resident there, and
otherwise, the personal representative or representatives resident in the United Kingdom shall be treated as not resident there (but as resident outside the United Kingdom).
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resident in the United Kingdom,
ordinarily resident there, or
domiciled there.
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in relation to England and Wales, the deceased person’s personal representatives as defined by section 55 of the Administration of Estates Act 1925;
in relation to Scotland, his executor or the judicial factor on his estate;
in relation to Northern Ireland, his personal representatives as defined by section 45(1) of the Administration of Estates Act (Northern Ireland) 1955; and
in relation to another country or territory, the persons having in relation to him under its law any functions corresponding to the functions for administration purposes of personal representatives under the law of England and Wales.
In section 824(9) of the Taxes Act 1988 (repayment supplements), for the words from “or, in” to “section 701)” there shall be substituted the words “or personal representatives (within the meaning of section 111 of the Finance Act 1989)”.
... this section shall apply for the year 1989-90 and subsequent years of assessment.
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the capital sum there referred to is received, or the right to receive it is acquired, before that date, and
that sum is wholly repaid, or the right to it waived, before 1st October 1989.
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This section applies in computing, for the purposes of Case I or Case II of Schedule D, the profits or gains of a trade, profession or vocation carried on by an individual or by a partnership of individuals.
In a case where this section applies, nothing in section 74(a) or (b) of the Taxes Act 1988 (deductions limited by reference to purposes of trade etc.) shall prevent the deduction of a sum in respect of expenditure incurred in connection with the provision for or use by the individual, or any of the individuals, of a security asset or security service.
Subsection (2) above shall not apply unless the asset or service is provided or used to meet a threat which—
is a special threat to the individual’s personal physical security, and
arises wholly or mainly by virtue of the particular trade, profession or vocation concerned.
Subsection (2) above shall not apply unless the person incurring the expenditure has as his sole object in doing so the meeting of that threat.
Subsection (2) above shall not apply in the case of a service unless the benefit resulting to the individual consists wholly or mainly of an improvement of his personal physical security.
Subsection (2) above shall not apply in the case of an asset unless the person incurring the expenditure intends the asset to be used solely to improve personal physical security.
But in a case where— subsection (2) shall nevertheless apply, but only as regards the appropriate proportion of the expenditure there mentioned.
apart from subsection (6) above, subsection (2) above would apply in the case of an asset, and
the person incurring the expenditure intends the asset to be used partly to improve personal physical security,
For the purposes of subsection (7) above the appropriate proportion of the expenditure mentioned in subsection (2) above is such proportion of that expenditure as is attributable to the intention of the person incurring it that the asset be used to improve personal physical security.
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For the purposes of section 112 above—
a security asset is an asset which improves personal security,
a security service is a service which improves personal security,
references to an asset do not include references to a car, a ship or an aircraft,
references to an asset or service do not include references to a dwelling or grounds appurtenant to a dwelling, and
references to an asset include references to equipment and a structure (such as a wall).
If the person incurring the expenditure intends the asset to be used solely to improve personal physical security, but there is another use for the asset which is incidental to improving personal physical security, that other use shall be ignored in construing section 112(6) above.
The fact that an asset or service improves the personal physical security of any member of the family or household of the individual concerned, as well as that of the individual, shall not prevent section 112(2) above from applying.
For the purposes of section 112 above in its application to an asset, it is immaterial whether or not the asset becomes affixed to land (whether constituting a dwelling or otherwise).
For the purposes of section 112 above in its application to an asset, it is immaterial whether or not the individual concerned is or becomes entitled to the property in the asset or (in the case of a fixture) an estate or interest in the land concerned.
Section 112 above applies where expenditure is incurred on or after 6th April 1989.
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In section 401(1) of the Taxes Act 1988 (which gives relief for expenditure incurred by a person within three years before he begins to carry on a trade, profession or vocation), for the word “three” there shall be substituted the word “five”.
This section shall have effect where the time when the person begins to carry on the trade, profession or vocation falls after the end of March 1989.
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Where any arrangements having effect by virtue of section 788 of the Taxes Act 1988 provide — the arrangements shall be construed as providing for that deduction to be calculated by reference to the gross amount or value of the distribution and tax credit, without any allowance for the deduction itself.
for persons who are resident outside the United Kingdom and who receive distributions from companies resident in the United Kingdom to be entitled to tax credits, and
for the amount paid to such a person by way of tax credit to be determined by reference to the amount to which an individual resident in the United Kingdom would have been entitled, subject to a deduction calculated by reference to the aggregate of the amount or value of the distribution and the amount of the tax credit paid,
This section shall have effect in relation to payments made before the passing of this Act as well as those made after that time, except that it shall not affect—
the judgment of any court given before 25th October 1988, or
the law to be applied in proceedings on appeal to the Court of Appeal or the House of Lords where the judgment of the High Court or the Court of Session which is in issue was given before that date.
A payment to which this section applies shall be treated for the purposes of— as if it were a payment of interest within section 124 of that Act (quoted Eurobonds).
section 338 of the Taxes Act 1988 (payment of interest within section 124 of that Act to be a charge on income), and
section 349 of that Act (such a payment to be made gross),
This section applies to a payment of interest if—
it is made on or after 1st April 1989 by a relevant United Kingdom company to a relevant Netherlands Antilles subsidiary, and
not later than 90 days after the payment is received by the subsidiary, it is applied by the subsidiary in paying interest on quoted Eurobonds issued by it before 26th July 1984 or in meeting expenses incurred in connection with the issue of quoted Eurobonds so issued.
In subsection (2) above—
“relevant Netherlands Antilles subsidiary” means a company which—
at the time when the quoted Eurobonds were issued was resident in the Netherlands Antilles (including Aruba) and was a 90 per cent. subsidiary of a company resident in the United Kingdom, and
at the time when the payment is made is resident in the Netherlands Antilles (but not Aruba) and is a 90 per cent. subsidiary of the relevant United Kingdom company; and
“relevant United Kingdom company” means a company which is resident in the United Kingdom and which is not a 51 per cent. subsidiary of a company not resident in the United Kingdom.
For the purpose of determining whether a company is a relevant Netherlands Antilles subsidiary, its residence (whether before 1st April 1989 or at any later time) shall be ascertained in accordance with the terms of the arrangements made with the Government of the Kingdom of the Netherlands on behalf of the Government of the Netherlands Antilles which had effect by virtue of section 788 of the Taxes Act 1988 immediately before 1st April 1989.
In this section “quoted Eurobond” has the same meaning as in section 124 of the Taxes Act 1988.
This section applies where—
an individual, or a partnership of individuals, carries on a trade, profession or vocation,
expenditure is incurred by the individual or partnership in connection with the provision for or use by the individual, or any of the individuals, of a security asset,
no sum in respect of the expenditure could be deducted in computing the profits or gains of the trade, profession or vocation for the purposes of Case I or Case II of Schedule D, and
apart from this section, paragraph (a) or paragraph (b) (or both) of section 44(1) of the Finance Act 1971 (capital allowances) would not apply.
In a case where this section applies, Chapter I of Part III of the Finance Act 1971 shall apply as if—
the expenditure were capital expenditure incurred on the provision of machinery or plant wholly and exclusively for the purposes of the trade, profession or vocation concerned,
in consequence of the expenditure being incurred, the machinery or plant belonged to the individual or partnership carrying on the trade, profession or vocation, and
the disposal value of the machinery or plant were nil.
Subsection (2) above shall not apply unless the asset is provided or used to meet a threat which—
is a special threat to the individual’s personal physical security, and
arises wholly or mainly by virtue of the particular trade, profession or vocation concerned.
Subsection (2) above shall not apply unless the person incurring the expenditure has as his sole object in doing so the meeting of that threat.
Subsection (2) above shall not apply unless the person incurring the expenditure intends the asset to be used solely to improve personal physical security.
But in a case where— subsection (2) shall nevertheless apply, but only so as to treat the appropriate proportion of the expenditure there mentioned as capital expenditure incurred as there mentioned.
apart from subsection (5) above, subsection (2) above would apply, and
the person incurring the expenditure intends the asset to be used partly to improve personal physical security,
For the purposes of subsection (6) above the appropriate proportion of the expenditure mentioned in subsection (2) above is such proportion of that expenditure as is attributable to the intention of the person incurring it that the asset be used to improve personal physical security.
For the purposes of section 117 above—
a security asset is an asset which improves personal security,
references to an asset do not include references to a car, a ship or an aircraft,
references to an asset do not include references to a dwelling or grounds appurtenant to a dwelling, and
references to an asset include references to equipment and a structure (such as a wall).
If the person incurring the expenditure intends the asset to be used solely to improve personal physical security, but there is another use for the asset which is incidental to improving personal physical security, that other use shall be ignored in construing section 117(5) above.
The fact that an asset improves the personal physical security of any member of the family or household of the individual concerned, as well as that of the individual, shall not prevent section 117(2) above from applying.
For the purposes of section 117 above, it is immaterial whether or not the asset becomes affixed to land (whether constituting a dwelling or otherwise).
Section 117 above applies where expenditure is incurred on or after 6th April 1989.
If a person carrying on a trade incurs expenditure, in respect of a regulated stand at a sports ground used by him for the purposes of his trade, in taking— then, if an allowance or deduction in respect of the expenditure could not, apart from this section, be made in taxing the trade or computing the profits or gains arising from it, Chapter I of Part III of the Finance Act 1971 shall apply as if the expenditure were capital expenditure incurred on the provision of machinery or plant for the purposes of the trade, and as if the machinery or plant had, in consequence of his incurring the expenditure, belonged to him, and as if the disposal value of the machinery or plant were nil.
steps necessary for compliance with the terms and conditions of a safety certificate issued for the stand, or
steps specified in a letter or other document sent or given to him by or on behalf of the local authority for the area in which the ground is situated as steps the taking of which either would be taken into account by them in deciding what terms and conditions to include in a safety certificate to be issued for the stand or would lead to the amendment or replacement of a safety certificate issued or to be issued for it,
In this section “local authority”, “regulated stand”, “safety certificate” and “sports ground” have the same meanings as in Part III of the Fire Safety and Safety of Places of Sport Act 1987.
This section shall be construed as if contained in Chapter I of Part III of the Finance Act 1971.
This section shall be deemed to have come into force on 1st January 1989.
This section applies to any allowance under— which would not fall to be made if that section or Schedule had been enacted without any reference to forestry land or the purposes of forestry; and any reference in this section to an allowance is a reference to an allowance to which this section applies.
section 68 of the Capital Allowances Act 1968 (agricultural buildings allowances in respect of expenditure incurred before 1st April 1986); or
Schedule 15 to the Finance Act 1986 (agricultural buildings allowances in respect of expenditure incurred on or after that date),
Subject to subsection (4) below, no allowance shall be made for a chargeable period beginning on or after 20th June 1989.
Subject to subsection (4) below, any allowance which falls to be made— shall be apportioned (on a time basis according to their respective lengths) between the part of that year or period beginning on that date and the other part; and so much of any such allowance as is apportioned to the part beginning on that date shall not be made.
for the year of assessment 1989-90; or
for an accounting period of a company beginning before and ending on or after 20th June 1989,
Subsections (2) and (3) above shall not have effect in relation to an allowance which falls to be made for a chargeable period which begins before 6th April 1993 and is a period in relation to which an election under paragraph 4 of Schedule 6 to the Finance Act 1988 (commercial woodlands: Schedule D election for transitional period) has effect in respect of the relevant land.
Any such allowance as is mentioned in subsection (4) above which, for an accounting period of a company ending on or after 6th April 1993, falls to be made otherwise than under paragraph 11(1) of Schedule 15 to the Finance Act 1986 shall be apportioned (on a time basis according to their respective lengths) between the part of that period beginning on that date and the other part; and so much of any such allowance as is apportioned to the part beginning on that date shall not be made.
In subsection (4) above “the relevant land”, in relation to an allowance falling to be made in respect of any expenditure, means the land for the purposes of forestry on which that expenditure was incurred.
Schedule 13 to this Act (which makes miscellaneous amendments of the enactments relating to capital allowances) shall have effect.
That Schedule shall be construed as one with Part I of the Capital Allowances Act 1968.
In the following enactments, namely— for “£3,000”, in each place where it occurs, there shall besubstituted “£6,000”.
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section 25(7) of that Act (information about assets disposed of),
This section applies to disposals on or after 6th April 1989 andaccordingly, in relation to subsection (1)(b) above, to assets acquired on orafter that date.
Section 79 of the Finance Act 1980 (which gives general relief for gifts and other disposals not at arm’s length) shall cease to have effect.
Schedule 14 to this Act (which extends relief for gifts of business assets, provides relief for gifts on which inheritance tax is chargeable, gifts for political parties, gifts of property of historic interest etc. or works of art and gifts to certain maintenance funds etc., and makes provision for payment of tax by instalments in the case of gifts where relief is not available) shall have effect.
This section shall have effect in relation to disposals on or after 14th March 1989 (except that it shall not affect the operation of any enactment in relation to such a disposal in a case where the enactment operates in consequence of relief having been given under section 79 of the Finance Act 1980 in respect of a disposal made before that date).
The following section shall be inserted in the Capital Gains Tax Act 1979 after section 146—
This section shall apply to disposals made on or after 14th March 1989.
For the year 1988-89, section 12 of the Capital Gains Tax Act 1979 (non-resident with United Kingdom branch or agency) shall have effect with the insertion of the following subsection after subsection (2)—
For the year 1989-90 and subsequent years of assessment section 12 of the Capital Gains Tax Act 1979 shall have effect with the insertion of the following subsection after subsection (2)—
Where immediately before 14th March 1989 a person is not resident and not ordinarily resident in the United Kingdom but is carrying on a profession or vocation in the United Kingdom through a branch or agency, he shall be deemed for all purposes of capital gains tax— at its market value at the time of the deemed disposal.
to have disposed immediately before 14th March 1989 of every asset to which subsection (4) below applies, and
immediately to have reacquired every such asset,
This subsection applies to any asset which was held by the person immediately before 14th March 1989 and which at the beginning of 14th March 1989 is a chargeable asset in relation to him by virtue of his carrying on the profession or vocation.
For the purposes of subsection (4) above an asset is at the beginning of 14th March 1989 a chargeable asset in relation to the person if, were it to be disposed of at that time, any chargeable gains accruing to him on the disposal would be gains in respect of which he would be chargeable to capital gains tax under section 12(1) of the Capital Gains Tax Act 1979.
In the case of a person carrying on a profession or vocation in the United Kingdom through a branch or agency, the charge to capital gains tax under section 12(1) of the Capital Gains Tax Act 1979 shall not apply in respect of chargeable gains accruing on the disposal of assets only used in or for the purposes of the profession or vocation before 14th March 1989 or only used or held for the purposes of the branch or agency before that date.
Where an asset ceases by virtue of becoming situated outside the United Kingdom to be a chargeable asset in relation to a person, he shall be deemed for all purposes of the Capital Gains Tax Act 1979— at its market value at that time.
to have disposed of the asset immediately before the time when it became situated outside the United Kingdom, and
immediately to have reacquired it,
Subsection (1) above does not apply—
where the asset becomes situated outside the United Kingdom contemporaneously with the person there mentioned ceasing to carry on a trade in the United Kingdom through a branch or agency, or
where the asset is an exploration or exploitation asset.
Where an asset ceases to be a chargeable asset in relation to a person by virtue of his ceasing to carry on a trade in the United Kingdom through a branch or agency, he shall be deemed for all purposes of the Capital Gains Tax Act 1979— at its market value at that time.
to have disposed of the asset immediately before the time when he ceased to carry on the trade in the United Kingdom through a branch or agency, and
immediately to have reacquired it,
Subsection (3) above does not apply to an asset which is a chargeable asset in relation to the person there mentioned at any time after he ceases to carry on the trade in the United Kingdom through a branch or agency and before the end of the chargeable period in which he does so.
In this section—
“exploration or exploitation asset” means an asset used in connection with exploration or exploitation activities carried on in the United Kingdom or a designated area, and
“designated area” and “exploration or exploitation activities” have the same meanings as in section 38 of the Finance Act 1973.
For the purposes of this section an asset is at any time a chargeable asset in relation to a person if, were it to be disposed of at that time, any chargeable gains accruing to him on the disposal—
would be gains in respect of which he would be chargeable to capital gains tax under section 12(1) of the Capital Gains Tax Act 1979 (non-resident with United Kingdom branch or agency), or
would form part of his chargeable profits for corporation tax purposes by virtue of section 11(2)(b) of the Taxes Act 1988 (non-resident companies).
Subsection (1) above shall apply where an asset ceases to be situated in the United Kingdom on or after 14th March 1989.
Subsection (3) above shall apply where a person ceases to carry on a trade in the United Kingdom through a branch or agency on or after 14th March 1989.
This section shall apply as if references to a trade included references to a profession or vocation.
For the year 1988-89, section 12 of the Capital Gains Tax Act 1979 (non-resident with United Kingdom branch or agency) shall have effect with the insertion of the following subsection after subsection (1)—
For the year 1989-90 and subsequent years of assessment, section 12 of the Capital Gains Tax Act 1979 shall have effect with the insertion of the following subsection after subsection (1)—
Section 115 of the Capital Gains Tax Act 1979 (roll-over relief) shall not apply in the case of a person if the old assets are chargeable assets in relation to him at the time they are disposed of, unless the new assets are chargeable assets in relation to him immediately after the time they are acquired.
Subsection (1) above shall not apply where—
the person acquires the new assets after he has disposed of the old assets, and
immediately after the time they are acquired the person is resident or ordinarily resident in the United Kingdom.
Subsection (2) above shall not apply where immediately after the time the new assets are acquired—
the person is a dual resident, and
the new assets are prescribed assets.
This section shall apply where the disposal of the old assets or the acquisition of the new assets (or both) takes place on or after 14th March 1989.
But where the acquisition of the new assets takes place before 14th March 1989 and the disposal of the old assets takes place on or after that date, this section shall not apply if the disposal of the old assets takes place within twelve months of the acquisition of the new assets or such longer period as the Board may by notice in writing allow.
For the purposes of this section an asset is at any time a chargeable asset in relation to a person if, were it to be disposed of at that time, any chargeable gains accruing to him on the disposal—
would be gains in respect of which he would be chargeable to capital gains tax under section 12(1) of the Capital Gains Tax Act 1979 (non-resident with United Kingdom branch or agency), or
would form part of his chargeable profits for corporation tax purposes by virtue of section 11(2)(b) of the Taxes Act 1988 (non-resident companies).
In this section—
“double taxation relief arrangements” means arrangements having effect by virtue of section 788 of the Taxes Act 1988 (as extended to capital gains tax by section 10 of the Capital Gains Tax Act 1979);
In this section—
“the old assets” and “the new assets” have the same meanings as in section 115 of the Capital Gains Tax Act 1979,
references to disposal of the old assets include references to disposal of an interest in them, and
references to acquisition of the new assets include references to acquisition of an interest in them or to entering into an unconditional contract for the acquisition of them.
In section 38 of the Finance Act 1973 (territorial extension) in subsection (3B) (definition of exploration or exploitation asset for purposes of that section)—
in paragraph (a) the words “within the period of two years ending at the date of the disposal” shall be omitted, and
in paragraph (b) for the words “, at some time within the period of two years ending at the date of the disposal, has” there shall be substituted the words “has at some time”.
This section shall apply where assets are disposed of on or after 14th March 1989.
Where an exploration or exploitation asset which is a mobile asset ceases to be chargeable in relation to a person by virtue of ceasing to be dedicated to an oil field in which he, or a person connected with him within the meaning of section 839 of the Taxes Act 1988, is or has been a participator, he shall be deemed for all purposes of the Capital Gains Tax Act 1979— at its market value at that time.
to have disposed of the asset immediately before the time when it ceased to be so dedicated, and
immediately to have reacquired it,
Where a person who is not resident and not ordinarily resident in the United Kingdom ceases to carry on a trade in the United Kingdom through a branch or agency, he shall be deemed for all purposes of the Capital Gains Tax Act 1979— at its market value at that time.
to have disposed immediately before the time when he ceased to carry on the trade in the United Kingdom through a branch or agency of every asset to which subsection (3) below applies, and
immediately to have reacquired every such asset,
This subsection applies to any exploration or exploitation asset, other than a mobile asset, used in or for the purposes of the trade at or before the time of the deemed disposal.
A person shall not be deemed by subsection (2) above to have disposed of an asset if, immediately after the time when he ceases to carry on the trade in the United Kingdom through a branch or agency, the asset is used in or for the purposes of exploration or exploitation activities carried on by him in the United Kingdom or a designated area.
Where in a case to which subsection (4) above applies the person ceases to use the asset in or for the purposes of exploration or exploitation activities carried on by him in the United Kingdom or a designated area, he shall be deemed for all purposes of the Capital Gains Tax Act 1979— at its market value at that time.
to have disposed of the asset immediately before the time when he ceased to use it in or for the purposes of such activities, and
immediately to have reacquired it,
For the purposes of this section an asset is at any time a chargeable asset in relation to a person if, were it to be disposed of at that time, any chargeable gains accruing to him on the disposal—
would be gains in respect of which he would be chargeable to capital gains tax under section 12(1) of the Capital Gains Tax Act 1979 (non-resident with United Kingdom branch or agency), or
would form part of his chargeable profits for corporation tax purposes by virtue of section 11(2)(b) of the Taxes Act 1988 (non-resident companies).
In this section—
“exploration or exploitation asset” means an asset used in connection with exploration or exploitation activities carried on in the United Kingdom or a designated area;
“designated area” and “exploration or exploitation activities” have the same meanings as in section 38 of the Finance Act 1973; and
the expressions “dedicated to an oil field” and “participator” shall be construed as if this section were included in Part I of the Oil Taxation Act 1975.
Subsection (1) above shall apply where an asset ceases to be dedicated as mentioned in that subsection on or after 14th March 1989.
Subsection (2) above shall apply where a person ceases to carry on a trade in the United Kingdom through a branch or agency on or after 14th March 1989.
Subsection (5) above shall apply where a person ceases to use an asset in or for the purposes of exploration or exploitation activities on or after 14th March 1989.
For the purposes of this section, a company is a dual resident company if it is resident in the United Kingdom and falls to be regarded for the purposes of any double taxation relief arrangements as resident in a territory outside the United Kingdom.
Where an asset of a dual resident company becomes a prescribed asset, the company shall be deemed for all purposes of the Capital Gains Tax Act 1979— at its market value at that time.
to have disposed of the asset immediately before the time at which it became a prescribed asset, and
immediately to have reacquired it,
Subsection (2) above does not apply where the asset becomes a prescribed asset on the company becoming a company which falls to be regarded as mentioned in subsection (1) above.
This section applies where an asset becomes a prescribed asset on or after 14th March 1989.
In this section—
“double taxation relief arrangements” means arrangements having effect by virtue of section 788 of the Taxes Act 1988 (as extended to capital gains tax by section 10 of the Capital Gains Tax Act 1979);
“prescribed asset”, in relation to a dual resident company, means an asset in respect of which, by virtue of the asset being of a description specified in any double taxation relief arrangements, the company falls to be regarded for the purposes of the arrangements as not liable in the United Kingdom to tax on gains accruing to it on a disposal.
Where a company is a dual resident company at the time it disposes of the old assets and at the time it acquires the new assets, and the old assets are not prescribed assets at the time of disposal, section 115 of the Capital Gains Tax Act 1979 (roll-over relief) shall not apply unless the new assets are not prescribed assets immediately after the time of acquisition.
This section shall apply where the disposal of the old assets or the acquisition of the new assets (or both) takes place on or after 14th March 1989.
But where the acquisition of the new assets takes place before 14th March 1989 and the disposal of the old assets takes place on or after that date, this section shall not apply if the disposal takes place within twelve months of the acquisition or such longer period as the Board may by notice in writing allow.
In this section—
In this section—
“the old assets” and “the new assets” have the same meanings as in section 115 of the Capital Gains Tax Act 1979,
references to disposal of the old assets include references to disposal of an interest in them, and
references to acquisition of the new assets include references to acquisition of an interest in them or to entering into an unconditional contract for the acquisition of them.
This section applies where—
a chargeable gain has accrued to a company not resident in the United Kingdom (the taxpayer company) on the disposal of an asset on or after 14th March 1989,
the gain forms part of its chargeable profits for corporation tax purposes by virtue of section 11(2)(b) of the Taxes Act 1988, and
any of the corporation tax assessed on the company for the accounting period in which the gain accrued is not paid within six months from the time when it becomes payable.
The Board may, at any time before the end of the period of three years beginning with the time when the amount of corporation tax for the accounting period in which the chargeable gain accrued is finally determined, serve on any person to whom subsection (4) below applies a notice—
stating the amount which remains unpaid of the corporation tax assessed on the taxpayer company for the accounting period in which the gain accrued and the date when the tax became payable, and
requiring that person to pay the relevant amount within thirty days of the service of the notice.
For the purposes of subsection (2) above the relevant amount is the lesser of—
the amount which remains unpaid of the corporation tax assessed on the taxpayer company for the accounting period in which the gain accrued, and
an amount equal to corporation tax on the amount of the chargeable gain at the rate in force when the gain accrued.
This subsection applies to the following persons—
any company which is, or within the relevant period was, a member of the same group as the taxpayer company, and
any person who is, or within the relevant period was, a controlling director of the taxpayer company or of a company which has, or within that period had, control over the taxpayer company.
Any amount which a person is required to pay by a notice under this section may be recovered from him as if it were tax due and duly demanded of him; and he may recover any such amount paid by him from the taxpayer company.
A payment in pursuance of a notice under this section shall not be allowed as a deduction in computing any income, profits or losses for any tax purposes.
In this section—
In this section “the relevant period” means—
where the time when the chargeable gain accrues is less than twelve months after 14th March 1989, the period beginning with that date and ending with that time;
in any other case, the period of twelve months ending with that time.
In section 26 of the Capital Gains Tax Act 1979 (value shifting: further provisions) in subsection (1)(a) (schemes whereby value of the asset disposed of is materially reduced) after the words “the asset” there shall be inserted the words “or a relevant asset” and at the end of that subsection there shall be inserted—
For subsection (7) of that section there shall be substituted—
In subsection (8) of that section for the words “reference in subsection (1)(a)” there shall be substituted the words “references in subsections (1)(a) and (1A)”.
This section shall have effect in respect of any disposal of an asset on or after 14th March 1989.
After section 26 of the Capital Gains Tax Act 1979 there shall be inserted—
This section shall have effect in respect of any disposal of an asset on or after 14th March 1989, but—
no account shall be taken by virtue of section 26A of the Capital Gains Tax Act 1979 of any reduction in the value of an asset attributable to the payment of a dividend unless it is paid on or after that date, and
no account shall be taken by virtue of section 26B of that Act of a reduction in the value of an asset attributable to the disposal of another asset unless the disposal took place on or after that date.
After section 26C of the Capital Gains Tax Act 1979 there shall be inserted—
This section shall have effect where the reduction in value, by reason of which the amount referred to in section 26D(1)(b) of the Capital Gains Tax Act 1979 falls to be calculated, occurred on or after 14th March 1989.
In section 272 of the Taxes Act 1970 (groups of companies: definitions) in subsection (1), for paragraphs (b) and (c) there shall be substituted—.
After that subsection there shall be inserted—
In subsection (3) of that section for the words from “75 per cent. subsidiary of another company” to “is the principal company” there shall be substituted the words “member of another group, the first group and the other group shall be regarded as the same”.
In subsection (4) of that section—
for the words “a company” there shall be substituted the words “a member of a group of companies”, and
for the words from “that company, or” to the end there shall be substituted the words “that or any other company ceasing to be a member of the group”.
In section 278 of that Act (deemed disposal of certain assets held by company leaving group) after subsection (3A) there shall be inserted—
In section 97 of the Inheritance Tax Act 1984 (transfers within group etc.)—
for the words “principal member” and “principal member's”, wherever appearing, there shall be substituted “principal company” and “principal company's” respectively,
for subsection (2)(a) there shall be substituted—, and
the words from “and in this section” in subsection (2) to the end shall be omitted.
Subject to the following provisions, this section shall be deemed to have come into force on 14th March 1989; but section 278(3E) of the Taxes Act 1970 shall have effect where the accounting period in which the company referred to in subsection (3B) of that section ceases to be a member of a group ends after the day appointed for the purposes of paragraph 4 of Schedule 6 to the Finance (No. 2) Act 1987.
Where— the company in question shall not be treated as selling that asset at that time unless the conditions in subsection (9) below become satisfied, assuming for that purpose that the old definition applies.
at the beginning of the commencement day a company ceases for the purposes of the group provisions to be a member of a group by reason only of the substitution for the old definition of the new definition, and
in consequence of ceasing to be such a member the company would, apart from this subsection, be treated by virtue of section 278(3) of the Taxes Act 1970 as selling an asset at any time,
Those conditions are—
that for the purposes of section 278 of that Act the company in question ceases at any time (“the relevant time”) to be a member of the group referred to in subsection (8)(a) above,
that, at the relevant time, the company in question, or an associated company also leaving that group at that time, owns otherwise than as trading stock the asset or property to which a chargeable gain has been carried forward from the asset on a replacement of business assets, and
that the time of acquisition referred to in section 278(1) of that Act fell within the period of six years ending with the relevant time.
Where, under any compromise or arrangement agreed to on any date before 14th March 1989 in pursuance of section 425 of the Companies Act 1985 and sanctioned by the court, one company acquires at any time, directly or indirectly, an interest in ordinary share capital of another company and immediately after that time— subsection (11) below applies; and in that subsection those companies and any other members of the group are referred to as “relevant companies”.
under the old definition the two companies are, by virtue of that acquisition, members of a group for the purposes of the group provisions, but
the second company is not an effective 51 per cent. subsidiary of the first company,
In respect of the period beginning with the time of acquisition and ending with— the old definition shall apply in relation to the relevant companies for the purposes of the group provisions and the commencement day in relation to those companies is the day following the end of that period.
the expiry of the six months beginning with the date of the agreement, or
if earlier, the date when, under the old definition, the other company ceases for the purposes of the group provisions to be a member of the group referred to in subsection (10)(a) above,
In subsections (8) to (11) above— and section 278(4) of that Act shall apply for the purposes of those subsections.
“ relevant shares ” means— shares that are held by the trustees of the employee share ownership trust at midnight on 20th March 2000, and shares purchased by those trustees with original funds after that time.
In relation to disposals on or after 14th March 1989 Chapter III of Part II of the Finance Act 1984 shall have effect subject to the following provisions of this section (and, in relation to such disposals, those provisions shall be regarded as always having had effect).
In subsection (2) of section 64 (which defines “corporate bond” for the purposes of that section and accordingly for the purposes of certain other enactments including, by virtue of section 64(1) of the Capital Gains Tax Act 1979, that Act) paragraph (a) shall be omitted.
After subsection (3) of section 64 there shall be inserted—
After subsection (5) of section 64 there shall be inserted—
In subsection (6) of section 64, after the words “this Act” there shall be inserted the words “except in relation to a disposal by a person who (at the time of the disposal) is not a member of the same group as the company which issued the security”.
In paragraph 10(2) of Schedule 13—
after paragraph (b) there shall be inserted—, and
the word “not” shall be inserted after the words “previous disposal”.
In this section—
Subsection (3) below applies in the case of arrangements which constitute a collective investment scheme and under which—
the contributions of the participants, and the profits or income out of which payments are to be made to them, are pooled in relation to separate parts of the property in question, and
the participants are entitled to exchange rights in one part for rights in another.
If a participant exchanges rights in one such part for rights in another section 78 of the Capital Gains Tax Act 1979 (reorganisations etc.) shall not prevent the exchange constituting a disposal and acquisition for the purposes of that Act.
The reference in subsection (3) above to section 78 of that Act—
includes a reference to that section as applied by section 82 of that Act (conversion of securities), but
does not include a reference to section 78 as applied by section 85 of that Act (exchange of securities for those in another company).
Subsection (3) above shall apply where rights are exchanged on or after 14th March 1989.
Section 78 of the Finance (No.2) Act 1987 shall cease to have effect as regards any case where the question it mentions is determined in relation to a disposal made on or after 14th March 1989.
Section 20 of the Taxes Management Act 1970 (power tocall for documents of taxpayer and others) shall be amended in accordance withsubsections (2) to (8) below.
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for the words “of the persons who in relation to the taxpayer are subject to this subsection” there shall be substituted the words “other person”, and
at the end there shall be added the words “; and the persons who may be required to deliver or make available a document under this subsection include the Director of Savings.”
Subsections (4) and (5) shall be omitted.
In subsection (6)—
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the words “and in relation” onwards shall be omitted.
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This section shall apply with respect to notices given on or after the day on which this Act is passed.
In section 20A of the Taxes Management Act 1970 (powerto call for papers of tax accountant) for the lasr sentence of subsection (1)there shall be substituted—
This section shall apply with respect to notices given on or after the dayon which this Act is passed.
Section 20B of the Taxes Management Act 1970(restrictions on powers under sections 20 and 20A) shall be amended as follows.
In subsection (1), after the word “question” there shall be inserted the words “, or to furnish the particulars in question”.
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In subsection (2), after the words “deliver documents”, in the first place where they occur, there shall be inserted the words “or furnish particulars”.
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In subsection (7), the words from “to a person” to “daughter”shall be omitted.
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This section shall apply with respect to notices given on or after the day on which this Act is passed.
After section 20B of the Taxes Management Act 1970there shall be inserted—
This section shall apply to any falsification, concealment, destructionor disposal of a document occurring on or after the day on which this Act ispassed.
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Section 20C of the Taxes Management Act 1970 (entry with warrant to obtain documents) shall be amended as follows.
In subsection (1)—
for the words “any form of fraud” there shall be substituted the words “serious fraud”, and
for the words “has been” there shall be substituted the words “is being, has been or is about to be”.
After that subsection there shall be inserted—
For subsections (3) to (5) there shall be substituted—
This section shall apply with respect to warrants issued on or after the day on which this Act is passed.
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The following section shall be inserted after section 20C of the Taxes Management Act 1970—
This section shall apply with respect to warrants issued on or after the day on which this Act is passed.
Section 20D of the Taxes Management Act 1970 shall beamended as follows.
In subsection (2), for the words “of returns or accounts to be made ordelivered by the other” there shall be substituted the words “or deliveryof any information, return, accounts or other document which he knows will be,or is or are likely to be, used”.
For subsection (3) there shall be substituted—
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The following section shall be substituted for section 36 of the Taxes Management Act 1970—
Sections 37 to 39 (special provisions as to “neglect”) and section41 (leave required for certain assessments) of the Taxes Management Act 1970shall cease to have effect.
The words “section 36” shall be substituted—
for the words “sections 36, 37 and 39” in section 30(6) of the Taxes Management Act 1970 (tax repaid in error etc.),
for the words “sections 37 to 39” in section 118(3) of that Act (effect under law of Scotland of assessment in partnership name),
for the words “sections 36 and 39” in paragraph 10(1) of Schedule 13to the Taxes Act 1988 (assessments to advance corporation tax), and
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The words “ fraudulent or negligent conduct ” shall be substituted—
for the words “fraud, wilful default or neglect” in—
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paragraph 9 of Schedule 16A to the Finance Act 1973and of Schedule 19A to the Taxes Act 1988 (Lloyd’s), and
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In section 105 of the Taxes Management Act 1970 (admissibility of evidence), for the words “fraud or default” and the words “fraud or wilful default” there shall be substituted the words “fraudulent conduct”.
In paragraph 9 of Schedule 16A to the Finance Act 1973 and of Schedule 19Ato the Taxes Act 1988, for “37, 40 and 41” there shall be substituted “and 40”.
Nothing in this section shall affect the making of assessments—
for years of assessment before the year 1983-84, or
for accounting periods which ended before 1st April 1983.
The following sections shall be inserted after section 43 of the TaxesManagement Act 1970—
This section shall apply in relation to any assessment notice of which isissued on or after the day on which this Act is passed.
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Income tax chargeable in respect of income arising to the trustees of a settlement, or to the personal representatives of a deceased person, may be assessed and charged on and in the name of any one or more of the relevant trustees or, as the case may be, the relevant personal representatives.
In this section “the relevant trustees”, in relation to any income, means the trustees to whom the income arises and any subsequent trustees of the settlement, and “the relevant personal representatives” has a corresponding meaning.
In this section “personal representatives” has the same meaning as in section 111 of this Act.
This section shall be deemed always to have had effect.
Section 61 of the Taxes Management Act 1970 (distress)shall be amended as follows.
In subsection (1), for the words “the collector shall” onwards thereshall be substituted the words “the collector may distrain upon the goods and chattels of the personcharged (in this section referred to as “the person indefault”).”
In subsection (2), for the words from “a collector” to “Commissioners” there shall be substituted the words “a justice of thepeace, on being satisfied by information on oath that there is reasonableground for believing that a person is neglecting or refusing to pay a sumcharged, may issue a warrant in writing authorising a collector to”.
In subsection (4), for the words “neglecting or refusing to pay”there shall be substituted the words “in default”.
In subsection (5)—
for the word “aforesaid” there shall be substituted the words “indefault”,
the words “within the said five days” shall be omitted,
for the words from “two or more inhabitants of the parish” to “sufficient persons” there shall be substituted the words “one or moreindependent persons appointed by the collector”, and
the words from “The costs” to “the collector, and” shall beomitted.
The following subsection shall be added after that subsection—
This section shall come into force on such day as the Treasury may byorder made by statutory instrument appoint.
Section 62 of the Taxes Management Act 1970 (priorityof claim for tax) shall be amended as follows.
In subsection (1)—
for the words from the beginning to “shall be” there shall besubstituted the words “If at any time at which any goods or chattelsbelonging to any person (in this section referred to as “the personin default”) are”,
for the word “unless” there shall be substituted the words “theperson in default is in arrears in respect of any such sums as are referredto in subsection (1A) below, the goods or chattels may not be so taken unlesson demand made by the collector”, and
for the words “arrears of tax” onwards there shall be substituted thewords “such sums as have fallen due at or before the date of seizure.”
The following subsection shall be inserted after that subsection—
In subsection (2)—
for the words from the beginning to “the collector shall” there shallbe substituted the words “If the sums referred to in subsection (1) aboveare not paid within ten days of the date of the demand referred to in thatsubsection, the collector may”,
for the words “shall proceed” there shall be substituted the words “may proceed”, and
for the words “the tax charged and claimed” there shall besubstituted the words “those sums”.
Section 63 of the Taxes Management Act 1970 (recoveryof tax in Scotland) shall be amended as follows.
In subsection (3), for the words “which relates to” onwards thereshall be substituted the wordsinsofar as it relates to sums due in respect of—
The following subsection shall be added after that subsection—
Section 64 of the Taxes Management Act 1970 (priority of claim for tax inScotland) shall be amended as follows.
In subsection (1)—
for the words from the beginning to “shall be” there shall besubstituted the words “If at any time at which any moveable goods andeffects belonging to any person (in this section referred to as “theperson in default”) are”,
for the word “unless” there shall be substituted the words “theperson in default is in arrears in respect of any such sums as are referredto in subsection (1A) below, the goods and effects may not be so taken unlesson demand made by the collector”, and
for the words “the tax so in arrear” onwards there shall besubstituted the words “such sums as have fallen due at or before the dateof poinding or, as the case may be, other diligence or assignation.”
The following subsection shall be inserted after that subsection—
In subsection (2)—
for the words from the beginning to “the tax claimed shall” thereshall be substituted the words “If the sums referred to in subsection (1)above are not paid within ten days of the date of the demand referred to inthat subsection, the sums shall”, and
for the words “proceeding at his instance” there shall be substitutedthe word “proceedings”.
In section 86 of the Taxes Management Act 1970, forsubsection (3) and the words in subsection (4) preceding the Table there shallbe substituted—.
In section 55 of that Act—
in subsection (2), for the words “it were” onwards there shall besubstituted the words “there had been no appeal.”,
in subsection (6), for paragraphs (a) and (b) there shall besubstituted—and
for subsection (9) there shall be substituted—
In section 56(9) of that Act, for the words “amount of” there shallbe substituted the words “amount charged by”.
This section shall apply to tax charged by any assessment notice of whichis issued after 30th July 1982.
In relation to any tax charged by an assessment made under section 252(1)of the Taxes Act 1988 to recover corporation tax that becomes payable as aresult of the making of a claim under section 240 of that Act, the reckonabledate for the purposes of section 86 of the Taxes ManagementAct 1970 (in this section referred to as “section 86”) is the date which is given by paragraph 5 ofthe Table in subsection (4) of that section.
Subsections (3) and (4) below apply in any case where—
there is in any accounting period of a company (in this section referredto as “the later period”) an amount of surplus advance corporationtax, as defined in subsection (3) of section 239 of the Taxes Act 1988, and
pursuant to a claim under the said subsection (3), the whole or any partof that amount is treated for the purposes of the said section 239 asdischarging liability for an amount of corporation tax for an earlieraccounting period (in this section referred to as “the earlier period”), and
if the claim under the said subsection (3) had not been made—
an amount of corporation tax assessed for the earlier period would carryinterest in accordance with section 86, or
an assessment could have been made under section 252(1) of that Act torecover corporation tax for the earlier period.
In determining the amount of interest payable under section 86 oncorporation tax unpaid for the earlier period, no account shall be taken ofany reduction in the amount of that tax which results from section 239(3) ofthe Taxes Act 1988 except so far as concerns interest for any time after theday following the expiry of nine months from the end of the later period.
Where, but for the claim under section 239(3) of the Taxes Act 1988, anassessment could have been made under section 252(1) of that Act to recovercorporation tax for the earlier period, interest under section 86 shall bechargeable, in relation to any time not later than the day referred to insubsection (3) above, as if the claim had not been made and such an assessmenthad been made.
In relation to interest charged under section 86 by virtue of subsection(4) above, section 69 of the Taxes Management Act 1970shall have effect with the substitution for the words following paragraph (c)of the words “as if it were tax charged and due and payable under anassessment”.
In this section— but this section shall not have effect in relation to corporation tax forany accounting period ending after the day which is the appointed day for thepurposes of section 85 of the Finance (No.2) Act 1987.
subsection (1) above shall have effect where the claim under 240 of theTaxes Act 1988 is made on or after 14th March 1989, and
subsections (2) to (5) above shall have effect where the claim undersection 239(3) of that Act is made on or after that date,
In the Taxes Management Act 1970— shall cease to have effect.
section 86(6) (remission of interest payable on overdue income tax,capital gains tax or corporation tax where interest would not exceed£30), and
section 87(4) (no interest payable on overdue advance corporation tax orincome tax on company payments where interest would not exceed £30),
The words “of not less than £25” in— and the words “of not less than £100” in section 825(2) of theTaxes Act 1988 (no repayment supplement where overdue repayment of company taxless than £100) shall cease to have effect.
[section 283(1) of the Taxation of Chargeable Gains Act 1992] (norepayment supplement where overdue repayment of capital gains tax less than£25), and
section 824(1)(a) and (b) and (5) of the Taxes Act 1988 (no repaymentsupplement where overdue repayment of income tax etc. less than £25),
Paragraph (a) of subsection (1) above shall have effect—
in relation to income tax under Schedule E, where the demand for the taxis made on or after the appointed day, and
in any other case, where the tax is charged by an assessment notice ofwhich is issued on or after the appointed day.
Paragraph (b) of that subsection shall have effect where the tax ischarged by an assessment relating to an accounting period beginning on orafter the appointed day.
Subsection (2) above shall have effect in relation to repayments of taxmade on or after the appointed day.
In this section “the appointed day” means such day as theTreasury may by order made by statutory instrument appoint; and different daysmay be appointed for different enactments or for different purposes of thesame enactment.
Section 88 of the Taxes Management Act 1970 (intereston tax recovered to make good loss due to taxpayer’s fault) shall be amendedas follows.
In subsection (1), for the words “the fraud, wilful default or neglectof any person” there shall be substituted the words—.
The following subsection shall be added at the end—
This section shall have effect in relation to failures occurring, anderrors in any information or documents delivered, on or after the day on whichthis Act is passed.
In subsection (1) of section 88 of the Taxes Management Act 1970, for thewords “shall carry” there shall be substituted the words “shall, if aninspector or the Board so determine, carry”.
The following section shall be inserted after that section—
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In section 113 of that Act (form of documents), the following subsectionshall be inserted after subsection (1B)—
In section 114 of that Act (want of form not to invalidate), after theword “assessment”, in each place where it occurs, there shall be insertedthe words “or determination”.
In paragraph 5 of Schedule 3 to that Act (rules for assigning proceedingsto Commissioners), the following entry shall be inserted in the first columnafter the entry relating to an appeal against an assessment to capital gainstax— “ An appeal against a determination under section 88 of this Act. ”
The following subsection shall be substituted for section 88(3) of the Taxes Management Act 1970—
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Section 93 of the Taxes Management Act 1970 (failure to comply with notice to make return for income tax or capital gains tax) shall be amended as follows.
In subsection (1) (initial and daily penalties), for paragraphs (a) and (b) there shall be substituted—
The following subsection shall be substituted for subsection (2)—
The following subsection shall be substituted for subsection (5)—
The following subsection shall be substituted for subsection (7)—
This section shall apply in relation to any failure to comply with a notice served on or after 6th April 1989.
In— for the words “the aggregate” onwards there shall be substituted thewords “the amount of the difference specified in subsection (2) below.”
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section 96(1) of that Act (incorrect return etc. for corporation tax),
This section shall apply in relation to returns, statements, declarationsor accounts delivered, made or submitted on or after the day on which this Actis passed.
Section 98 of the Taxes Management Act 1970 (special returns, information etc.) shall be amended as follows.
In subsection (1) (initial and daily penalties)—
for the word “Where” there shall be substituted the words “Subject to section 98A below, where”, and
for the words “subsection (3)” onwards there shall be substituted the wordssubsections (3) and (4) below—
In subsection (2) (maximum penalty for information given fraudulently or negligently)—
for the word “Where” there shall be substituted the words “Subject to section 98A below, where”, and
for the words “ £250, or, in the case of fraud, £500”there shall be substituted “ £3,000”.
The following subsections shall be substituted for subsection (3)—
In the Table—
in the first column, in the entry relating to Part III of the Taxes Management Act 1970, the words “, except sections 16 and 24(2)” shall be omitted;
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the entry relating to section 481(5)(k) of that Act shall be omitted from the first column and an entry relating to section 482(2) of that Act shall be inserted at the appropriate place in the second column.
In consequence of the amendment made by subsection (5)(a) above section16(6) of the Taxes Management Act 1970 shall cease to have effect.
This section shall apply in relation to—
any failure to comply with a notice or to furnish information, give a certificate or produce a document or record beginning on or after the day on which this Act is passed, and
the furnishing, giving, producing or making of any incorrect information, certificate, document, record or declaration on or after that day.
The following section shall be inserted after section 98 of the TaxesManagement Act 1970—
In relation to a failure to make a return beginning before such day as theTreasury may by order made by statutory instrument appoint, section 98A(2)shall have effect with the substitution of the following paragraph forparagraph (a)—.
The following section shall be substituted for section 99 of the Taxes Management Act 1970—
This section shall apply in relation to assistance and inducementsoccurring on or after the day on which this Act is passed.
The following sections shall be substituted for section 100 of the Taxes Management Act 1970—
In consequence of the amendment made by section 167 above the Taxes Management Act 1970 shall be amended in accordance withsubsections (2) to (8) below.
In section 20A (power to call for papers of tax accountant)—
in subsection (1), for the words “awarded against him a penalty incurredby” there shall be substituted the words “a penalty imposed on”,
in subsection (2), for the word “award” in the first place where itoccurs there shall be substituted the word “penalty” and for that wordin the second place where it occurs there shall be substituted the word “imposition”, and
in subsection (4), for the words “award against” there shall besubstituted the words “imposition on” and for the word “award” thereshall be substituted the word “penalty”.
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in subsection (1), for the word “awarded” there shall be substituted the word “determined” and for the words “for its recovery” there shall be substituted the words “under section 100C of this Act”,
in subsection (2), for the words “award” and “decision” there shall be substituted the word “determination” and for the word “awarded” there shall be substituted the word “determined”, and
in subsection (3), for the word “awarded” there shall be substituted the word “determined”.
In section 102 (mitigation of penalties), for the words “recoverythereof” there shall be substituted the words “a penalty”.
In section 105 (evidence)—
the following paragraph shall be substituted for paragraph (a) ofsubsection (1)—,
in paragraph (b) of subsection (2), for the words “sum” onwards thereshall be substituted the words “tax due from him”, and
after that paragraph there shall be inserted the wordsand
In section 112 (loss of documents etc.), the following subsection shallbe added at the end—
In section 113 (form of documents)—
the following subsection shall be inserted after subsection (1C)—and
in subsection (3)—
after the words “Every assessment,” there shall be inserted the words “determination of a penalty,”,
after the words “notice of assessment” there shall be inserted thewords “, of determination”, and
after the words “levying tax” there shall be inserted the words “ordetermining a penalty”.
In paragraph 5 of Schedule 3 (rules for assigning proceedings toCommissioners), for the words “section 100(4)” there shall be substitutedthe words “section 100C or an appeal under section 100B against thedetermination of a penalty”.
In section 41 of the Development Land Tax Act 1976(administration of development land tax) the following subsection shall beinserted after subsection (1)—
The following section shall be substituted for section 103 of the Taxes Management Act 1970—
The amendment made by subsection (1) above shall not affect theapplication of section 103(4) of the Taxes Management Act1970 to proceedings under section 100 of that Act as it has effect before theamendment made by section 167 above.
In section 23(8) of the Taxes Act 1988 (maximum penalty for agents failing to make certain payments on behalf of principals), for “£50” there shall be substituted “£300”.
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In— for “£500” there shall be substituted “£3,000”.
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section 658(5) of that Act (maximum penalty for false statements or representations relating to purchased life annuities),
In paragraph 2(4) of Schedule 19A to that Act and Schedule 16A to the Finance Act 1973 (maximum penalty for incorrect return byLloyd’s agent), for the words “£500 in the case of fraud and £250 in the case of negligence” there shall be substituted “£3,000”.
This section shall apply in relation to things done or omitted on or after the day on which this Act is passed.
The following section shall be inserted in the Inheritance Tax Act 1984 after section 24—
In section 23(5) of the Inheritance Tax Act 1984 the words “or, where it is land, of a body mentioned in section 24Abelow” shall be added at the end.
In section 29(5) of that Act—
the words “or, where it is land, of a body mentioned in section24A” shall be inserted at the end of paragraph (b), and
after “24(3) and (4),” there shall be inserted “24A(3),”.
In section 161(2)(b)(ii) of that Act after “24,” there shall beinserted “24A,”.
In section 102(5) of the Finance Act 1986 afterparagraph (e) there shall be inserted—.
This section shall apply to transfers of value made on or after 14th March1989.
The following section shall be inserted after section 29 of the Inheritance Tax Act 1984—
This section shall have effect in relation to deaths occurring on or afterthe day on which this Act is passed.
Stamp duty shall not be chargeable under—
the heading “Policy of Life Insurance” in Schedule 1 tothe Stamp Act 1891, or
paragraph (3) of the heading “Bond, Covenant, or Instrument of any kindwhatsoever” in that Schedule (superannuation annuities).
Subject to section 4 of the Stamp Act 1891 (separate charges oninstruments containing or relating to several distinct matters) an instrumentwhich, but for subsection (1) above, would be chargeable with stamp duty underparagraph (3) of the heading mentioned in paragraph (b) of that subsectionshall not be chargeable with stamp duty under any other provision of the StampAct 1891.
Section 100 of the Stamp Act 1891 (penalty for not making out policy ormaking policy not duly stamped) shall cease to have effect.
Section 118 of the Stamp Act 1891 (assignment of life insurance policy tobe stamped before payment of money assured) shall cease to have effect.
Section 47(3) of the Finance Act 1966 (enhanced dutywhere policy not exceeding 2 years is varied so as to exceed 2 years) andsection 5(3) of the Finance Act (Northern Ireland)1966 (equivalent provision for Northern Ireland) shall cease to have effect.
Subsections (1) and (2) above apply to instruments made after 31stDecember 1989.
So far as it relates to section 100(1) of the 1891 Act, subsection (3)above applies where a person receives, or takes credit for, a premium orconsideration for insurance after 30th November 1989.
So far as it relates to section 100(2) of the 1891 Act, subsection (3)above applies where the policy is made after 31st December 1989.
Subsection (4) above applies to instruments of assignment made after 31stDecember 1989.
Subsection (5) above applies where the policy is varied after 31stDecember 1989 (whenever it was made).
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The following section shall be substituted for section 101 of the Finance Act 1980—
This section shall have effect in relation to the transfer of units on or after the day on which this Act is passed.
The Treasury may by regulations provide that where — the charge to stamp duty shall be treated as not arising.
circumstances would (apart from the regulations) give rise to a charge to stamp duty under Part I of Schedule 13 to the Finance Act 1999 (conveyance or transfer on sale) and to a charge to stamp duty reserve tax,
the circumstances involve a stock exchange nominee, and
the circumstances are such as are prescribed,
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.
In this section —
“prescribed” means prescribed by the regulations, and
“stock exchange nominee” means a person designated for the purposes of section 127 of the Finance Act 1976 as a nominee of The Stock Exchange by an order made by the Secretary of State under subsection (5) of that section.
The Treasury may by regulations provide that where — such one of the charges as may be prescribed shall be treated as not arising.
circumstances would (apart from the regulations) give rise to two charges to stamp duty reserve tax,
the circumstances involve a stock exchange nominee, and
the circumstances are such as are prescribed,
The Treasury may by regulations provide that where — the charge to stamp duty reserve tax shall be treated as not arising.
circumstances would (apart from the regulations) give rise to a charge to stamp duty reserve tax and a charge to stamp duty,
the circumstances involve a stock exchange nominee, and
the circumstances are such as are prescribed,
The Treasury may by regulations provide that a provision of an Act by virtue of which there is no charge to stamp duty reserve tax shall also apply in circumstances which involve a stock exchange nominee and are such as are prescribed.
The Treasury may by regulations provide that a provision of an Act by virtue of which the rate at which stamp duty reserve tax is charged is less than it would be apart from the provision shall also apply in circumstances which involve a stock exchange nominee and are such as are prescribed.
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.
In this section —
“prescribed” means prescribed by the regulations, and
“stock exchange nominee” means a person designated for the purposes of section 127 of the Finance Act 1976 as a nominee of The Stock Exchange by an order made by the Secretary of State under subsection (5) of that section.
— Regulations under section 98(1) of the Finance Act 1986 (administration etc. of stamp duty reserve tax) may include —
provision that notice which the regulations require to be given to the Commissioners of Inland Revenue shall be given in a manner or form specified by the Commissioners;
provision that information which the regulations require to be supplied to the Commissioners shall be supplied in a manner or form specified by the Commissioners.
The rate of interest applicable for the purposes of an enactment to which this section applies shall be the rate which for the purposes of that enactment is provided for by regulations made by the Treasury under this section.
This section applies to—
section 8(9) of the Finance Act 1894,
section 15A of the Stamp Act 1891;
section 18 of the Finance Act 1896,
section 61(5) of the Finance (1909-10) Act 1910,
section 17(3) of the Law of Property Act 1925,
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sections ... 86, 86A, 87, 87A, 88, 103A of the Taxes Management Act 1970,
paragraph 3 of Schedule 16A to the Finance Act 1973,
paragraphs 15 and 16 of Schedule 2, and paragraph 8 of Schedule 5, to the Oil Taxation Act 1975,
section 283 of the Taxation of Chargeable Gains Act 1992;
section 48(1) of the Finance Act 1975,
paragraph 59 of Schedule 8 to the Development Land Tax Act 1976,
paragraph 6 of Schedule 1 to the Social Security Contributions and Benefits Act 1992,
sections 233 , 235(1) and 236(3) and (4) of the Inheritance Tax Act 1984,
section 71(8A) of the Social Security Administration Act 1992, and section 69(8A) of the Social Security Administration (Northern Ireland) Act 1992, as they have effect in any case where the overpayment was made in respect of working families’ tax credit or disabled person’s tax credit;
section 92 of the Finance Act 1986, and
sections . . . ... 824, 825 and 826 of, and paragraph 6B of Schedule 3 to and paragraph 3 of Schedule 19A to, the Taxes Act 1988. and
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section 14(4) of the Ports Act 1991.
paragraph 8 of Schedule 4 to the Tax Credits Act 1999., ...
section 110 of the Finance Act 1999.
paragraph 8 of Schedule 1 to the Employment Act 2002.
paragraph 8 of Schedule I to the Employment (Northern Ireland) Order 2002., and
Chapter 7 of Part 3 of the Income Tax (Earnings and Pensions) Act 2003.
sections 87, 88 and 89 of the Finance Act 2003, ...
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sections 67 and 68 of the Finance Act 2020.
paragraphs 33 and 33A of Schedule 14 to the Finance (No.2) Act 2023.
paragraphs 33 and 33A of Schedule 14 to the Finance (No.2) Act 2023, as applied in relation to domestic top-up tax by paragraph 4 of Schedule 18 to that Act.
Regulations under this section may—
make different provision for different enactments or for different purposes of the same enactment,
either themselves specify a rate of interest for the purposes of an enactment or make provision for any such rate to be determined by reference to such rate or the average of such rates as may be referred to in the regulations,
provide for rates to be reduced below, or increased above, what they otherwise would be by specified amounts or by reference to specified formulae,
provide for rates arrived at by reference to averages to be rounded up or down,
provide for circumstances in which alteration of a rate of interest is or is not to take place, and
provide that rates or alterations of rates are to have effect for periods beginning on or after a day determined in accordance with the regulations in relation to interest running from before that day as well as from or from after that day.
The power to make regulations under this section shall be exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of the House of Commons.
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the rate provided for by regulations under this section as the rate applicable for the purposes of any enactment is changed, and
the new rate is not specified in the regulations,
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The words “rate applicable under section 178 of the Finance Act 1989”shall be substituted—
for the words from “rate” to “annum” in—
section 18(1) of the Finance Act 1896,
section 61(5) of the Finance (1909-10) Act 1910,
section 17(3) of the Law of Property Act 1925,
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paragraphs 15(1) and 16 of Schedule 2, and paragraph 8(4) of Schedule 5,to the Oil Taxation Act 1975,
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sections 824(1) and 825(2) of the Taxes Act 1988,
for the words“ prescribed rate” in—
sections 86(1), 86A(1), 87(1), 87A(1) ... and 88(1) of the Taxes Management Act 1970,
paragraph 3(4) of Schedule 16A to the Finance Act1973, and
paragraph 3(4) of Schedule 19A to the Taxes Act 1988,
for the words “rate which” onwards in—
paragraph 59(1) of Schedule 8 to the Development LandTax Act 1976, and
section 826(1) of the Taxes Act 1988,
for the words “rate applicable under subsection (2) below” in section233(1) of the Inheritance Tax Act 1984,
for the words “rate for the time being applicable under section233(2)(b) above” in subsection (3), and the words “rate for the timebeing applicable under section 233(2)(a) above” in subsection (4), ofsection 236 of that Act,
for the words “appropriate rate” in section 92(2) of the Finance Act 1986, and
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In section 8(9) of the Finance Act 1894, for thewords from “such interest” to “per cent.” there shall be substitutedthe words “interest at such rate not exceeding that applicable under section178 of the Finance Act 1989”.
In section 236(4) of the Inheritance Tax Act 1984, for the words “as ifsection 233(1)(b) above had applied” there shall be substituted the words “from the end of the period mentioned in section 233(1)(b) above”.
Any amendment made by subsection (1), (2) or (3) above shall have effect in relation to any period for which section 178(1) above has effect for thepurposes of the enactment concerned.
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In section 48(1) of the Finance Act 1975, after thewords “carry interest” there shall be inserted the words “from the dateon which the sums were paid until the order for repayment is issued”.
In— for the word “repayment” there shall be substituted the words “theorder for repayment is issued”.
paragraph 16 of Schedule 2 to the Oil Taxation Act1975,
section 105(7) of the Finance Act 1980,
paragraph 13(4) and (5) of Schedule 16 to the FinanceAct 1981, and
paragraph 10(4) of Schedule 19 to the Finance Act1982,
In paragraph 59(1) of Schedule 8 to the DevelopmentLand Tax Act 1976, after the word “later,” there shall be inserted thewords “until the order for repayment is issued”.
In section 235(1) of the Inheritance Tax Act 1984(and paragraph 19(3) of Schedule 4 to the Finance Act1975), after the word “made” there shall be inserted the words “untilthe order for repayment is issued”.
In section 92(2) of the Finance Act 1986, for thewords “the time it was paid” there shall be substituted the words “thedate on which the payment was made until the order for repayment isissued”.
In section 826(1) of the Taxes Act 1988, for the words “that repaymentor payment is made” there shall be substituted the words “the order forrepayment or payment is issued”.
The amendments made by this section shall be deemed always to have hadeffect.
The Broadcasting Act 1981 shall have effect withrespect to additional payments payable by programme contractors under that Actsubject to the amendments made by Part I, and with the substitution, forSchedule 4 to that Act, of the provisions contained in Part II, of Schedule16 to this Act.
The transitional provisions made by Part III of that Schedule shall haveeffect.
This section shall come into force on 1st January 1990.
A person who discloses any information which he holds or has held in the exercise of tax functions , tax credit functions , child trust fund functionsor social security functions is guilty of an offence if it is information about any matter relevant, for the purposes of any of those functions—
to tax or duty in the case of any identifiable person,
to a tax credit in respect of any identifiable person,
to a child trust fund of any identifiable person,
to contributions payable by or in respect of any identifiable person, or
to statutory sick pay , statutory maternity pay, statutory paternity pay, statutory adoption pay , statutory shared parental pay , statutory parental bereavement pay or statutory neonatal care pay in respect of any identifiable person.
In this section “tax functions” means functions relating to tax or duty—
of the Commissioners, the Board and their officers,
of any person carrying out the administrative work of the First-tier Tribunal or Upper Tribunal, and
of any other person providing, or employed in the provision of, services to any person mentioned in paragraph (a) or (b) above.
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the General Commissioners and the Special Commissioners,
any value added tax tribunal,
any referee or board of referees appointed for the purposes of section 80(3) of the Taxes Management Act 1970 or under section 26(7) of the Capital Allowances Act 1968, and
any tribunal established under section 463 of the Taxes Act 1970 or section 706 of the Taxes Act 1988.
In this section “tax credit functions” means the functions relating to tax credits—
of the Board,
of any person carrying out the administrative work of the the First-tier Tribunal or Upper Tribunal, and
of any other person providing, or employed in the provision of, services to the Board or to any person mentioned in paragraph (b) above.
A person who discloses any information which— is guilty of an offence.
he holds or has held in the exercise of functions—
of the Comptroller Auditor General , of the National Audit Office and any member or employee of that Office or of any member of the staff of the National Audit Office that was established by section 3 of the National Audit Act 1983, . . .
of the Parliamentary Commissioner for Administration and his officers,
of the Comptroller and Auditor General for Northern Ireland and any member of the staff of the Northern Ireland Audit Office,
of the Auditor General for Wales and any member of his staff, ...
of the Wales Audit Office and any member or employee of that Office,
of the Public Services Ombudsman for Wales and any member of his staff, or
of the Scottish Public Services Ombudsman and any member of his staff,
is, or is derived from, information which was held by any person in the exercise of tax functions , tax credit functions , child trust fund functions or social security functions, and
is information about any matter relevant, for the purposes of tax functions , tax credit functions , child trust fund functions or social security functions—
to tax or duty in the case of any identifiable person,
to a tax credit in respect of any identifiable person,
to a child trust fund of any identifiable person,
to contributions payable by or in respect of any identifiable person, or
to child benefit, guardian’s allowance, statutory sick pay , statutory maternity pay, statutory paternity pay, statutory adoption pay , statutory shared parental pay , statutory parental bereavement pay or statutory neonatal care pay in respect of any identifiable person
In this section “child trust fund functions” means the functions relating to child trust funds—
of the Board and their officers,
of any person carrying out the administrative work of the First-tier Tribunal or an appeal tribunal constituted under Chapter 1 of Part 2 of the Social Security (Northern Ireland) Order 1998, or
of any person providing, or employed in the provision of, services to the Board or any person mentioned in paragraph (b) above.
Subsections (1) and (4) above do not apply to any disclosure of information—
with lawful authority,
with the consent of any person in whose case the information is about a matter relevant to tax or duty , to a tax credit or to a child trust fund or to contributions, statutory sick pay , statutory maternity pay, statutory paternity pay, statutory adoption pay , statutory shared parental pay , statutory parental bereavement pay or statutory neonatal care pay, or
which has been lawfully made available to the public before the disclosure is made.
In this section “social security functions” means—
the functions relating to contributions, child benefit, guardian’s allowance, statutory sick pay , statutory maternity pay, statutory paternity pay, statutory adoption pay , statutory shared parental pay , statutory parental bereavement pay or statutory neonatal care pay—
of the Board and their officers,
of any person carrying out the administrative work of the the First-tier Tribunal or Upper Tribunal, and
of any other person providing, or employed in the provision of, services to any person mentioned in sub-paragraph (i) or (ii) above, and
the functions under Part III of the Pension Schemes Act 1993 or Part III of the Pension Schemes (Northern Ireland) Act 1993 of the Board and their officers and any other person providing, or employed in the provision of, services to the Board or their officers.
For the purposes of this section a disclosure of any information is made with lawful authority if, and only if, it is made— and in this subsection “the person responsible” means the Commissioners, the Board, the Comptroller and Auditor General, the Comptroller and Auditor General for Northern Ireland , the Parliamentary Commissioner, the Auditor General for Wales , the Public Services Ombudsman for Wales or the Scottish Public Services Ombudsman, as the case requires.
by a Crown servant in accordance with his official duty,
by any other person for the purposes of the function in the exercise of which he holds the information and without contravening any restriction dulyimposed by the person responsible,
to, or in accordance with an authorisation duly given by, the person responsible,
in pursuance of any enactment or of any order of a court, or
in connection with the institution of or otherwise for the purposes of any proceedings relating to any matter within the general responsibility of the Commissioners or, as the case requires, the Board,
It is a defence for a person charged with an offence under this section to prove that at the time of the alleged offence—
he believed that he had lawful authority to make the disclosure in question and had no reasonable cause to believe otherwise, or
he believed that the information in question had been lawfully made available to the public before the disclosure was made and had no reasonablecause to believe otherwise.
A person guilty of an offence under this section is liable—
on conviction on indictment, to imprisonment for a term not exceeding two years or a fine or both, and
on summary conviction, to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum or both.
No prosecution for an offence under this section shall be instituted in England and Wales or in Northern Ireland except—
by the Commissioners or the Board, as the case requires, or
by or with the consent of the Director of Public Prosecutions or, in Northern Ireland, the Director of Public Prosecutions for Northern Ireland.
In this section— “the Board” means the Commissioners of Inland Revenue, “child trust fund” has the same meaning as in the Child Trust Funds Act 2004, “the Commissioners” means the Commissioners of Customs and Excise, “contributions” means contributions under Part I of the Social Security Contributions and Benefits Act 1992 or Part I of the Social Security Contributions and Benefits (Northern Ireland) Act 1992; “Crown servant” has the same meaning as in the Official Secrets Act 1989, “tax credit” means a tax credit under the Tax Credits Act 2002, and “tax or duty” means any tax or duty within the general responsibility of the Commissioners or the Board.
“the Board” means the Commissioners of Inland Revenue,
In this section—
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references to the Parliamentary Commissioner for Administration include the Health Service Commissioner for England... , ... the Assembly Ombudsman for Northern Ireland and the Northern Ireland Commissioner for Complaints.
This section shall come into force on the repeal of section 2 of the Official Secrets Act 1911.
In this section, in relation to the disclosure of information “identifiable person” means a person whose identity is specified in the disclosure or can be deduced from it.
In this section, references to statutory paternity pay, statutory adoption pay , statutory shared parental pay , statutory parental bereavement pay or statutory neonatal care pay include statutory pay under Northern Ireland legislation corresponding to Part 12ZA , Part 12ZB , Part 12ZC , Part 12ZD or Part 12ZE of the Social Security Contributions and Benefits Act 1992 (c. 4).
In section 47 of the Finance Act 1942 (power to makeregulations about transfer and registration of Government stock)—
the following paragraph shall be inserted after paragraph (b) ofsubsection (1)—and
the following subsection shall be inserted after that subsection—
In section 3(1) of the National Debt Act 1972 (powerto make regulations about stock on the National Savings Stock Register) thefollowing paragraph shall be inserted after paragraph (b)—.
After section 14 of the National Loans Act 1968 thereshall be inserted—
A person who discloses any information acquired by him in the exercise of his functions as a member of an advisory commission set up under the Arbitration Convention is guilty of an offence.
Subsection (1) above does not apply to any disclosure of information—
with the consent of the person who supplied the information to the commission, or
which has been lawfully made available to the public before the disclosure is made.
It is a defence for a person charged with an offence under this section to prove that at the time of the alleged offence he believed that the information in question had been lawfully made available to the public before the disclosure was made and had no reasonable cause to believe otherwise.
A person guilty of an offence under this section is liable—
on conviction on indictment, to imprisonment for a term not exceeding two years or a fine or both;
on summary conviction, to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum or both.
No prosecution for an offence under this section shall be instituted in England and Wales or in Northern Ireland except—
by the Board, or
by or with the consent of the Director of Public Prosecutions or, in Northern Ireland, the Director of Public Prosecutions for Northern Ireland.
In this section—
“the Board” means the Commissioners of Inland Revenue.
In section 2 of the National Savings Bank Act 1971(general power to make regulations) after subsection (1) there shall beinserted—
In section 5 of that Act (interest on ordinary deposits) in subsection (1)for the words from the beginning to “in any ordinary deposit account”there shall be substituted “The Director of Savings may, with the consentof the Treasury, from time to time determine the rate or rates at whichinterest is to be payable on amounts deposited in ordinary accounts or thatno interest is to be payable on such amounts, and any such determination inrelation to amounts deposited in any ordinary deposit account may be made”.
After subsection (1) of section 5 of that Act there shall beinserted—
Subsection (5) of section 5 of that Act (rate of interest on ordinarydeposits to be not less than 2.5 per cent per annum) shall cease to haveeffect.
Subsections (2) and (3) above shall come into force on 1st October 1989.
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In this Act “the Taxes Act 1970” means the Income and Corporation Taxes Act 1970 and “the Taxes Act1988” means the Income and Corporation Taxes Act1988.
Chapter II of Part I of this Act shall be construed as one with the Value Added Tax Act 1983.
Part II of this Act, so far as it relates to capital gains tax, shall beconstrued as one with the Capital Gains Tax Act 1979.
The enactments specified in Schedule 17 to this Act (which includeunnecessary enactments) are hereby repealed to the extent specified in thethird column of that Schedule, but subject to any provision at the end of anyPart of that Schedule.
The repeal of the enactments specified in Part XIV of Schedule 17 shallcome into force on such day as the Treasury may appoint by order made bystatutory instrument; and different days may be appointed for differentenactments.
This Act may be cited as the Finance Act 1989.
Section 89A.
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