Finance Act 1997
In section 5 of the Alcoholic Liquor Duties Act 1979 (spirits), for “£19.78” there shall be substituted “£18.99”.
In Part II of the Table of rates of duty in Schedule 1 to that Act (wine or made-wine of a strength exceeding 22 per cent.), for “19.78” there shall be substituted “18.99”.
This section shall be deemed to have come into force at 6 o'clock in the evening of 26th November 1996.
For Part I of the Table of rates of duty in Schedule 1 to the Alcoholic Liquor Duties Act 1979 (wine and made-wine of a strength not exceeding 22 per cent.) there shall be substituted—
This section shall be deemed to have come into force on 1st January 1997.
In subsection (1A) of section 62 of the Alcoholic Liquor Duties Act 1979 (rates of excise duty on cider)—
in paragraph (a), after “exceeding 7.5 per cent.” there shall be inserted “which is not sparkling cider”; and
immediately before the word “and” at the end of that paragraph there shall be inserted the following paragraph—.
After subsection (6) of that section there shall be inserted the following subsection—
After that section there shall be inserted the following section—
In section 64 of that Act (remission or repayment of duty on spoilt cider), after subsection (1) there shall be inserted the following subsection—
This section shall be deemed to have come into force on 1st January 1997.
Any order or regulations made under section 62 or 64 of the Alcoholic Liquor Duties Act 1979 before 1st January 1997—
shall have effect (but only if and for so long as the order or regulations would be in force apart from this subsection) as if the amendments made to that Act by this section had been made before the making of the order or regulations, and
shall be deemed at all times on or after that date so to have had effect.
After the section 62A inserted into the Alcoholic Liquor Duties Act 1979 by section 3 above there shall be inserted the following section—
This section shall be deemed to have come into force on 1st January 1997.
After section 55A of the Alcoholic Liquor Duties Act 1979 there shall be inserted the following section—
In section 1 of that Act (interpretation)—
in subsection (5) (meaning of “made-wine”), after “subsection (10)” there shall be inserted “and section 55B(1)”; and
in subsection (6) (meaning of “cider”), after “means” there shall be inserted “, subject to section 55B(1) below,”.
In section 2(3A) of that Act (regulations may provide for duty to be charged by reference to strengths shown on bottle labels)—
after the word “beer,”, in the first place where it occurs, there shall be inserted “cider,”; and
for the words “spirits, beer, wine or made-wine”, in the second place where they occur, there shall be substituted “liquor in that bottle or other container”.
In section 56(1)(c) of that Act (restriction on use of wine in production of made-wine), after “of wine” there shall be inserted “or cider”.
Subsections (1) and (2) above shall be deemed to have come into force on 1st January 1997.
In section 6(1) of the Hydrocarbon Oil Duties Act 1979, for “£0.3912” (duty on light oil) and “£0.3430” (duty on heavy oil) there shall be substituted “£0.4168” and “£0.3686”, respectively.
In section 8(3) of that Act (duty on road fuel gas), for “£0.2817” there shall be substituted “£0.2113”.
In section 11(1) of that Act (rebate on heavy oil), for “£0.0181” (fuel oil) and “£0.0233” (gas oil) there shall be substituted “£0.0194” and “£0.0250”, respectively.
In section 14(1) of that Act (rebate on light oil for use as furnace fuel), for “£0.0181” there shall be substituted “£0.0194”.
This section shall be deemed to have come into force at 6 o'clock in the evening of 26th November 1996.
In section 1 of the Hydrocarbon Oil Duties Act 1979 (definitions of oil)—
in subsection (1), for “(2) to (4)” there shall be substituted “(2) to (6)”; and
after subsection (4) there shall be inserted the following subsections—
In section 6 of that Act (excise duty on hydrocarbon oil), in subsection (1) (as amended by section 6 above), for the words from “the rate of £0.4168” to the end of the subsection there shall be substituted “the rates specified in subsection (1A) below.”
After subsection (1) of that section there shall be inserted the following subsection—
In subsection (3) of that section, for “that subsection” there shall be substituted “subsection (1A) above”.
In section 11(1) of that Act (rebate on heavy oil)—
in paragraph (b), after “gas oil” there shall be inserted “which is not ultra low sulphur diesel”;
for the word “and” at the end of that paragraph there shall be substituted—; and
in paragraph (c), for “other than fuel oil and” there shall be substituted “which is neither fuel oil nor”.
In section 13AA(6) of that Act (rate for rebated gas oil), for “section 6(1) above in the case of heavy oil” there shall be substituted “section 6(1A) above in the case of heavy oil which is not ultra low sulphur diesel,”.
In subsection (1) of section 24 of that Act (control of use of duty-free and rebated oil), after “section 9(1) or (4),” there shall be inserted “section 11,”.
In section 27(1) of that Act (interpretation)—
“gas oil” has the meaning given by section 1(5) above;
“ultra low sulphur diesel” has the meaning given by section 1(6) above.
In Schedule 2A to that Act (mixing of heavy oil)—
in paragraph 4(a), after “section 11(1)(b)” there shall be inserted “or (ba)”;
in paragraph 6(b), after “section 11(1)(b)” there shall be inserted “or (ba)”;
after paragraph 6 there shall be inserted—;
in paragraph 7 (complex mixtures of heavy oils), for the words from “if such a mixture” to the end of the paragraph there shall be substituted “if the production of a mixture of two of the components of that mixture is a contravention of any of paragraphs 4 to 6A above.”;
in paragraph 8(4) (rate for light oil), for “section 6(1)” there shall be substituted “section 6(1A)”;
in paragraph 9(2) (rate for heavy oil), for “in the case of heavy oil by section 6(1) of this Act” there shall be substituted “by section 6(1A) of this Act in the case of heavy oil which is not ultra low sulphur diesel”; and
“fuel oil” and “gas oil” have the same meanings “fuel oil” has the same meaning
This section shall come into force on such day as the Commissioners of Customs and Excise may by order made by statutory instrument appoint.
For the Table of rates of duty in Schedule 1 to the Tobacco Products Duty Act 1979 there shall be substituted— 1. Cigarettes An amount equal to 21 per cent. of the retail price plus £65.97 per thousand cigarettes. 2. Cigars £98.02 per kilogram. 3. Hand-rolling tobacco £87.74 per kilogram. 4. Other smoking tobacco and chewing tobacco £43.10 per kilogram.
This section shall be deemed to have come into force at 6 o'clock in the evening of 26th November 1996.
In subsection (2) of section 30 of the Finance Act 1994 (rate of duty for journeys ending in the UK, another EEA State or certain territories for whose external relations either the UK or another member State is responsible), for “£5” there shall be substituted “£10”.
In subsection (4) of that section (rate of duty in other cases), for “£10” there shall be substituted “£20”.
This section applies in cases where, in accordance with section 28(2)(a) of that Act (duty becomes due when aircraft first takes off on passenger’s flight), duty becomes due on or after 1st November 1997.
A gaming licence shall not be required under section 13 of the Betting and Gaming Duties Act 1981 (gaming licence duty) for any gaming on or after 1st October 1997; but a duty of excise (to be known as “gaming duty”) shall be charged in accordance with section 11 below on any premises in the United Kingdom where gaming to which this section applies (“dutiable gaming”) takes place on or after that date.
Subject to subsections (3) and (4) below, this section applies to gaming by way of any of the following games, that is to say, baccarat, punto banco, big six, blackjack, boule, casino stud poker, chemin de fer, chuck-a-luck, craps, crown and anchor, faro, faro bank, hazard, poker dice, pontoon, French roulette, American roulette, super pan 9, trente et quarante, vingt-et-un, and wheel of fortune.
This section does not apply to any lawful gaming which is gaming to which any of the following provisions applies and takes place in accordance with the requirements of that provision, that is to say—
section 2(2) of the Gaming Act 1968 or Article 55(2) of the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985 (private parties);
section 6 of that Act (premises licensed for the sale of liquor);
section 34 of that Act or Article 108 of that Order (certain gaming machines);
section 41 of that Act or Article 126 of that Order (gaming at entertainments not held for private gain);
section 15 or 16 of the Lotteries and Amusements Act 1976 or Article 153 or 154 of that Order (amusements with prizes).
This section does not apply to any gaming which takes place on premises in respect of which a club or miners' welfare institute is for the time being registered under Part II of the Gaming Act 1968.
The Treasury may by order made by statutory instrument add to the games mentioned in subsection (2) above if it appears to them, having regard to the character of the game and the circumstances in which it is played, that it is appropriate to do so.
Any reference in this section, or in an order under subsection (5) above, to a particular game shall be taken to include a reference to any game (by whatever name called) which is essentially similar to that game.
Gaming duty shall be charged on premises for every accounting period which contains a time when dutiable gaming takes place on those premises.
Subject to subsection (3) below, the amount of gaming duty which is charged on any premises for any accounting period shall be calculated, in accordance with the following Table, by—
applying the rates specified in that Table to the parts so specified of the gross gaming yield in that period from the premises; and
aggregating the results. Part of gross gaming yield Rate The first £450,000 2½ per cent. The next £2,250,000 12½ per cent. The next £2,700,000 25 per cent. The remainder 33⅓ per cent.
Where, in an accounting period, unregistered gaming takes place on any premises, the amount of gaming duty which is charged on those premises for that period shall be equal to 33⅓ per cent. of the gross gaming yield in that period from the premises.
For the purposes of subsection (3) above, unregistered gaming takes place on premises in an accounting period if—
dutiable gaming takes place on those premises at any time in that period, and
at that time those premises are not specified in the entry on the gaming duty register for a person by whom at that time they are notifiable for the purposes of paragraph 6 of Schedule 1 to this Act.
The Commissioners may by regulations—
provide for the cases in which dutiable gaming is to be treated as taking place on any premises for part only of an accounting period; and
in relation to such cases, provide for the parts of the gross gaming yield specified in the first column of the Table in subsection (2) above to be reduced in relation to those premises for that accounting period in such manner as may be determined in accordance with the regulations.
Where the Commissioners are satisfied— the Commissioners may direct that for the purposes of gaming duty the different premises are to be treated as different parts of the same premises.
that dutiable gaming is, has been or may be taking place in the course of any accounting period at different premises situated at the same location or in very close proximity to each other, and
that the activities carried on at those premises are connected or form part of the same business or are, or are comprised in, connected businesses,
Sections 14 to 16 of the Finance Act 1994 (review and appeals) shall have effect in relation to any decision of the Commissioners to make or vary a direction under subsection (6) above as if that decision were a decision of a description specified in Schedule 5 to that Act.
For the purposes of this section the gross gaming yield from any premises in any accounting period shall consist of the aggregate of—
the gaming receipts for that period from those premises; and
where a provider of the premises (or a person acting on his behalf) is banker in relation to any dutiable gaming taking place on those premises in that period, the banker’s profits for that period from that gaming.
For the purposes of subsection (8) above the gaming receipts for an accounting period from any premises are the receipts in that period from charges made in connection with any dutiable gaming which has taken place on the premises other than—
so much of any charge as represents value added tax, and
any charge the payment of which confers no more than an entitlement to admission to the premises.
In subsection (8) above the reference to the banker’s profits from any gaming is a reference to the amount (if any) by which the value specified in paragraph (a) below exceeds the value specified in paragraph (b) below, that is to say—
the value, in money or money’s worth, of the stakes staked with the banker in any such gaming; and
the value, in money or money’s worth, of the winnings paid by the banker to those taking part in such gaming otherwise than on behalf of a provider of the premises.
The Treasury may by order made by statutory instrument amend subsections (8) to (10) above.
The liability to pay the gaming duty charged on any premises for any accounting period shall fall jointly and severally on—
every person who is a provider of the premises at a time in that period when dutiable gaming takes place there;
every person concerned in the organisation or management of any dutiable gaming taking place on those premises in that period;
where any of the persons mentioned in paragraphs (a) and (b) above is a body corporate that is treated as a member of a group for the purposes of Part I of Schedule 1 to this Act, every body corporate that is treated as a member of that group for those purposes; and
where any of the persons mentioned in paragraphs (a) to (c) above is a body corporate, every director of that body.
A person shall for the purposes of this section be conclusively presumed to be a provider of premises at any time if at that time—
he is registered on the gaming duty register, and
those premises are specified in his entry on that register.
The Commissioners may by regulations make provision—
for apportioning the liability for any gaming duty charged on any premises for an accounting period between different persons; and
for the amount of gaming duty charged on any premises for the different parts of a period for which an apportionment falls to be made to be computed (in accordance with regulations made by virtue of section 11(5)(b) above) as if each part of the period were the only part of the period during which dutiable gaming has taken place on those premises.
The Commissioners may by regulations impose obligations on any of the persons mentioned in subsection (1) above requiring them to make payments on account of any gaming duty that is likely to be chargeable on any premises.
Any failure by any person to pay any amount of gaming duty due from him—
shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties) which shall be calculated by reference to the amount that has not been paid; and
shall also attract daily penalties.
Where, in accordance with any regulations under subsection (4) above, any amount has become payable on account of gaming duty by any person, that amount shall be deemed— and an amount paid on account of gaming duty shall be deemed for the purposes of section 137A of the Customs and Excise Management Act 1979 (recovery of overpaid duty) to be an amount paid by way of that duty.
for the purposes of section 12 of the Finance Act 1994 (assessments to excise duty), to be an amount which has become due from that person in respect of gaming duty;
for the purposes of section 116 of the Customs and Excise Management Act 1979 (time and place etc. for payment of excise duty), to be an amount of gaming duty that has become payable; and
for the purposes of subsection (5) above, sections 51 and 52 below and section 137(1) of the Customs and Excise Management Act 1979 (recovery of duty), to be an amount of gaming duty due from that person;
Schedule 1 to this Act (which makes supplemental provision with respect to gaming duty) shall have effect.
Schedule 2 to this Act (which amends the Customs and Excise Management Act 1979 and contains other amendments) shall have effect.
Any power conferred on the Commissioners by section 11 or 12 above or Schedule 1 to this Act to make regulations—
shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons; and
shall include power to make different provision for different cases.
A statutory instrument containing an order under section 10(5) or 11(11) above—
shall be laid before the House of Commons after being made; and
shall cease to have effect (without prejudice to anything previously done under the order or to the making of a new order) at the end of the period of 28 days after the day on which it was made unless it has been approved, before the end of that period, by a resolution of that House.
In reckoning the period of 28 days mentioned in subsection (2)(b) above, no account shall be taken of any time during which Parliament is dissolved or prorogued or during which the House of Commons is adjourned for more than four days.
This section shall have effect for the purposes of construing the gaming duty provisions of this Act, that is to say, sections 10 to 14 above, this section and Schedule 1 to this Act.
The gaming duty provisions of this Act shall be construed as one with the Customs and Excise Management Act 1979.
In the gaming duty provisions of this Act—
“accounting period” means, subject to the provisions of Schedule 1 to this Act, a period of six months beginning with 1st April or 1st October;
“dutiable gaming” means gaming to which section 10 above applies;
“gaming” means gaming within the meaning of the Gaming Act 1968 or the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985;
“the gaming duty register” means the register maintained under paragraph 1 of Schedule 1 to this Act;
“premises” includes any place and any means of transport and shall be construed subject to section 11(6) above;
For the avoidance of doubt it is hereby declared that the imposition or payment of gaming duty does not make lawful any gaming which is otherwise unlawful.
In Schedule 1 to the Vehicle Excise and Registration Act 1994 (annual rates of duty), in paragraph 1(2) (the general rate), for “£140” there shall be substituted “£145”.
This section applies in relation to licences taken out after 26th November 1996.
This paragraph shall have effect as if a person were in receipt of a disability living allowance by virtue of entitlement to the mobility component at the higher rate in any case where—
Schedule 3 to this Act (which contains provisions applying to exempt vehicles) shall have effect.
After section 19A of the Vehicle Excise and Registration Act 1994 there shall be inserted the following section—
In subsection (1)(a) of section 35A of that Act (dishonoured cheques)—
after “19A(2)(b)” there shall be inserted “or 19B(2)(c)”; and
after “19A(3)(d)” there shall be inserted “or 19B(3)(d)”.
The regulations may make provision with respect to any case where—
In sub-paragraph (2) of that paragraph, for “an authorised person, or a person acting under the direction of an authorised person” there shall be substituted “the authorised person, or a person acting under his direction”.
In sub-paragraph (6) of that paragraph, for “when the immobilisation device was fixed” there shall be substituted “when the vehicle was removed”.
This section shall come into force on such day as the Secretary of State may by order made by statutory instrument appoint.
For section 51 of the Finance Act 1994 (rate of tax) there shall be substituted—
In section 73(1) of the Finance Act 1994 (general interpretation) there shall be inserted at the appropriate places— .
After section 51 of the Finance Act 1994 (rate of tax) there shall be inserted—
In section 74 of the Finance Act 1994 (regulations and orders)—
in subsection (4) (order under section 71 to be subject to affirmative procedure) after “An order under section” there shall be inserted “51A or”; and
in subsection (6) (regulations or orders, other than an order under section 71, to be subject to negative procedure) after “(other than an order under section” there shall be inserted “51A or”.
After Schedule 6 to the Finance Act 1994 there shall be inserted the Schedule set out in Schedule 4 to this Act.
For section 69 of the Finance Act 1994 (reduced chargeable amount) there shall be substituted—
Accordingly, in section 50 of the Finance Act 1994 (chargeable amount) in subsection (3) (which provides that subsection (2) has effect subject to section 69) for “Subsection (2)” there shall be substituted “Subsections (1) and (2)”.
Except as provided by subsection (2) below, sections 21 to 23 above have effect in relation to a premium which falls to be regarded for the purposes of Part III of the Finance Act 1994 as received under a taxable insurance contract by an insurer on or after 1st April 1997.
Sections 21 to 23 above do not have effect in relation to a premium if the premium—
is in respect of a contract made before 1st April 1997; and
falls, by virtue of regulations under section 68 of the Finance Act 1994 (special accounting scheme), to be regarded for the purposes of Part III of that Act as received under the contract by the insurer on a date before 1st August 1997.
Subsection (2) above does not apply in relation to a premium if the premium—
is an additional premium under the contract;
falls as mentioned in subsection (2)(b) above to be regarded as received under the contract by the insurer on or after 1st April 1997; and
is in respect of a risk which was not covered by the contract before 1st April 1997.
Without prejudice to the generality of subsections (1) to (3) above, those subsections shall be construed in accordance with sections 67A to 67C of the Finance Act 1994 (which are inserted by section 29 below).
After section 52 of the Finance Act 1994 there shall be inserted—
The amendment made by subsection (1) above has effect in relation to payments in respect of fees charged on or after the day on which this Act is passed.
After section 53 of the Finance Act 1994 (registration of insurers) there shall be inserted—
The Finance Act 1994 shall be amended in accordance with the following provisions of this section.
In section 53A (information required to keep register up to date) in subsection (1)(b), after the words “register kept under section 53” there shall be inserted “or 53AA”.
In section 55 (credit)—
after “insurer”, wherever occurring other than in subsection (2), there shall be inserted “or taxable intermediary”;
in subsection (1), after “premium” there shall be inserted “or taxable intermediary’s fee (as the case may be)”;
in subsection (3)(f), after “registrable” there shall be inserted “(whether under section 53 or section 53AA)”;
in subsection (5), after “insurer's” there shall be inserted “or taxable intermediary's”; and
in subsection (8)(a), after “premium” there shall be inserted “or taxable intermediary’s fee”.
In section 57 (tax representatives)—
after “insurer”, wherever occurring, there shall be inserted “or taxable intermediary”;
after “insurer's”, wherever occurring, there shall be inserted “or taxable intermediary's”; and
in subsection (1)(a), after “registered under section 53” there shall be inserted “or, as the case may be, section 53AA”.
In section 58 (rights and duties of tax representatives)—
after “insurer”, wherever occurring, there shall be inserted “or taxable intermediary”; and
after “insurer's”, wherever occurring, there shall be inserted “or taxable intermediary's”.
In section 59 (review of Commissioners' decisions) in subsection (1) (which specifies the kinds of decision to which the section applies) after paragraph (b) there shall be inserted—.
In section 62 (partnership, bankruptcy, transfer of business etc) in subsections (1) and (5), after “insurer”, wherever occurring, there shall be inserted “or taxable intermediary”.
In section 63(1) (which details the functions of representative members of groups of companies)—
after paragraph (a) there shall be inserted—; and
after paragraph (b) there shall be inserted—.
In section 73 (interpretation) in subsection (1) there shall be inserted at the appropriate places—
At the beginning of subsection (3) of that section (meaning of “registrable person”) there shall be inserted “Subject to subsection (3A) below,” and after that subsection there shall be inserted—
In Schedule 7, in paragraph 14 (penalty for failing to register under section 53)—
in sub-paragraph (1), after “section 53(2)” there shall be inserted “or 53AA(3)”; and
in sub-paragraph (2)(a), after “section 53” there shall be inserted “or, as the case may be, section 53AA”.
In section 72 of the Finance Act 1994 (interpretation: premium) after subsection (1) there shall be inserted—
The amendment made by subsection (1) above has effect in relation to payments received in respect of amounts charged on or after 1st April 1997.
After section 67 of the Finance Act 1994 there shall be inserted—
In the application of sections 67A to 67C of the Finance Act 1994 in relation to the increases in insurance premium tax effected by this Part and the exceptions from those increases—
the announcement relating to those increases, as described in section 67A(1), and to those exceptions, as described in section 67B(1), shall be taken to have been made on 26th November 1996;
“the date of the change” is 1st April 1997; and
“the concessionary date” is 1st August 1997.
The amendment made by subsection (1) above has effect on and after 26th November 1996.
After subsection (7) of section 72 of the Finance Act 1994 (insurance premiums to be treated as received by the insurer when received by another person on his behalf) there shall be inserted—
After subsection (8) of that section there shall be inserted—
This section applies in relation to amounts deducted on or after the day on which this Act is passed.
In Schedule 1 to the Value Added Tax Act 1994 (registration in respect of taxable supplies), after paragraph 1 there shall be inserted the following paragraph—
In sub-paragraph (2) of paragraph 2 of that Schedule (power of Commissioners to make direction for aggregation of businesses)— and, accordingly, in sub-paragraph (4) of that paragraph (power of Commissioners to make supplementary direction) the word “properly” shall be omitted.
in paragraph (b), the words from “which should properly” to “described in the direction” shall be omitted;
in paragraph (c), for “that business” there shall be substituted “the business described in the direction”; and
paragraph (d) (Commissioners to be satisfied before making direction for aggregation that avoidance is one of the main reasons for division) shall be omitted;
In section 84(7) of that Act (determination of appeals against directions), for the words from “as to the matters” onwards there shall be substituted “that there were grounds for making the direction.”
This section has effect in relation to the making of directions on or after the day on which this Act is passed.
A supply is within this sub-paragraph if—
Item 1 shall apply only if—
This section has effect in relation to supplies made on or after 26th November 1996.
Subject to Note (5B), a charitable institution shall not be regarded as providing care or medical or surgical treatment for handicapped persons unless— “Relevant establishment” means—
Subject to Note (5B), items 4 to 7 do not apply where the eligible body falls within Note (4)(f) unless the relevant goods are or are to be used in a relevant establishment in which that body provides care or medical or surgical treatment to persons the majority of whom are handicapped. Nothing in Note (4A) or (5A) shall prevent a supply from falling within items 4 to 7 where—
This section has effect in relation to supplies made on or after 26th November 1996.
Section 96 of the Value Added Tax Act 1994 (interpretation) shall have effect, and be deemed always to have had effect, with the following subsection inserted after subsection (10), namely—
Where— that paragraph shall have effect, in relation to any supplies to which the grant gives rise which are treated for the purposes of this Act as taking place after that time, as if the grant had been made after that time. Accordingly, the references in paragraph 2(9) above and sub-paragraph (9) below to grants being exempt or taxable shall be construed as references to supplies to which a grant gives rise being exempt or, as the case may be, taxable.
Amendments corresponding to those made by subsections (1) and (2) above shall be deemed to have had effect, for the purposes of the cases to which it applied, in relation to the Value Added Tax Act 1983; and any provisions about the coming into force of any amendment of that Act shall be deemed to have had effect accordingly.
Nothing in this section shall be taken to affect the operation, in relation to times before its repeal took effect, of paragraph 4 of Schedule 10 to the Value Added Tax Act 1994 or of any enactment re-enacted in that paragraph.
Subject to the following provisions of this paragraph, where— then, notwithstanding sub-paragraph (2)(a) above, that supply shall be treated as so excluded if the conditions in sub-paragraph (2B) below are satisfied. The conditions mentioned in sub-paragraph (2A) above are—
This section has effect in relation to supplies made on or after the day on which this Act is passed.
Paragraphs 2(3A) and 3(8A) of Schedule 10 to the Value Added Tax Act 1994 (which relate to grants of land made to connected persons where they are not fully taxable) shall not have effect in relation to any supply made after 26th November 1996.
Where an election has been made under this paragraph in relation to any land, a supply shall not be taken by virtue of that election to be a taxable supply if—
After paragraph 3 of that Schedule (construction of paragraph 2) there shall be inserted the following paragraph—
Subsections (2) and (3) above have effect in relation to any supply made on or after the day on which this Act is passed, other than a supply arising from a relevant pre-commencement grant.
Subject to subsection (6) below, a grant is a relevant pre-commencement grant for the purposes of this section if it is either—
a grant made before 26th November 1996; or
a grant made on or after that date and before 30th November 1999 in pursuance of an agreement in writing entered into before 26th November 1996.
For the purposes of this section a grant is not a relevant pre-commencement grant by virtue of paragraph (b) of subsection (5) above unless the terms on which the grant has been made are terms which, as terms for which provision was made by the agreement mentioned in that paragraph, were fixed before 26th November 1996.
In Schedule 9 to the Value Added Tax Act 1994 (exemptions), for Group 2 (insurance) there shall be substituted the following Group—
This section has effect in relation to supplies made on or after the day on which this Act is passed.
In section 36 of the Value Added Tax Act 1994, paragraph (b) of subsection (4) (condition of bad debt relief that property in goods supplied has passed) shall not apply in the case of any claim made under that section in relation to a supply of goods made after the day on which this Act is passed.
After that subsection there shall be inserted the following subsection—
Subsection (2) above has effect in relation to any entitlement under section 36 of that Act of 1994 to a refund of VAT charged on a supply made after 26th November 1996.
In subsection (5) of that section (regulations), after paragraph (e) there shall be inserted the following paragraph—.
No claim for a refund may be made in accordance with section 22 of the Value Added Tax Act 1983 (old scheme for bad debt relief) at any time after the day on which this Act is passed.
In section 43 of the Value Added Tax Act 1994 (groups of companies), after subsection (1) there shall be inserted the following subsections—
In subsection (2) of that section (self supplies), at the end there shall be inserted “and may provide for that purpose that the representative member is to be treated as a person of such description as may be determined under the order.”
Subsection (1) above has effect in relation to any supply made after 26th November 1996 and in relation to any acquisition or importation taking place after that date.
In section 43 of the Value Added Tax Act 1994 (groups of companies), after subsection (2) there shall be inserted the following subsections—
Subject to subsection (3) below, subsection (1) above has effect in relation to supplies made on or after 26th November 1996.
Section 43 of the Value Added Tax Act 1994 shall have effect in relation to supplies made after the day on which this Act is passed with the provisions inserted by subsection (1) above modified in accordance with subsections (4) and (5) below.
In subsection (2A), in paragraph (c) for the words from “services” to the end of the paragraph there shall be substituted “any services falling within paragraphs 1 to 8 of Schedule 5 which do not fall within any of the descriptions specified in Schedule 9;”.
In subsection (2C), at the beginning there shall be inserted “Except in so far as the Commissioners may by regulations otherwise provide,”.
In section 8 of the Value Added Tax Act 1994 (reverse charge on supplies falling within Schedule 5), after subsection (6) there shall be inserted the following subsections—
In section 28 of the Value Added Tax Act 1994 (payments on account), after subsection (2) there shall be inserted the following subsection—
Section 78 of the Value Added Tax Act 1994 (interest) shall have effect, and be deemed always to have had effect, with the insertion of the following subsection after subsection (1)—
That section shall have effect in relation to any claim made on or after 18th July 1996, and shall be deemed always to have had effect in relation to such a claim, with the substitution of the following subsection for subsection (11)—
That section shall have effect, and be deemed always to have had effect, with the substitution of the following paragraph for paragraph (a) of subsection (12)—.
For subsections (8) and (9) of that section (periods in respect of which the Commissioners are not liable to interest) there shall be substituted the following subsections—
Subsection (4) above shall have effect for the purposes of determining whether any period beginning on or after the day on which this Act is passed is left out of account.
Amendments corresponding to those made by subsections (1) and (3) above shall be deemed to have had effect, for the purposes of the cases to which the enactments applied, in relation to the enactments directly or indirectly re-enacted in section 78 of the Value Added Tax Act 1994.
After section 78 of the Value Added Tax Act 1994 there shall be inserted the following section—
In section 83 of that Act (matters subject to appeal), after paragraph (s) there shall be inserted the following paragraph—.
In section 84 of that Act (further provisions as to appeals), after subsection (3) there shall be inserted the following subsection—
Subsection (1) above shall be deemed to have come into force on 4th December 1996 in relation to amounts paid by way of interest at any time on or after 18th July 1996.
Subsections (2) and (3) above shall be deemed to have come into force on 4th December 1996 in relation to assessments made on or after that date.
Section 76(10) of the Value Added Tax Act 1994 (notification to representative of person who made acquisition) shall have effect, and be deemed always to have had effect, as if for “the person who made the acquisition in question” there were substituted “another”.
In section 80 of the Value Added Tax Act 1994, after subsection (3) (defence of unjust enrichment to claim for repayment of an overpayment) there shall be inserted the following subsections—
After section 80 of that Act there shall be inserted the following sections—
In section 83 of that Act (matters subject to appeal), after paragraph (t) there shall be inserted the following paragraph—.
Subsection (1) above has effect for the purposes of making any repayment on or after the day on which this Act is passed, even if the claim for that repayment was made before that day.
For subsections (4) and (5) of section 80 of the Value Added Tax Act 1994 (time limit for making claim for a repayment of an overpayment) there shall be substituted the following subsection—
Subject to subsections (3) and (4) below, subsection (1) above shall be deemed to have come into force on 18th July 1996 as a provision applying, for the purposes of the making of any repayment on or after that date, to all claims under section 80 of the Value Added Tax Act 1994, including claims made before that date and claims relating to payments made before that date.
Subsection (4) below applies as respects the making of any repayment on or after 18th July 1996 on a claim under section 80 of the Value Added Tax Act 1994 if—
legal proceedings for questioning any decision (“the disputed decision”) of the Commissioners, or of an officer of the Commissioners, were brought by any person at any time before that date,
a determination has been or is made in those proceedings that the disputed decision was wrong or should be set aside,
the claim is one made by that person at a time after the proceedings were brought (whether before or after the making of the determination), and
the claim relates to—
an amount paid by that person to the Commissioners on the basis of the disputed decision, or
an amount paid by that person to the Commissioners before the relevant date (including an amount paid before the making of the disputed decision) on grounds which, in all material respects, correspond to those on which that decision was made.
Where this subsection applies in the case of any claim—
subsection (4) of section 80 of the Value Added Tax Act 1994 (as inserted by this section) shall not apply, and shall be taken never to have applied, in relation to so much of that claim as relates to an amount falling within subsection (3)(d)(i) or (ii) above, but
the Commissioners shall not be liable on that claim, and shall be taken never to have been liable on that claim, to repay any amount so falling which was paid to them more than three years before the proceedings mentioned in subsection (3)(a) above were brought.
In subsection (3)(d) above—
the reference to the relevant date is a reference to whichever is the earlier of 18th July 1996 and the date of the making of the determination in question; and
the reference to an amount paid on the basis of a decision, or on any grounds, includes an amount so paid on terms (however expressed) which questioned the correctness of the decision or, as the case may be, of those grounds.
After the subsection (4) inserted in section 80 of the Value Added Tax Act 1994 by this section there shall be inserted the following subsections—
In section 83 of that Act (matters subject to appeal), in paragraph (t), after “80” there shall be inserted “, an assessment under subsection (4A) of that section or the amount of such an assessment”.
Nothing contained in— shall be taken, in relation to any time on or after 18th July 1996, to have conferred an entitlement on any person to receive, by way of repayment, any amount to which he would not have had any entitlement on a claim under section 80 of that Act.
any regulations under section 25(1) of, or paragraph 2 of Schedule 11 to, that Act relating to the correction of errors or the making of adjustments, or
any requirement imposed under any such regulations,
Subsections (6) to (8) above shall be deemed to have come into force on 4th December 1996.
Section 77 of the Value Added Tax Act 1994 (time limits etc. for assessments) shall have effect, and be deemed in relation to any assessment made on or after 18th July 1996 to have had effect, with the substitution in subsections (1) and (4), for the words “6 years”, wherever they occur, of the words “3 years”.
In this section—
“the Commissioners” means the Commissioners of Customs and Excise; and
“legal proceedings” means any proceedings before a court or tribunal.
Without prejudice to the generality of paragraph 1(2) of Schedule 13 to the Value Added Tax Act 1994 (transitional provisions), the references in this section, and in subsection (4) of section 80 of that Act (as inserted by this section), to a claim under that section include references to a claim first made under section 24 of the Finance Act 1989 (which was re-enacted in section 80).
In section 81 of the Value Added Tax Act 1994 (which makes provision for the set-off of credits and debits), after subsection (3) there shall be inserted the following subsection—
Subsection (1) above shall be deemed to have come into force on 18th July 1996 as a provision applying for determining the amount of any payment or repayment by the Commissioners on or after that date, including a payment or repayment in respect of a liability arising before that date.
Where— the Commissioners may, to the best of their judgement, assess the amount of the continuing liability of the taxpayer and notify it to him.
at any time before 4th December 1996, any person (“the taxpayer”) became liable to pay any sum (“the relevant sum”) to the Commissioners by way of VAT, penalty, interest or surcharge,
at any time on or after 18th July 1996 and before 4th December 1996 an amount was set against the whole or any part of the relevant sum,
the amount set against that sum was an amount which is treated under section 47 above as not having been due from the Commissioners at the time when it was set against that sum, and
as a consequence, the taxpayer’s liability to pay the whole or a part of the relevant sum falls to be treated as not having been discharged in accordance with section 81(3) of the 1994 Act,
In subsection (1) above the reference to the continuing liability of the taxpayer is a reference to so much of the liability to pay the relevant sum as—
would have been discharged if the amount mentioned in subsection (1)(b) above had been required to be set against the relevant sum in accordance with section 81(3) of the 1994 Act, but
falls, by virtue of section 47 above, to be treated as not having been discharged in accordance with section 81(3) of that Act.
The taxpayer’s only liabilities under the 1994 Act in respect of his failure, on or after the time mentioned in subsection (1)(b) above, to pay an amount assessable under this section shall be—
his liability to be assessed for that amount under this section; and
liabilities arising under the following provisions of this section.
Subsections (2) to (8) of section 78A of the 1994 Act apply in the case of an assessment under subsection (1) above as they apply in the case of an assessment under section 78A(1) of that Act.
The 1994 Act shall have effect as if the matters specified in section 83 of that Act (matters subject to appeal) included an assessment under this section and the amount of such an assessment.
Nothing contained in— shall be taken, in relation to any time on or after 18th July 1996, to have conferred on any person any entitlement, otherwise than in accordance with section 81(3) of that Act, to set any amount, as an amount due from the Commissioners, against any sum which that person was liable to pay to the Commissioners by way of VAT, penalty, interest or surcharge.
any regulations under section 25(1) of, or paragraph 2 of Schedule 11 to, the 1994 Act relating to the correction of errors or the making of adjustments, or
any requirement imposed under any such regulations,
In this section—
This section shall be deemed to have come into force on 4th December 1996.
Where at any time on or after 4th December 1996 and before the day on which this Act is passed any assessment corresponding to an assessment under this section was made under a resolution of the House of Commons having effect in accordance with the provisions of the Provisional Collection of Taxes Act 1968, this section has effect, on and after the day on which this Act is passed, as if that assessment were an assessment under this section and as if any appeal brought under that resolution had been brought under this section.
Schedule 5 to this Act (which makes provision in relation to excise duties, insurance premium tax and landfill tax which corresponds to that made for VAT by sections 44 to 48 above) shall have effect.
Schedule 6 to this Act (which makes further provision for the assessment of amounts payable under enactments relating to excise duty) shall also have effect.
The Commissioners may by regulations make provision—
for authorising distress to be levied on the goods and chattels of any person refusing or neglecting to pay—
any amount of relevant tax due from him, or
any amount recoverable as if it were relevant tax due from him;
for the disposal of any goods or chattels on which distress is levied in pursuance of the regulations; and
for the imposition and recovery of costs, charges, expenses and fees in connection with anything done under the regulations.
The provision that may be contained in regulations under this section shall include, in particular—
provision for the levying of distress, by any person authorised to do so under the regulations, on goods or chattels located at any place whatever (including on a public highway); and
provision authorising distress to be levied at any such time of the day or night, and on any such day of the week, as may be specified or described in the regulations.
Regulations under this section may— and the transitional provision that may be contained in regulations under this section shall include transitional provision in connection with the coming into force of the repeal by this Act of any other power by regulations to make provision for or in connection with the levying of distress.
make different provision for different cases, and
contain any such incidental, supplemental, consequential or transitional provision as the Commissioners think fit;
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.
The following are relevant taxes for the purposes of this section, that is to say—
any duty of customs or excise, other than vehicle excise duty;
value added tax;
insurance premium tax;
landfill tax;
any agricultural levy of the European Community.
In this section “the Commissioners” means the Commissioners of Customs and Excise.
Regulations made under this section shall not have effect in Scotland.
Where any amount of relevant tax or any amount recoverable as if it were relevant tax is due and has not been paid, the sheriff, on an application by the Commissioners accompanied by a certificate by them— shall grant a summary warrant in a form prescribed by Act of Sederunt authorising the recovery, by any of the diligences mentioned in subsection (2) below, of the amount remaining due and unpaid.
stating that none of the persons specified in the application has paid the amount due from him;
stating that payment of the amount due from each such person has been demanded from him; and
specifying the amount due from and unpaid by each such person,
The diligences referred to in subsection (1) above are—
a poinding and sale in accordance with Schedule 5 to the Debtors (Scotland) Act 1987;
an earnings arrestment;
an arrestment and action of furthcoming or sale.
Subject to subsection (4) below and without prejudice to paragraphs 25 to 34 of Schedule 5 to the Debtors (Scotland) Act 1987 (expenses of poinding and sale) the sheriff officer’s fees, together with the outlays necessarily incurred by him, in connection with the execution of a summary warrant shall be chargeable against the debtor.
No fees shall be chargeable by the sheriff officer against the debtor for collecting, and accounting to the Commissioners for, sums paid to him by the debtor in respect of the amount owing.
The following are relevant taxes for the purposes of this section, that is to say—
any duty of customs or excise, other than vehicle excise duty;
value added tax;
insurance premium tax;
landfill tax;
any agricultural levy of the European Community.
In this section “the Commissioners” means the Commissioners of Customs and Excise.
This section shall come into force on such day as the Commissioners of Customs and Excise may by order made by statutory instrument appoint, and different days may be appointed under this subsection for different purposes.
This section extends only to Scotland.
In section 117 of the Customs and Excise Management Act 1979 (execution and distress against revenue traders), after subsection (4) there shall be inserted the following subsection—
In section 11(1)(a) of the Finance Act 1994 (walking possession agreements in connection with enforcement of excise duty)—
for the words from “by virtue of” to “1981” there shall be substituted “in accordance with regulations under section 51 of the Finance Act 1997 (enforcement by distress)”; and
after “default’)” there shall be inserted “who has refused or neglected to pay any amount of relevant duty or any amount recoverable as if it were an amount of relevant duty due from him”.
In section 13(6) of the Finance Act 1994 (assessment for penalties), for the words “duty of excise”, in each place where they occur, there shall be substituted “relevant duty”.
In section 18(8) of the Finance Act 1994 (saving relating to section 18(1), (2) and (4)), for “, (2) and (4)” there shall be substituted “and (2)”.
In paragraph 19(1)(a) of Schedule 7 to the Finance Act 1994 (walking possession agreements in connection with enforcement of insurance premium tax), for “paragraph 7(7) above” there shall be substituted “section 51 of the Finance Act 1997 (enforcement by distress)”.
In section 48 of the Value Added Tax Act 1994 (VAT representatives), after subsection (7) there shall be inserted the following subsection—
In section 68(1)(a) of the Value Added Tax Act 1994 (walking possession agreements), for “paragraph 5(4) of Schedule 11” there shall be substituted “section 51 of the Finance Act 1997 (enforcement by distress)”.
In paragraph 24(1)(a) of Schedule 5 to the Finance Act 1996 (walking possession agreements in connection with the enforcement of landfill tax), for “paragraph 13(1) above” there shall be substituted “section 51 of the Finance Act 1997 (enforcement by distress)”.
This section shall come into force on such day as the Commissioners of Customs and Excise may by order made by statutory instrument appoint, and different days may be appointed under this subsection for different purposes.
Income tax shall be charged for the year 1997-98, and for that year—
the lower rate shall be 20 per cent.;
the basic rate shall be 23 per cent.; and
the higher rate shall be 40 per cent.
For the year 1997-98 section 1(2) of the Taxes Act 1988 shall apply as if the amount specified in paragraph (aa) (the lower rate limit) were £4,100; and, accordingly, section 1(4) of that Act (indexation) shall apply for the year 1997-98 in relation only to the amount specified in section 1(2)(b) of that Act (the basic rate limit).
In section 686(1A) of the Taxes Act 1988 (meaning of “the rate applicable to trusts”), for the words “for any year of assessment shall be the rate equal to the sum of the basic rate and the additional rate in force for that year” there shall be substituted “, in relation to any year of assessment for which income tax is charged, shall be 34 per cent. or such other rate as Parliament may determine”.
Subsection (3) above has effect in relation to the year 1997-98 and subsequent years of assessment.
Section 559(4) of the Taxes Act 1988 (deductions from payments to sub-contractors in the construction industry) shall have effect—
in relation to payments made on or after 1st July 1997 and before the appointed day (within the meaning of section 139 of the Finance Act 1995), with “23 per cent.” substituted for “24 per cent.”; and
in relation to payments made on or after that appointed day, as if the substitution for which section 139(1) of the Finance Act 1995 provided were a substitution of “the relevant percentage” for “23 per cent.”
For the year 1997-98 the amounts specified in the provisions mentioned in subsection (2) below shall be taken to be as set out in that subsection; and, accordingly, section 257C(1) of the Taxes Act 1988 (indexation), so far as it relates to the amounts so specified, shall not apply for the year 1997-98.
In section 257 of that Act (personal allowance)—
the amount in subsection (1) (basic allowance) shall be £4,045;
the amount in subsection (2) (allowance for persons aged 65 or more but not aged 75 or more) shall be £5,220; and
the amount in subsection (3) (allowance for persons aged 75 or more) shall be £5,400.
In subsection (1) of section 265 of the Taxes Act 1988 (blind person’s allowance), for “£1,250” there shall be substituted “£1,280”.
After that subsection there shall be inserted the following subsection—
Subsection (1) above shall apply for the year 1997-98 and, subject to subsection (2) above, for subsequent years of assessment.
For the year 1997-98 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.
Corporation tax shall be charged for the financial year 1997 at the rate of 33 per cent.
For the financial year 1997—
the small companies' rate shall be 23 per cent.; and
the fraction mentioned in section 13(2) of the Taxes Act 1988 (marginal relief for small companies) shall be one fortieth.
Section 120 of the Taxes Act 1988 (payments for wayleaves for electricity cables, telephone lines, etc.) shall be amended as follows.
In subsection (1) (payments charged under Schedule D subject to deduction of tax)—
at the beginning there shall be inserted “Subject to subsection (1A) below,”; and
the words from “and, subject to” onwards (which provide for the deduction of tax) shall be omitted.
After subsection (1) there shall be inserted the following subsection—
Subsections (2) to (4) and, in subsection (5), paragraph (c) and the word “and” immediately preceding it shall cease to have effect.
This section has effect in relation to payments made on or after 6th April 1997.
Chapter III of Part V of the Taxes Act 1988 (profit-related pay) shall have effect as if, in section 171(4) (£4,000 limit on relief for profit period of twelve months), for “£4,000” there were substituted—
in relation to profit-related pay paid by reference to profit periods beginning on or after 1st January 1998 and before 1st January 1999, “£2,000”; and
in relation to profit-related pay paid by reference to profit periods beginning on or after 1st January 1999 and before 1st January 2000, “£1,000”.
That Chapter shall not have effect in relation to any payment made by reference to a profit period beginning on or after 1st January 2000.
Accordingly—
a scheme shall not be registered under that Chapter if the only payments for which it provides are payments by reference to profit periods beginning on or after 1st January 2000; and
registration under that Chapter shall end on 31st December 2000.
For subsection (1) of section 198 of the Taxes Act 1988 (relief for necessary expenses) there shall be substituted the following subsections—
After section 198 of that Act there shall be inserted the following section—
In section 158 of the Taxes Act 1988 (car fuel scales), in subsection (6) at the beginning there shall be inserted “Subject to subsection (7) below,”; and after that subsection there shall be inserted the following subsection—
In subsections (5) and (5A) of section 168 of the Taxes Act 1988 (meaning of business travel), for paragraph (c) there shall be substituted, in each case, the following paragraph—.
This section has effect for the year 1998-99 and subsequent years of assessment.
After section 200A of the Taxes Act 1988 there shall be inserted the following sections—
In section 200A(3)(b) of that Act (definition of a qualifying absence from home), the word “either” before sub-paragraph (i) shall be omitted and, at the end of sub-paragraph (ii), there shall be inserted or
This section applies for the year 1997-98 and subsequent years of assessment.
In section 339 of the Taxes Act 1988 (company donations to charity), after subsection (7) there shall be inserted the following subsections—
This section has effect in relation to donations made in accounting periods beginning on or after 1st April 1997.
Section 617 of the Taxes Act 1988 (social security benefits and contributions) shall be amended as follows.
In subsection (3) (which provides that, subject to subsection (4) and (5), no relief or deduction shall be given in respect of National Insurance contributions) the words “and (5)” shall be omitted in consequence of the repeal of subsection (5) by section 147 of the Finance Act 1996.
For subsection (4) (exception from subsection (3) for secondary Class 1 contributions which are allowable as a deduction in certain computations) there shall be substituted—
Subsection (2) above has effect in relation to the year 1996-97 and subsequent years of assessment.
Subsection (3) above has effect in relation to contributions paid on or after 26th November 1996.
After section 91B of the Taxes Act 1988 there shall be inserted the following section—
In section 115 of the Capital Allowances Act 1990 (certain expenditure on purchased assets treated as expenditure on mineral exploration and access if attributable to previous trader’s expenditure on mineral exploration and access), after subsection (2) there shall be inserted the following subsection—
Subsection (1) above applies to expenditure which—
is incurred on or after 26th November 1996; but
is not incurred before 26th November 1997 in pursuance of a contract entered into before 26th November 1996.
The reference in subsection (3) above to expenditure incurred in pursuance of a contract entered into before 26th November 1996 does not, in the case of a contract varied on or after that date, include a reference to so much of any expenditure of the sort described in section 91C of the Taxes Act 1988 as exceeds the amount of expenditure of that sort that would have been incurred if that contract had not been so varied.
Subsection (2) above applies in relation to claims made on or after 26th November 1996.
In section 437 of the Taxes Act 1988 (extent to which payments in respect of new annuities are to be treated as charges on income), for subsections (1A) and (1B) there shall be substituted the following subsection—
In subsection (1C) of that section (interpretation of section), after “this section” there shall be inserted “(but subject to subsections (1CA) to (1CD) below)”; and after that subsection there shall be inserted the following subsections—
After that section there shall be inserted the following section—
Section 434B(2) of that Act (treatment of annuities paid by an insurance company) shall cease to have effect and accordingly—
in section 76(2A)(b) of that Act (limit on expenses of management of insurance companies), the word “and” shall be inserted at the end of sub-paragraph (ii), and sub-paragraph (iv) (together with the word “and” immediately preceding it) shall be omitted; and
in section 337(2B) of that Act, for “the references in sections 338(2) and 434B(2)” there shall be substituted “the reference in section 338(2)”.
In paragraph 9B of Schedule 19AC to that Act (subsection (3) inserted in section 434B in relation to overseas life insurance companies), for the words from the beginning to “An” there shall be substituted—
In the computation, otherwise than in accordance with the provisions applicable to Case I of Schedule D, of the profits for any accounting period of an insurance company’s life assurance business, an amount equal to the lesser of the following amounts shall be treated (if it is not nil) as a sum disbursed as expenses of management of the company for that period, that is to say—
Subsections (1) and (4) to (6) above have effect in relation to accounting periods beginning after 5th March 1997.
Subsections (2) and (3) above have effect in relation to accounting periods ending on or after 5th March 1997 but do not affect the computation of the capital elements contained in any annuity payments made before that date.
In section 410 of the Taxes Act 1988 (group relief not available in certain cases including those where a person, either alone or with connected persons, controls 75% or more of the voting rights in a company owned by a consortium), in the definition of “connected persons” in subsection (5) after “in accordance with section 839” there shall be inserted “but as if subsection (7) of that section (persons acting together to control a company are connected) were omitted”.
Schedule 7 to this Act (which makes provision for the treatment of distributions arising on the purchase etc. by a company of its own shares and for cases where a distribution has a connection with a transaction in securities) shall have effect.
In subsection (5) of section 236 of the Taxes Act 1988 (meaning of “relevant profits”)—
in paragraph (a), after “franked investment income” there shall be inserted “and foreign income dividends”; and
in paragraph (b), for “and franked investment income” there shall be substituted “, franked investment income and foreign income dividends”.
After subsection (7) of that section there shall be inserted the following subsection—
This section has effect (subject to subsection (4) below) for the purposes of computing the relevant profits (within the meaning of section 236 of the Taxes Act 1988) arising to a company in any period falling wholly or partly after 7th October 1996.
No foreign income dividend paid before 8th October 1996 shall be included or, as the case may be, excluded by virtue of this section from any such profits as are mentioned in subsection (3) above.
Section 242 of the Taxes Act 1988 (set-off of losses against surplus franked investment income) shall have effect, and be deemed always to have had effect, as if at the end of paragraph (c) of subsection (6) (power to carry set-off forward) there were inserted and.
In section 246D(5) of the Taxes Act 1988 (section 233(1) and (1A) of that Act not to apply to FIDs paid to individuals, personal representatives or certain trustees), after “representatives” there shall be inserted “, a foreign income dividend paid to the trustees of a unit trust scheme to which section 469 applies”.
This section has effect in relation to distributions made on or after 26th November 1996.
In section 709 of the Taxes Act 1988 (meaning of “tax advantage” etc. in Chapter I of Part XVII of that Act), after subsection (2) there shall be inserted the following subsection—
This section—
has effect for the purposes of the application of provisions of Chapter I of Part XVII of the Taxes Act 1988 in relation to chargeable periods ending at any time, including times before the passing of this Act, but
without prejudice to the construction of that Chapter apart from this section, does not apply in the case of a tax credit in respect of a distribution made before 8th October 1996.
Schedule 8 to this Act (which amends the provisions in Chapter III of Part VII of the Taxes Act 1988 about the companies which are qualifying companies for the purposes of the enterprise investment scheme and makes related amendments to that Chapter) shall have effect.
Section 842AA of the Taxes Act 1988 (venture capital trusts) shall have effect, and be deemed always to have had effect, with the following subsections inserted after subsection (5)—
Subsection (6) of that section (withdrawal of approval) shall have effect, and be deemed always to have had effect, with the insertion of the following paragraph before the word “or” at the end of paragraph (c)—.
Schedule 9 to this Act (which amends the provisions of Schedule 28B to the Taxes Act 1988 defining “qualifying holdings”) shall have effect.
Schedule 10 to this Act (which makes provision for the treatment for the purposes of income tax, corporation tax and capital gains tax of stock lending arrangements and manufactured payments) shall have effect.
After subsection (2A) of section 731 of the Taxes Act 1988 (disapplication of bond washing rules where buyer has to make manufactured payment) there shall be inserted the following subsections—
This section applies in relation to cases in which the interest becomes payable on or after the day on which this Act is passed.
In section 349(3) of the Taxes Act 1988 (cases where yearly interest may be paid without deduction of tax), after paragraph (b) there shall be inserted the following paragraph—.
This section applies to interest whenever paid (including interest paid before the day on which this Act is passed).
In this section “relevant excepted benefit” means so much of any qualifying payment under a relevant life insurance policy as—
is a sum falling, but for this section, to be treated for the purposes of the Tax Acts as an amount of interest or as an annual payment;
is not a sum paid or falling to be paid by virtue of provisions of that policy which, taken alone, would constitute a different sort of policy; and
does not represent interest for late payment on—
any other part of that qualifying payment, or
the whole or any part of any other qualifying payment under the policy.
For the purposes of subsection (1)(c) above, interest on the whole or any part of a qualifying payment under a policy (“the relevant amount”) is interest for late payment if it is interest for a period beginning on or after the date of the occurrence of the event or contingency as a result of the occurrence of which the relevant amount falls to be paid.
The Tax Acts shall have effect, and be deemed always to have had effect, as if—
a relevant excepted benefit were neither an amount of interest nor an annual payment;
the payments which are relevant capital payments for the purposes of section 541 of the Taxes Act 1988 (computation of gain in the case of life policies) included the payment of a relevant excepted benefit;
on the payment of a relevant excepted benefit there were a surrender— and
except in a case falling within sub-paragraph (ii) below, of a part of the rights conferred by the policy in question; and
in a case where the payment of the benefit (or of that benefit together with any interest falling within subsection (1)(c) above) comprises the whole of the last payment to be made under the policy, of all of the remaining rights so conferred;
the value of the part or rights treated as surrendered on the payment of a relevant excepted benefit were equal to the amount of the payment.
For the purposes of this section a qualifying payment under a relevant life insurance policy is any amount which has been or is to be paid under that policy by the insurer.
In this section “relevant life insurance policy” means any contract of insurance (whenever effected) which—
is of a description applying to contracts the effecting and carrying out of which falls within Class I or III of the classes of long term business specified in Schedule 1 to the Insurance Companies Act 1982; and
is neither—
an annuity contract, nor
a contract effected in the course of a company’s pension business (within the meaning given by section 431B of the Taxes Act 1988 or the corresponding enactment in force when the contract was effected).
In subsection (1)(b) above, the reference to a different sort of policy is a reference to any contract of a description applying to contracts the effecting and carrying out of which falls within any class of business specified in Schedule 1 or 2 to the Insurance Companies Act 1982 other than the Classes I and III specified in Schedule 1.
This section shall be deemed to have had effect, for the purposes of the cases to which the enactments applied, in relation to enactments directly or indirectly re-enacted in the Tax Acts, as it has effect in relation to those Acts.
For the purposes of subsection (7) above the reference in subsection (3)(b) above to section 541 of the Taxes Act 1988 shall be taken to include a reference to any corresponding provision contained in the enactments directly or indirectly re-enacted in the Tax Acts.
After section 127 of the Taxes Act 1988 there shall be inserted the following section—
After Schedule 5 to that Act there shall be inserted, as Schedule 5AA to that Act, the Schedule set out in Schedule 11 to this Act.
In section 128 of that Act (profits arising from commodity and financial futures etc. to be taxed only under the provisions relating to chargeable gains)—
after the word “which”, where it first occurs, there shall be inserted “is not chargeable to tax in accordance with Schedule 5AA and”; and
for “that Schedule” there shall be substituted “Schedule D”.
In section 399 of that Act (withdrawal of loss relief for losses from dealing in futures etc.), after subsection (1) there shall be inserted the following subsection—
In section 469(9) of that Act (sections 686 and 687 disapplied in relation to unauthorised unit trusts), at the end there shall inserted “except as respects income to which section 686 is treated as applying by virtue of paragraph 7 of Schedule 5AA.”
Subject to subsection (7) below, this section and Schedule 11 to this Act shall have effect, and be deemed to have had effect, for chargeable periods ending on or after 5th March 1997 in relation to profits and gains realised, and losses sustained, on or after that date.
In relation to profits and gains realised, and losses sustained, on or after 5th March 1997, paragraph 1(6) and (7) of the Schedule 5AA to the Taxes Act 1988 (rule against double counting) inserted by this section shall be deemed to have had effect for chargeable periods beginning before that date (as well as for those beginning on or after that date).
After section 739(1) of the Taxes Act 1988 (prevention of avoidance of income tax by means of transfer of assets with or without associated operations) there shall be inserted the following subsection—
This section applies irrespective of when the transfer or associated operations took place, but applies only to income arising on or after 26th November 1996.
Schedule 12 to this Act (which makes provision about arrangements such as are treated for certain accounting purposes as finance leases or loans) shall have effect.
Chapter II of Part IV of the Finance Act 1996 (loan relationships) shall be amended as follows.
In subsection (5) of section 90 (changes in accounting methods), before the word “and” at the end of paragraph (a) there shall be inserted the following paragraph—.
that amount shall be computed using for the closing value as at the end of that period or part of a period the amount specified in subsection (6) below.
For subsection (6) of that section (amounts used for computations under subsection (5)) there shall be substituted the following subsection—
Subsections (2) to (4) above apply where the period or part of a period for which the superseded accounting method is or was used is a period ending on or after 14th November 1996.
Schedule 13 to this Act (which contains amendments of the transitional provisions in Schedule 15 to the Finance Act 1996) shall have effect.
Schedule 14 to this Act (which reduces the rate at which expenditure on long-life assets is written down for the purposes of writing-down allowances) shall have effect.
Schedule 15 to this Act (which makes provision in relation to capital allowances for cases where persons have income chargeable to tax under Schedule A or make lettings of furnished holiday accommodation in the United Kingdom) shall have effect.
Schedule 16 to this Act (which makes amendments relating to the provisions of the Capital Allowances Act 1990 about fixtures) shall have effect.
Schedule 17 to this Act (which amends Chapter IA of Part V of the Taxation of Chargeable Gains Act 1992) shall have effect.
The Taxation of Chargeable Gains Act 1992 shall be amended as follows.
In paragraph (a) of subsection (3) of section 132 (meaning of conversion of securities)—
after “includes” there shall be inserted “any of the following, whether effected by a transaction or occurring in consequence of the operation of the terms of any security or of any debenture which is not a security, that is to say”;
after sub-paragraph (i) there shall be inserted the following sub-paragraphs—.
After that subsection there shall be inserted the following subsections—
In section 116(2) (qualifying corporate bonds), after the word “section”, in the first place where it occurs, there shall be inserted “references to a transaction include references to any conversion of securities (whether or not effected by a transaction) within the meaning of section 132 and”.
and any debenture which results from a conversion of securities within the meaning of section 132, or is issued in pursuance of rights attached to such a debenture, shall be deemed for the purposes of this section to be a security (as defined in that section).
This section has effect for the purposes of the application of the Taxation of Chargeable Gains Act 1992 in relation to any disposal on or after 26th November 1996 and shall so have effect, where a conversion took place at a time before that date, as if it had come into force before that time.
After section 138 of the Taxation of Chargeable Gains Act 1992 there shall be inserted the following section—
Subject to subsections (3) to (8) below—
the section 138A inserted by subsection (1) above shall be deemed always to have been a section of the Taxation of Chargeable Gains Act 1992; and
the enactments applying to chargeable periods beginning before 6th April 1992 shall be deemed always to have included a corresponding section.
Subject to subsections (4) to (6) below, an election under section 138A of the Taxation of Chargeable Gains Act 1992 in respect of a right conferred on any person before 26th November 1996 may be made at any time before the end of the period for the making of such an election in respect of a right conferred on that person on that date.
An election in respect of a right conferred on any person shall not be made by virtue of subsection (3) above at any time after the final determination of his liability to corporation tax or capital gains tax for the chargeable period in which the right was in fact conferred on him.
A notice given to an officer of the Board before the day on which this Act is passed shall not have effect as an election under section 138A of the Taxation of Chargeable Gains Act 1992, or the corresponding provision applying to chargeable periods beginning before 6th April 1992, except in accordance with subsection (6) below.
Where—
any person has given a notification to an officer of the Board before the day on which this Act is passed, and
that notification was given either— that notification shall, unless the Board otherwise direct, be treated as if it were a valid and irrevocable election made by that person for the purposes of that section or, as the case may be, the corresponding provision.
in anticipation of the right to make an election under section 138A of the Taxation of Chargeable Gains Act 1992, or
for the purposes of an extra-statutory concession available to be used by that person for purposes similar to those of that section,
Where any notification given as mentioned in subsection (6)(b)(ii) above is treated as an election for the purposes of section 138A of the Taxation of Chargeable Gains Act 1992 or any corresponding provision, that section or, as the case may be, the corresponding provision shall be taken to have no effect by virtue of that election in relation to any disposal before 26th November 1996 of any asset which—
was issued to any person in pursuance of an earn-out right;
was issued to any person in pursuance of any such right as is mentioned in subsection (4) of that section; or
falls for the purposes of that Act to be treated as the same as an asset issued at any time to any person in pursuance of such a right as is mentioned in paragraph (a) or (b) above but is not an asset first held by that person before that time.
Subsection (7) above shall not prevent section 138A of the Taxation of Chargeable Gains Act 1992 from being taken, for the purposes of applying that Act to any disposal on or after 26th November 1996, to have had effect in relation to—
any disposal before that date on which, by virtue of any of the enactments specified in section 35(3)(d) of that Act, neither a gain nor a loss accrued,
any deemed disposal before that date by reference to which a gain or loss falls to be calculated in accordance with section 116(10)(a) of that Act, or
any transaction before that date that would have fallen to be treated as a disposal but for section 127 of that Act.
After section 801 of the Taxes Act 1988 there shall be inserted the following section—
This section has effect in relation to dividends paid to a company resident in the United Kingdom at any time on or after 26th November 1996.
Section 807A of the Taxes Act 1988 (disposals and acquisitions of company loan relationships with or without interest) shall be amended as follows.
At the beginning of subsection (2) there shall be inserted “Subject to subsection (2A) below,”.
After that subsection there shall be inserted the following subsection—
In subsection (3)(b), after “related transaction” there shall be inserted “other than the initial transfer under or in accordance with any repo or stock-lending arrangements relating to that relationship”.
After subsection (6) there shall be inserted the following subsection—
Subsections (2) and (3) above have effect in relation to interest accruing on or after 1st April 1996.
Subsection (4) above has effect in relation to transactions made on or after 26th November 1996.
Section 824 of the Taxes Act 1988 (repayment supplements), where it has effect as amended by paragraph 41 of Schedule 19 to the Finance Act 1994, shall be amended in accordance with subsections (2) to (4) below.
For paragraphs (a) and (b) of subsection (3) there shall be substituted the following paragraphs—.
In paragraph (c) of that subsection, for the words from “the relevant time” to the end of that paragraph there shall be substituted “the relevant time is the date on which the penalty or surcharge was paid”.
For subsection (4) there shall be substituted the following subsections—
In subsection (2) of section 283 of the Taxation of Chargeable Gains Act 1992 (repayment supplements), for the words from “the relevant time” to the end of that subsection there shall be substituted “the relevant time is the date on which the tax was paid”.
This section has effect as respects the year 1997-98 and subsequent years of assessment and shall be deemed to have had effect as respects the year 1996-97.
For the Table in Schedule 1 to the Inheritance Tax Act 1984 there shall be substituted— Portion of value Lower limit (£) Upper limit (£) Rate of tax Per cent. 0 215,000 Nil 215,000 — 40
Subsection (1) above shall apply to any chargeable transfer made on or after 6th April 1997; and section 8 of that Act (indexation of rate bands) shall not have effect as respects any difference between the retail prices index for the month of September 1995 and that for the month of September 1996.
After section 124B of the Inheritance Tax Act 1984 there shall be inserted the following section—
Stamp duty shall not be chargeable on an instrument transferring any property which is subject to the trusts of an authorised unit trust (“the target trust”) to the trustees of another authorised unit trust (“the acquiring trust”) if the conditions set out in subsection (2) below are fulfilled.
Those conditions are that—
the transfer forms part of an arrangement under which the whole of the available property of the target trust is transferred to the trustees of the acquiring trust;
under the arrangement all the units in the target trust are extinguished;
the consideration under the arrangement consists of or includes the issue of units (“the consideration units”) in the acquiring trust to the persons who held the extinguished units;
the consideration units are issued to those persons in proportion to their holdings of the extinguished units; and
the consideration under the arrangement does not include anything else, other than the assumption or discharge by the trustees of the acquiring trust of liabilities of the trustees of the target trust.
An instrument on which stamp duty is not chargeable by virtue only of this section shall not be taken to be duly stamped unless it is stamped with the duty to which it would be liable but for this section or it has, in accordance with section 12 of the Stamp Act 1891, been stamped with a particular stamp denoting that it is not chargeable with any duty.
In this section—
“authorised unit trust” means a unit trust scheme in the case of which an order under section 78 of the Financial Services Act 1986 is in force;
“the whole of the available property of the target trust” means the whole of the property subject to the trusts of the target trust, other than any property which is retained for the purpose of discharging liabilities of the trustees of the target trust;
“unit” and “unit trust scheme” have the same meanings as in Part VII of the Finance Act 1946.
Each of the parts of an umbrella scheme (and not the scheme as a whole) shall be regarded for the purposes of this section as an authorised unit trust; and in this section “umbrella scheme” has the same meaning as in section 468 of the Taxes Act 1988 and references to parts of an umbrella scheme shall be construed in accordance with that section.
This section applies to any instrument which is executed—
on or after the day on which this Act is passed; but
before 1st July 1999.
This section applies where there is a relevant transfer, under a scheme, of the whole or any part of the business carried on by a mutual insurance company (“the mutual”) to a company which has share capital (“the acquiring company”).
Stamp duty shall not be chargeable on an instrument executed for the purposes of or in connection with the transfer if the requirements of subsections (3) and (4) below are satisfied in relation to the shares of a company (“the issuing company”) which is either—
the acquiring company; or
a company of which the acquiring company is a wholly-owned subsidiary.
Shares in the issuing company must be offered, under the scheme, to at least 90 per cent. of the persons who immediately before the transfer are members of the mutual.
Under the scheme, all the shares in the issuing company which will be in issue immediately after the transfer has been made, other than shares which are to be or have been issued pursuant to an offer to the public, must be offered to the persons who (at the time of the offer) are—
members of the mutual;
persons who are entitled to become members of the mutual; or
employees, former employees or pensioners of the mutual or of a company which is a wholly-owned subsidiary of the mutual.
An instrument on which stamp duty is not chargeable by virtue only of subsection (2) above shall not be taken to be duly stamped unless it is stamped with the duty to which it would be liable but for that subsection or it has, in accordance with section 12 of the Stamp Act 1891, been stamped with a particular stamp denoting that it is not chargeable with any duty.
For the purposes of this section, a company is a wholly-owned subsidiary of another person (“the parent”) if it has no members except the parent and the parent’s wholly-owned subsidiaries or persons acting on behalf of the parent or its wholly-owned subsidiaries.
In this section “relevant transfer” means—
a transfer to which Schedule 2C to the Insurance Companies Act 1982 (transfers of insurance business) applies; or
a transfer to which that Schedule would apply but for section 15(1A) of that Act (provisions of Part II of that Act which do not apply to EC companies in certain circumstances).
In this section—
“insurance company” has the meaning given in section 96 of the Insurance Companies Act 1982;
“mutual insurance company” means an insurance company carrying on business without having any share capital;
The Treasury may by regulations amend subsection (3) above by substituting a lower percentage for the percentage there mentioned.
The Treasury may by regulations provide that any or all of the references in subsections (3) and (4) above to members shall be construed as references to members of a class specified in the regulations; and different provision may be made for different cases.
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.
This section applies in relation to instruments executed on or after the day on which this Act is passed.
Before section 81 of the Finance Act 1986 there shall be inserted the following sections—
Section 81 of that Act (sales to market makers) shall be omitted.
In section 88(1B)(b)(i) of that Act (which prevents repayment or cancellation of stamp duty reserve tax on certain agreements to transfer chargeable securities which were acquired by means of a transfer on which stamp duty was not chargeable by virtue of section 81) for “81” there shall be substituted “80A”.
Subsections (1) and (2) above apply to instruments executed on or after the commencement day.
Subsection (3) above applies in relation to an agreement to transfer chargeable securities if the securities were acquired in a transaction which was given effect to by an instrument of transfer executed on or after the commencement day.
For the purposes of this section the commencement day is such day as the Treasury may by order made by statutory instrument appoint.
After section 80B of the Finance Act 1986 there shall be inserted the following section—
Section 82 of that Act (borrowing of stock by market makers) shall be omitted.
This section applies to instruments executed on or after the commencement day.
For the purposes of this section the commencement day is such day as the Treasury may by order made by statutory instrument appoint.
Subsection (4) of section 67 of the Finance Act 1986 (depositary receipts: reduced rate of stamp duty for qualified dealers other than market makers) shall be omitted.
Accordingly—
in subsection (3) of that section for “subsections (4) and” there shall be substituted “subsection”; and
subsections (6) to (8) of section 69 of that Act (definition of “qualified dealer” and “market maker” for the purposes of section 67(4) and power to amend definition) shall be omitted.
Subsection (4) of section 70 of that Act (clearance services: reduced rate of stamp duty for qualified dealers other than market makers) shall be omitted.
Accordingly—
in subsection (3) of that section for “subsections (4) and” there shall be substituted “subsection”; and
section 72(4) of that Act (definition of “qualified dealer” and “market maker” for the purposes of section 70(4)) shall be omitted.
This section applies to any instrument executed on or after the day which is the commencement day for the purposes of section 97 above, except an instrument which transfers relevant securities which were acquired by the transferor before that date.
Section 87 of the Finance Act 1986 shall not apply as regards an agreement to transfer securities which constitute property which is subject to the trusts of an authorised unit trust (“the target trust”) to the trustees of another authorised unit trust (“the acquiring trust”) if the conditions set out in subsection (2) below are fulfilled.
Those conditions are that—
the agreement forms part of an arrangement under which the whole of the available property of the target trust is transferred to the trustees of the acquiring trust;
under the arrangement all the units in the target trust are extinguished;
the consideration under the arrangement consists of or includes the issue of units (“the consideration units”) in the acquiring trust to the persons who held the extinguished units;
the consideration units are issued to those persons in proportion to their holdings of the extinguished units; and
the consideration under the arrangement does not include anything else, other than the assumption or discharge by the trustees of the acquiring trust of liabilities of the trustees of the target trust.
Where— section 87 of the Finance Act 1986 shall not apply as regards an agreement, or a deemed agreement, to transfer a unit to the managers of the target trust which is made in order that the unit may be extinguished under the arrangement mentioned in section 95(2)(a) or, as the case may be, subsection (2)(a) above.
stamp duty is not chargeable on an instrument by virtue of section 95(1) above, or
section 87 of the Finance Act 1986 does not apply as regards an agreement by virtue of subsection (1) above,
In this section—
“unit” and “unit trust scheme” have the same meanings as in Part VII of the Finance Act 1946.
Each of the parts of an umbrella scheme (and not the scheme as a whole) shall be regarded for the purposes of this section as an authorised unit trust; and in this section “umbrella scheme” has the same meaning as in section 468 of the Taxes Act 1988 and references to parts of an umbrella scheme shall be construed in accordance with that section.
This section applies—
to an agreement which is not conditional, if the agreement is made on or after the day on which this Act is passed but before 1st July 1999; and
to a conditional agreement, if the condition is satisfied on or after the day on which this Act is passed but before 1st July 1999.
Where an agreement to transfer securities constituting property subject to the trusts of an authorised unit trust (“the absorbed trust”) is made by means of a direction by the holders of units in the absorbed trust (“the sellers”) to the trustees of another trust (“the continuing trust”) to hold the whole of the available property of the absorbed trust on the trusts of the continuing trust, section 87 of the Finance Act 1986 shall not apply as regards the agreement if the conditions set out in subsection (2) below are fulfilled.
Those conditions are that—
the trustees of the absorbed trust are the same persons as the trustees of the continuing trust;
the agreement forms part of an arrangement under which all the units in the absorbed trust are extinguished;
the consideration for the direction by the sellers consists of or includes the issue of units (“the consideration units”) in the continuing trust to the sellers;
the consideration units are issued to the sellers in proportion to their holdings of the extinguished units; and
the consideration for the direction by the sellers does not include anything else, other than the assumption or discharge by the trustees of the continuing trust of liabilities of the trustees of the absorbed trust.
Where section 87 of the Finance Act 1986 does not apply as regards an agreement by virtue of subsection (1) above, that section shall not apply as regards an agreement, or a deemed agreement, to transfer a unit to the managers of the absorbed trust which is made in order that the unit may be extinguished under the arrangement mentioned in subsection (2)(b) above.
In this section—
This section applies—
to an agreement which is not conditional, if the agreement is made on or after the day on which this Act is passed but before 1st July 1999; and
to a conditional agreement, if the condition is satisfied on or after the day on which this Act is passed but before 1st July 1999.
After section 88 of the Finance Act 1986 there shall be inserted the following sections—
Section 89 of that Act (exceptions for market makers etc.) shall be omitted.
In section 88(1B)(b)(ii) of that Act (which prevents repayment or cancellation of stamp duty reserve tax on certain agreements to transfer property consisting of chargeable securities which were acquired in pursuance of an agreement on which tax was not chargeable by virtue of section 89) for “89” there shall be substituted “88A”.
Subsections (1) and (2) above apply to an agreement to transfer securities—
in the case of an agreement which is not conditional, if the agreement is made on or after the commencement day; and
in the case of a conditional agreement, if the condition is satisfied on or after the commencement day.
Subsection (3) above applies in relation to property consisting of chargeable securities if the securities were acquired in pursuance of an agreement to which subsections (1) and (2) above apply (by virtue of subsection (4) above).
For the purposes of this section the commencement day is such day as the Treasury may by order made by statutory instrument appoint.
After section 89A of the Finance Act 1986 there shall be inserted the following section—
Section 89B of that Act (exceptions for stock lending and collateral security arrangements) shall be omitted.
In consequence of subsections (1) and (2) above, for section 88(1B)(b)(iia) of that Act (which is inserted by section 106(5)(c) below and which prevents repayment or cancellation of stamp duty reserve tax on certain agreements to transfer property consisting of chargeable securities which were acquired in pursuance of an agreement on which tax was not chargeable by virtue of section 89B(1)(a)) there shall be substituted—.
After section 88(1B) of that Act there shall be inserted the following subsections—
Subsections (1) and (2) above apply to an agreement to transfer securities—
in the case of an agreement which is not conditional, if the agreement is made on or after the commencement day; and
in the case of a conditional agreement, if the condition is satisfied on or after the commencement day.
Subsection (3) above applies in relation to property consisting of chargeable securities if the securities were acquired in pursuance of an agreement to which subsections (1) and (2) above apply (by virtue of subsection (5) above).
Subsection (4) above applies to instruments executed on or after the commencement day.
For the purposes of this section the commencement day is such day as the Treasury may by order made by statutory instrument appoint.
Subsection (5) of section 93 of the Finance Act 1986 (depositary receipts: reduced rate of tax for qualified dealers other than market makers) shall be omitted.
Accordingly—
in subsection (4) of that section for “(5) to” there shall be substituted “(6) and”;
in subsection (7)(a) of that section for “subsections (4) to” there shall be substituted “subsections (4) and”;
subsections (5) to (7) of section 94 of that Act (definition of “qualified dealer” and “market maker” for the purposes of section 93(5) and power to substitute different definition) shall be omitted.
Subsection (3) of section 96 of the Finance Act 1986 (clearance services: reduced rate of tax for qualified dealers other than market makers) shall be omitted.
Accordingly—
in subsection (2) of that section, for “(3) to” there shall be substituted “(4) and”;
in subsection (5)(a) of that section for “subsections (2) to” there shall be substituted “subsections (2) and”;
subsection (11) of that section (definition of “qualified dealer” and “market maker” for the purposes of that section) shall be omitted.
This section applies where securities are transferred on or after the day which is the commencement day for the purposes of section 102 above, unless the securities were acquired by the transferor before that day.
Paragraph (b) of section 90(3) of the Finance Act 1986 (which provides that section 87 shall not apply as regards an agreement to transfer securities constituted by or transferable by means of an inland bearer instrument which does not fall within exemption 3 in the heading “Bearer Instrument” in Schedule 1 to the Stamp Act 1891) shall cease to have effect.
After section 90(3) of that Act there shall be inserted—
At the end of that section there shall be added—
This section applies to an agreement if the inland bearer instrument in question was issued on or after 26th November 1996 and—
in the case of an agreement which is not conditional, the agreement is made on or after 26th November 1996; or
in the case of a conditional agreement, the condition is satisfied on or after 26th November 1996.
Section 87 of the Finance Act 1986 (the principal charge) shall be amended in accordance with subsections (2) and (3) below.
For subsection (7A) (deemed separate agreements where there would be no charge to tax etc had there been such agreements) there shall be substituted—
Subsection (7B) (which, in consequence of the repeals made by section 188(1) of the Finance Act 1996, is of no further utility in relation to the charge to tax but whose effect is reproduced by subsection (8) below for the purposes of repayment or cancellation of tax) shall cease to have effect.
Section 88 of the Finance Act 1986 (special cases) shall be amended in accordance with subsections (5) to (7) below.
In subsection (1B) (certain instruments on which stamp duty is not chargeable to be disregarded in construing the conditions in section 92(1A) and (1B) for repayment or cancellation of tax)—
in paragraph (a) (the property transferred by the instrument consists of chargeable securities) after “consists of” there shall be inserted “or includes”;
in paragraph (b) (which relates to the acquisition of the chargeable securities so transferred) for “the chargeable securities” there shall be substituted “any of those chargeable securities”; and
the word “or” at the end of sub-paragraph (ii) of that paragraph shall be omitted and after that sub-paragraph there shall be inserted—.
For subsections (4) and (5) (identification of the securities in question and reduction of the charge in certain cases) there shall be substituted—
For the sidenote, there shall be substituted “Special cases.”
In section 92 of the Finance Act 1986 (repayment or cancellation of tax), after subsection (6) there shall be inserted—
The amendments made by subsections (2), (3) and (8) above have effect in relation to an agreement to transfer securities if—
the agreement is conditional and the condition is satisfied on or after 4th January 1997; or
the agreement is not conditional and is made on or after that date.
The amendments made by subsections (5) and (6) above have effect where the instrument on which stamp duty is not chargeable by virtue of section 42 of the Finance Act 1930 or section 11 of the Finance Act (Northern Ireland) 1954 is executed on or after 4th January 1997 in pursuance of an agreement to transfer securities made on or after that date.
Section 113 of the Finance Act 1984 (restrictions on relief by reference to a qualifying date) shall be amended as follows.
In subsection (4) (meaning of “qualifying date”), after “means” there shall be inserted “(subject to subsection (6) below)”.
In subsection (6) (old participator’s qualifying date to be taken into account, in the case of a transfer, in determining as respects certain expenditure the date that is to be regarded as the new participator’s qualifying date), for the words from “is an applicable date” onwards there shall be substituted “, rather than the date given by subsection (4) above, shall be taken to be the qualifying date in relation to the new participator.”
This section has effect in relation to any expenditure in respect of which a claim is made on or after 23rd July 1996.
For section 2 of the National Debt (Stockholders Relief) Act 1892 (date for striking balance for a dividend on government stock) there shall be substituted the following section—
This section has effect in relation to dividends other than those for which the balance is struck on or before the day on which this Act is passed.
Section 136 of the Leasehold Reform, Housing and Urban Development Act 1993 (levy on local authorities in respect of dwelling-house disposals) shall have effect, and be deemed always to have had effect, with the following subsection inserted after subsection (4)—
This section applies to—
any information held by the Secretary of State or the Department of Health and Social Services for Northern Ireland for the purposes of any of his or its functions relating to social security; and
any information held by a person in connection with the provision by him to the Secretary of State or that Department of any services which that person is providing for purposes connected with any of those functions.
Subject to the following provisions of this section, the person holding any information to which this section applies shall be entitled to supply it to—
the Commissioners of Customs and Excise or any person by whom services are being provided to those Commissioners for purposes connected with any of their functions; or
the Commissioners of Inland Revenue or any person by whom services are being provided to those Commissioners for purposes connected with any of their functions.
Information shall not be supplied to any person under this section except for one or more of the following uses—
use in the prevention, detection, investigation or prosecution of criminal offences which it is a function of the Commissioners of Customs and Excise, or of the Commissioners of Inland Revenue, to prevent, detect, investigate or prosecute;
use in the prevention, detection or investigation of conduct in respect of which penalties which are not criminal penalties are provided for by or under any enactment;
use in connection with the assessment or determination of penalties which are not criminal penalties;
use in checking the accuracy of information relating to, or provided for purposes connected with, any matter under the care and management of the Commissioners of Customs and Excise or the Commissioners of Inland Revenue;
use (where appropriate) for amending or supplementing any such information; and
use in connection with any legal or other proceedings relating to anything mentioned in paragraphs (a) to (e) above.
An enactment authorising the disclosure of information by a person mentioned in subsection (2)(a) or (b) above shall not authorise the disclosure by such a person of information supplied to him under this section except to the extent that the disclosure is also authorised by a general or specific permission granted by the Secretary of State or by the Department of Health and Social Services for Northern Ireland.
In this section references to functions relating to social security include references to—
functions in relation to social security contributions, social security benefits (whether contributory or not) or national insurance numbers; and
functions under the Jobseekers Act 1995 or the Jobseekers (Northern Ireland) Order 1995.
In this section “conduct” includes acts, omissions and statements.
This section shall come into force on such day as the Treasury may by order made by statutory instrument appoint, and different days may be appointed under this subsection for different purposes.
Within twelve months of this Act receiving Royal Assent the Treasury shall report to Parliament on the consequences to the Exchequer of reducing VAT on energy saving materials.
In this Act “the Taxes Act 1988” means the Income and Corporation Taxes Act 1988.
The enactments mentioned in Schedule 18 to this Act (which include spent provisions) are hereby repealed to the extent specified in the third column of that Schedule.
The repeals specified in that Schedule have effect subject to the commencement provisions and savings contained or referred to in the notes set out in that Schedule.
This Act may be cited as the Finance Act 1997.
Section 13.
The Commissioners shall establish and maintain a register of persons involved in the provision of dutiable gaming.
In this Part of this Schedule— For the purposes of this Part of this Schedule premises in the United Kingdom are “unlicensed premises” unless they are premises in Great Britain— References in this Part of this Schedule to being a member of a group and to being the representative member of a group shall be construed in accordance with paragraph 8 below.
The Commissioners shall, on receipt of a valid application made by— add that person to the register. The following provisions of this paragraph have effect for the interpretation of sub-paragraph (1) above. A valid application is one which is made in such form and manner, and is accompanied by such information, as the Commissioners may require. Subject to sub-paragraph (5) below— A body corporate cannot be a registrable person if it— A body corporate which— is a registrable person if another body corporate which is a member of that group would be a registrable person but for sub-paragraph (5) above.
This paragraph has effect for determining when a registered person is to be removed by the Commissioners from the register. Where the Commissioners receive a valid notice from a registered person stating that he has ceased to be a registrable person, he shall be removed from the register. Where the Commissioners receive a valid notice from a registered person stating that he will, from a time specified in the notice, cease to be a registrable person, he shall be removed from the register with effect from that time. Where— Where it appears to the Commissioners that a registered person has ceased to be a registrable person, he shall be removed from the register. A registered person shall be removed from the register if— For the purposes of this paragraph, a valid notice is one which is given in such form and manner, and accompanied by such information, as the Commissioners may require.
There is a contravention of this sub-paragraph by every person who is a responsible person in relation to any premises if— For the purposes of this paragraph, a person is a responsible person in relation to any premises if— Where a person contravenes sub-paragraph (1) above, that contravention shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties) and shall also attract daily penalties. References in this paragraph to premises being notifiable are references to them being notifiable for the purposes of paragraph 6 below.
This paragraph has effect for determining the premises to be specified in a registered person’s entry on the register. A person who makes an application under paragraph 3(1) above shall, on making that application, notify the Commissioners of all the premises which— and the Commissioners shall, on registering him on the register, cause those premises to be specified in his entry on the register. Where any premises not currently notified by a registered person become notifiable by him— Subject to sub-paragraph (5) below, where any premises currently notified by a registered person cease to be notifiable by him— A registered person is not required to notify the Commissioners as mentioned in sub-paragraph (4) above in a case where— Where— the Commissioners shall ensure that those premises cease, with effect from that date, to be specified in his entry on the register. Subject to sub-paragraph (8) below, where— he shall notify the Commissioners accordingly and they shall cause those premises to be no longer specified in his entry on the register. A registered person is not required to notify the Commissioners as mentioned in sub-paragraph (7) above in a case where he gives notice to the Commissioners under paragraph 4(4) above. For the purposes of this paragraph premises are currently notified by any person at any time if at that time they are specified in his entry on the register. For the purposes of this paragraph, in the case of a person who is not a body corporate, or who is a body corporate that is not a member of any group— For the purposes of this paragraph, in the case of a body corporate which is the representative member of a group—
Where, in contravention of paragraph 6(2) above, a person fails to notify the Commissioners of any premises, that failure shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties). Where— that failure shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties) and shall also attract daily penalties for every day after the end of that period on which the failure to notify continues.
Two or more bodies corporate are eligible to be treated as members of a group for the purposes of this Part of this Schedule if each is resident or has an established place of business in the United Kingdom and— Subject to sub-paragraph (3) below, where an application for the purpose is made to the Commissioners with respect to two or more bodies corporate eligible to be treated as members of a group, then, from such date as may be specified in the application— The Commissioners may refuse an application under sub-paragraph (2) above if, and only if, it appears to them necessary to do so for the protection of the revenue from gaming duty. Where any bodies corporate are treated as members of a group for the purposes of this Part of this Schedule and an application for the purpose is made to the Commissioners, then, from such time as may be specified in the application— If it appears to the Commissioners necessary to do so for the protection of the revenue from gaming duty, they may— Where— they shall, by notice given to that person, terminate that treatment from such date as may be specified in the notice. Where— the Commissioners shall, by notice given to such one of the bodies corporate mentioned in paragraph (b) above as they think fit, substitute that body corporate as the representative member as from that time. Where a notice under sub-paragraph (6) above is given to one member of a group of which there is only one other member, then (subject to any further application under this paragraph) the other member shall also cease, from the time specified in the notice, to be treated for the purposes of this Part of this Schedule as a member of the group. An application under this paragraph with respect to any bodies corporate— For the purposes of this paragraph a body corporate shall be taken to control another body corporate if— and an individual or individuals shall be taken to control a body corporate if (were he or they a company) he or they would be that body’s holding company within the meaning of that Act. Sections 14 to 16 of the Finance Act 1994 (review and appeals) shall have effect in relation to any refusal by the Commissioners of an application under sub-paragraph (2) or (4) above as if that refusal were a decision of a description specified in Schedule 5 to that Act.
Where, in the case of any premises, the Commissioners and every relevant person so agree, the provisions of sections 10 to 15 of this Act and this Schedule shall have effect in relation to those premises as if accounting periods for the purposes of those provisions were periods of six months beginning on such dates other than 1st October and 1st April as may be specified in the agreement. For the purposes of sub-paragraph (1) above, a person is a relevant person in relation to any premises if— The Commissioners shall not enter into an agreement under this paragraph for a change in the date on which an accounting period begins in relation to any premises unless they are satisfied that appropriate transitional provision for the protection of the revenue is contained in the agreement. The provision which, for the purposes of sub-paragraph (3) above, may be contained in any agreement under this paragraph shall include any such provision as may be contained in regulations under section 11(5) of this Act. Sections 14 to 16 of the Finance Act 1994 (review and appeals) shall have effect in relation to any refusal of the Commissioners to enter into an agreement under this paragraph, or to enter into such an agreement on particular terms, as if that refusal were a decision of a description specified in Schedule 5 to that Act.
The Commissioners may give directions as to the making of returns in connection with gaming duty by— Directions under this paragraph may, in particular, make provision as to— Where a person fails to comply with any provision of a direction given under this paragraph, that failure shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties) and shall also attract daily penalties.
The Commissioners may make regulations providing for any matter for which provision appears to them to be necessary or expedient for the administration or enforcement of gaming duty, or for the protection of the revenue from that duty. Regulations under this paragraph may, in particular, include provision as to the giving and operation of directions under section 11(6) of this Act. Where any person contravenes or fails to comply with any of the provisions of any regulations under this paragraph, his contravention or failure to comply shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties).
Any person who obstructs any officer in the exercise of his functions in relation to gaming duty shall be guilty of an offence and liable, on summary conviction, to a penalty of level 5 on the standard scale. Any person who— shall be guilty of an offence. A person guilty of an offence under sub-paragraph (2) above shall be liable— Section 27 of the Betting and Gaming Duties Act 1981 (offences by bodies corporate) shall have effect for the purposes of any offence under this paragraph as it has effect for the purposes of the offences mentioned in that section. Where a person has committed an offence under sub-paragraph (2) above, all designated items related to the relevant gaming shall be liable to forfeiture if— In sub-paragraph (5) above, “the relevant gaming” means— For the purposes of sub-paragraph (5) above, the designated items related to any gaming are— For the purposes of sub-paragraph (7)(b) above the cash and gaming chips taken to be under the control of a person who is the provider of any premises or is concerned with the organisation or management of gaming on any premises shall include all cash and gaming chips in play or left on a gaming table on those premises.
Sections 28 and 29 of the Betting and Gaming Duties Act 1981 (recovery of duty) shall have effect as follows so as to apply in relation to gaming duty as they applied in relation to the duty on gaming licences— Sub-paragraph (1) above shall cease to have effect on such day as the Commissioners may by order made by statutory instrument appoint, and different days may be appointed under this sub-paragraph for different purposes.
No obligation as to secrecy or other restriction on the disclosure of information imposed by statute or otherwise shall prevent— information for the purpose of assisting the Commissioners in the carrying out of their functions with respect to gaming duty or, as the case may be, that Board in the carrying out of that Board’s functions under the Gaming Act 1968. Information obtained by virtue of a disclosure authorised by this paragraph shall not be disclosed except—
Section 29A of the Betting and Gaming Duties Act 1981 (evidence by certificate) shall apply for the purposes of sections 10 to 15 of this Act and this Schedule as it applies for the purposes of that Act.
Section 31 of the Betting and Gaming Duties Act 1981 (protection of officers) shall apply for the purposes of gaming duty as it applies for the purposes of general betting duty.
Section 13.
The Customs and Excise Management Act 1979 shall be amended in accordance with the provisions of this Part of this Schedule.
This paragraph amends section 1(1) (interpretation). In the definition of “the revenue trade provisions of the customs and excise Acts”, after paragraph (d) there shall be inserted the following paragraph—. In paragraph (a) of the definition of “revenue trader”, after sub-paragraph (ia) there shall be inserted the following sub-paragraphs—. In sub-paragraph (ii) of that paragraph, for “or (ia)” there shall be substituted “, (ia), (ib) or (ic)”.
In section 118B (furnishing of information etc. by revenue traders)—
in subsection (1)(a), after sub-paragraph (ii) there shall be inserted or;
in subsection (1)(b), at the end there shall be inserted “or to the transaction or activity”; and
in subsection (3), after “any business” there shall be inserted “, or to any transaction or activity effected or taking place in the course or furtherance of any business,”.
This paragraph amends section 118C (powers of entry and search). After subsection (2) there shall be inserted the following subsections— In subsection (3) (justice’s warrant for entry), after paragraph (b) there shall be inserted or. In subsection (4)(b) (powers on entry under a warrant), after “of a serious nature” there shall be inserted “or in respect of a gaming duty offence”. In subsection (5) (meaning of “fraud offence”), at the end there shall be inserted “and “a gaming duty offence” means an offence under paragraph 12(2) of Schedule 1 to the Finance Act 1997 (offences in connection with gaming duty)”.
Schedule 2 to the Gaming Act 1968 (grant etc. of licences) shall be amended in accordance with the provisions of this paragraph. In paragraph 20(1) (grounds for refusing to grant or renew a licence), after paragraph (f) there shall be inserted the following paragraph— In paragraph 48(1) (cancellation of licence on conviction for second or subsequent offence), after “the enactments consolidated by that Act)” there shall be inserted “or of an offence under paragraph 12 of Schedule 1 to the Finance Act 1997”. In paragraph 60(c) (transfer of licence may be refused if duty unpaid), after “bingo duty” there shall be inserted “or gaming duty”.
In paragraph 5(a) of Schedule 6 to the Insolvency Act 1986, paragraph 2(3)(a) of Schedule 3 to the Bankruptcy (Scotland) Act 1985 and paragraph 5(a) of Schedule 4 to the Insolvency (Northern Ireland) Order 1989 (preferential debts), for “or bingo duty” there shall, in each case, be substituted “, bingo duty or gaming duty”.
In section 12(2)(c) of the Finance Act 1994 (duty may be assessed upon the occurrence of certain defaults in connection with betting duties and bingo duty), after “under Schedule 1 or 3 to the Betting and Gaming Duties Act 1981” there shall be inserted “or Schedule 1 to the Finance Act 1997”.
Section 18.
In this Schedule “the 1994 Act” means the Vehicle Excise and Registration Act 1994.
In section 21 of the 1994 Act (registration of vehicles), for subsection (1) there shall be substituted the following subsection—
In section 22 of the 1994 Act (registration regulations), after subsection (3) there shall be inserted the following subsection—
In section 33 of the 1994 Act (not exhibiting licence), after subsection (1) there shall be inserted the following subsection— In subsection (2) of that section, after “(1)” there shall be inserted “or (1A)”. For subsection (3) of that section there shall be substituted the following subsection— In subsection (4) of that section, for “in respect of which excise duty is chargeable” there shall be substituted “which is kept or used on a public road”. After that subsection there shall be inserted the following subsection—
Immediately before section 44 of the 1994 Act there shall be inserted the following section—
In subsection (2) of section 44 of the 1994 Act (forgery and fraud), for paragraph (c) there shall be substituted the following paragraph—.
In section 46 of the 1994 Act (duty to give information)— In subsection (1) of section 51 of that Act (admissions), for “or 34” there shall be substituted “, 34 or 43A”. “nil licence” means a document which is in the form of a vehicle licence and is issued by the Secretary of State in pursuance of regulations under this Act in respect of a vehicle which is an exempt vehicle, In paragraph 20 of Schedule 2 to that Act (exempt vehicles), sub-paragraph (4) shall cease to have effect.
In Schedule 3 to the Road Traffic Offenders Act 1988 (fixed penalty offences), in column 2 of the entry relating to section 33 of the 1994 Act, for “licence” there shall be substituted “vehicle licence, trade licence or nil licence”. In Article 198 of the Road Traffic (Northern Ireland) Order 1981 (offences punishable without prosecution), in paragraph (1)(f) for “licence” there shall be substituted “vehicle licence, trade licence or nil licence”.
This Schedule shall come into force on such day as the Secretary of State may by order made by statutory instrument appoint; and different days may be appointed under this paragraph for different purposes.
Section 22.
Section 50.
This Part of this Schedule has effect for the purposes of the following provisions (which make it a defence to a claim for repayment that the repayment would unjustly enrich the claimant), namely— Those provisions are referred to in this Part of this Schedule as unjust enrichment provisions. In this Part of this Schedule—
This paragraph applies where— Where, in a case to which this paragraph applies, loss or damage has been or may be incurred by the taxpayer as a result of mistaken assumptions made in his case about the operation of any provisions relating to a relevant tax, that loss or damage shall be disregarded, except to the extent of the quantified amount, in the making of any determination— In sub-paragraph (2) above “the quantified amount” means the amount (if any) which is shown by the taxpayer to constitute the amount that would appropriately compensate him for loss or damage shown by him to have resulted, for any business carried on by him, from the making of the mistaken assumptions. The reference in sub-paragraph (2) above to provisions relating to a relevant tax is a reference to any provisions of— This paragraph has effect for the purposes of making any repayment on or after the day on which this Act is passed, even if the claim for that repayment was made before that day.
The Commissioners may by regulations make provision for reimbursement arrangements made by any person to be disregarded for the purposes of any or all of the unjust enrichment provisions except where the arrangements— In this paragraph “reimbursement arrangements” means any arrangements for the purposes of a claim under a relevant repayment provision which— Without prejudice to the generality of sub-paragraph (1) above, the provision that may be required by regulations under this paragraph to be contained in reimbursement arrangements includes— Regulations under this paragraph may impose obligations on such persons as may be specified in the regulations— Regulations under this paragraph may make provision for the form and manner in which, and the times at which, undertakings are to be given to the Commissioners in accordance with the regulations; and any such provision may allow for those matters to be determined by the Commissioners in accordance with the regulations. Regulations under this paragraph may— Regulations under this paragraph may have effect (irrespective of when the claim for repayment was made) for the purposes of the making of any repayment by the Commissioners after the time when the regulations are made; and, accordingly, such regulations may apply to arrangements made before that time. Regulations under this paragraph shall be made by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.
Where any obligation is imposed by regulations made by virtue of paragraph 3(4) above, a contravention or failure to comply with that obligation shall, to the extent that it relates to amounts repaid under section 137A of the Customs and Excise Management Act 1979, attract a penalty under section 9 of the Finance Act 1994 (penalties in connection with excise duties). For the purposes of Schedule 7 to the Finance Act 1994 (insurance premium tax), a contravention or failure to comply with an obligation imposed by regulations made by virtue of paragraph 3(4) above shall be deemed, to the extent that it relates to amounts repaid under paragraph 8 of that Schedule (recovery of overpaid insurance premium tax), to be a failure to comply with a requirement falling within paragraph 17(1)(c) of that Schedule (breach of regulations). Paragraph 23 of Schedule 5 to the Finance Act 1996 (power to provide for penalty) shall have effect as if an obligation imposed by regulations made by virtue of paragraph 3(4) above were, to the extent that it relates to amounts repaid under paragraph 14 of that Schedule (recovery of overpaid landfill tax), a requirement imposed by regulations under Part III of that Act; and the provisions of that Schedule in relation to penalties under Part V of that Schedule shall have effect accordingly.
For subsection (4) of section 137A of the Customs and Excise Management Act 1979 (time limit on recovery of overpaid excise duty) there shall be substituted the following subsection— The Commissioners shall not be liable, on a claim made under this paragraph, to repay any amount paid to them more than three years before the making of the claim. The Commissioners shall not be liable, on a claim made under this paragraph, to repay any amount paid to them more than three years before the making of the claim.
In each of the enactments specified in sub-paragraph (2) below (which provide for the time limits applying to the making of assessments), for the words “six years”, wherever they occur, there shall be substituted the words “three years”. Those enactments are—
Paragraph 9 of Schedule 6 to the Finance Act 1994 (interest payable by the Commissioners in connection with air passenger duty) shall have effect, and be deemed always to have had effect, with the amendments for which this paragraph provides. In sub-paragraph (1) above the reference to an amount which the Commissioners are liable to repay in consequence of the making of a payment that was not due is a reference to only so much of that amount as is the subject of a claim that the Commissioners are required to satisfy or have satisfied. A claim under this paragraph shall not be made more than three years after the end of the applicable period to which it relates. Any reference in this paragraph to the authorisation by the Commissioners of the payment of any amount includes a reference to the discharge by way of set-off of the Commissioners' liability to pay that amount.
In determining the applicable period for the purposes of this paragraph there shall be left out of account any period by which the Commissioners' authorisation of the payment of interest is delayed by the conduct of the person who claims the interest. The reference in sub-paragraph (2A) above to a period by which the Commissioners' authorisation of the payment of interest is delayed by the conduct of the person who claims it includes, in particular, any period which is referable to— In determining for the purposes of sub-paragraph (2B) above whether any period of delay is referable to a failure by any person to provide information in response to a request by the Commissioners, there shall be taken to be so referable, except so far as may be prescribed, any period which— Sub-paragraph (1) above shall have effect for the purposes of determining whether any period beginning on or after the day on which this Act is passed is left out of account.
Paragraph 22 of Schedule 7 to the Finance Act 1994 (interest payable by the Commissioners in connection with insurance premium tax) shall have effect, and be deemed always to have had effect, with the amendments for which this paragraph provides. In sub-paragraph (1) above— A claim under this paragraph shall not be made more than three years after the end of the applicable period to which it relates. References in this paragraph to the authorisation by the Commissioners of the payment of any amount include references to the discharge by way of set-off of the Commissioners' liability to pay that amount.
In determining the applicable period for the purposes of this paragraph there shall be left out of account any period by which the Commissioners' authorisation of the payment of interest is delayed by the conduct of the person who claims the interest. The reference in sub-paragraph (5) above to a period by which the Commissioners' authorisation of the payment of interest is delayed by the conduct of the person who claims it includes, in particular, any period which is referable to— In determining for the purposes of sub-paragraph (5A) above whether any period of delay is referable to a failure by any person to provide information in response to a request by the Commissioners, there shall be taken to be so referable, except so far as may be provided for by regulations, any period which— Sub-paragraph (1) above shall have effect for the purposes of determining whether any period beginning on or after the day on which this Act is passed is left out of account.
Paragraph 29 of Schedule 5 to the Finance Act 1996 (interest payable by the Commissioners in connection with landfill tax) shall have effect, and be deemed always to have had effect, with the amendments for which this paragraph provides. In sub-paragraph (1) above— A claim under this paragraph shall not be made more than three years after the end of the applicable period to which it relates. References in this paragraph— include references to the discharge by way of set-off (whether in accordance with regulations under paragraph 42 or 43 below or otherwise) of the Commissioners' liability to pay that amount.
In determining the applicable period for the purposes of this paragraph there shall be left out of account any period by which the Commissioners' authorisation of the payment of interest is delayed by the conduct of the person who claims the interest. The reference in sub-paragraph (4) above to a period by which the Commissioners' authorisation of the payment of interest is delayed by the conduct of the person who claims it includes, in particular, any period which is referable to— In determining for the purposes of sub-paragraph (4A) above whether any period of delay is referable to a failure by any person to provide information in response to a request by the Commissioners, there shall be taken to be so referable, except so far as may be provided for by regulations, any period which— Sub-paragraph (1) above shall have effect for the purposes of determining whether any period beginning on or after the day on which this Act is passed is left out of account.
The regulations may provide for any limitation on the time within which the Commissioners are entitled to take steps for recovering any amount due to them in respect of landfill tax to be disregarded, in such cases as may be described in the regulations, in determining whether any person is under such a duty to pay as is mentioned in sub-paragraph (1)(a) above. The regulations may provide for any limitation on the time within which the Commissioners are entitled to take steps for recovering any amount due to them in respect of any of the taxes under their care and management to be disregarded, in such cases as may be described in the regulations, in determining whether any person is under such a duty to pay as is mentioned in sub-paragraph (1)(a) above.
Where— the Commissioners may, to the best of their judgement, assess the excess paid to that person and notify it to him. Where any person is liable to pay any amount to the Commissioners in pursuance of an obligation imposed by virtue of paragraph 3(4)(a) above, the Commissioners may, to the best of their judgement, assess the amount due from that person and notify it to him. In this paragraph “relevant repayment provision” means—
Where— the Commissioners may, to the best of their judgement, assess the amount so paid to which that person was not entitled and notify it to him. In this paragraph “relevant interest provision” means—
An assessment under paragraph 14 or 15 above shall not be made more than two years after the time when evidence of facts sufficient in the opinion of the Commissioners to justify the making of the assessment comes to the knowledge of the Commissioners. Where an amount has been assessed and notified to any person under paragraph 14 or 15 above, it shall be recoverable (subject to any provision having effect in accordance with paragraph 19 below) as if it were relevant tax due from him. Sub-paragraph (2) above does not have effect if, or to the extent that, the assessment in question has been withdrawn or reduced.
Where an assessment is made under paragraph 14 or 15 above, the whole of the amount assessed shall carry interest at the rate applicable under section 197 of the Finance Act 1996 from the date on which the assessment is notified until payment. Where any person is liable to interest under sub-paragraph (1) above the Commissioners may assess the amount due by way of interest and notify it to him. Without prejudice to the power to make assessments under this paragraph for later periods, the interest to which an assessment under this paragraph may relate shall be confined to interest for a period of no more than two years ending with the time when the assessment under this paragraph is made. Interest under this paragraph shall be paid without any deduction of income tax. A notice of assessment under this paragraph shall specify a date, being not later than the date of the notice, to which the amount of interest is calculated; and, if the interest continues to accrue after that date, a further assessment or assessments may be made under this paragraph in respect of amounts which so accrue. If, within such period as may be notified by the Commissioners to the person liable for interest under sub-paragraph (1) above, the amount referred to in that sub-paragraph is paid, it shall be treated for the purposes of that sub-paragraph as paid on the date specified as mentioned in sub-paragraph (5) above. Where an amount has been assessed and notified to any person under this paragraph it shall be recoverable as if it were relevant tax due from him. Sub-paragraph (7) above does not have effect if, or to the extent that, the assessment in question has been withdrawn or reduced.
If it appears to the Commissioners that the amount which ought to have been assessed in an assessment under paragraph 14, 15 or 17 above exceeds the amount which was so assessed, then— the Commissioners may make a supplementary assessment of the amount of the excess and shall notify the person concerned accordingly.
under the same paragraph as that assessment was made, and
on or before the last day on which that assessment could have been made,
Sections 14 to 16 of the Finance Act 1994 (review and appeals) shall have effect in relation to any decision which— as if that decision were such a decision as is mentioned in section 14(1)(b) of that Act of 1994. Sections 59 and 60 of that Act of 1994 (review and appeal in the case of insurance premium tax) shall have effect in relation to any decision which— as if that decision were a decision to which section 59 of that Act applies. Sections 54 to 56 of the Finance Act 1996 (review and appeal in the case of landfill tax) shall have effect in relation to any decision which— as if that decision were a decision to which section 54 of that Act applies.
In this Part of this Schedule “the Commissioners” means the Commissioners of Customs and Excise. In this Part of this Schedule “relevant tax”, in relation to any assessment, means— For the purposes of this Part of this Schedule notification to a personal representative, trustee in bankruptcy, interim or permanent trustee, receiver, liquidator or person otherwise acting in a representative capacity in relation to another shall be treated as notification to the person in relation to whom he so acts.
In section 197(2) of the Finance Act 1996 (enactments for which interest rates are set under section 197), after paragraph (d) there shall be inserted and
Section 50.
After section 12 of the Finance Act 1994 there shall be inserted the following sections— After section 14(1)(b) of that Act there shall be inserted the following paragraph—. In sections 12(8) and 13(7) of that Act (definition of “representative” for the purposes of sections 12 and 13), for “or trustee in bankruptcy,” there shall be substituted “, trustee in bankruptcy or interim or permanent trustee,”.
After subsection (7) of section 61 of the Customs and Excise Management Act 1979 (duty payable where deficiency or excess deficiency discovered in goods on return of ship or aircraft to United Kingdom) there shall be inserted the following subsection— In subsection (8) of that section (duty payable under subsection (7) recoverable as a civil debt) after “duty” there shall be inserted “, other than excise duty,”. After that subsection there shall be inserted the following subsection— “representative”, in relation to any person from whom the Commissioners assess an amount as being excise duty due, means his personal representative, trustee in bankruptcy or interim or permanent trustee, any receiver or liquidator appointed in relation to him or any of his property or any other person acting in a representative capacity in relation to him;
Section 94 of the Customs and Excise Management Act 1979 shall be amended in accordance with sub-paragraphs (2) to (6) below. In subsection (3) (power to require payment of duty or repayment of drawback or allowance where warehoused goods are deficient), for the words from “require” to the end there shall be substituted the following paragraphs— After subsection (3) there shall be inserted the following subsection— In subsection (4) for “(3)” there shall be substituted “(3)(a)”. After subsection (4) there shall be inserted the following subsections— After subsection (5) there shall be inserted the following subsection— In section 95 of that Act (application of section 94 to certain goods in the course of removal from warehouse), in subsection (2)(b) (section 94 to apply with the omission of references in subsections (3) and (4) to the occupier of the warehouse) for “and (4)” there shall be substituted “, (4) and (4A)”.
Section 96 of the Customs and Excise Management Act 1979 shall be amended in accordance with sub-paragraphs (2) to (6) below. In subsection (2) (power to require payment of unpaid or repaid duty, or repayment of drawback, where goods moved by pipe-line are deficient) for the words from “require” to the end there shall be substituted the following paragraphs— After subsection (2) there shall be inserted the following subsection— In subsection (3) for “(2)” there shall be substituted “(2)(a)”. After subsection (3) there shall be inserted the following subsections— After subsection (5) there shall be inserted the following subsection—
After section 167(4) of the Customs and Excise Management Act 1979 (recovery as a debt due to the Crown or as a civil debt of amounts of duty not paid, and of overpayments in respect of drawback etc. made, by reason of untrue declaration etc.) there shall be inserted the following subsection—
In section 10(3) of the Hydrocarbon Oil Duties Act 1979 (power to recover excise duty where restrictions on use of duty-free oil infringed), for the words from “recover” to the end there shall be substituted “assess an amount equal to the excise duty on like oil at the rate in force at the time of the contravention as being excise duty due from him, and notify him or his representative accordingly.” In section 13(1) of that Act (power to recover rebate where heavy oil is misused), for the words from “recover” to the end there shall be substituted “assess an amount equal to the rebate on like oil at the rate in force at the time of the contravention as being excise duty due from him, and notify him or his representative accordingly.” In section 14(4) of that Act (power to recover rebate where light oil delivered for use as furnace fuel is misused), for the words from “recover” to the end there shall be substituted “assess the amount of rebate allowed on the oil as being excise duty due from him, and notify him or his representative accordingly.” After subsection (1A) of section 23 of that Act (prohibition on use of road fuel gas on which duty has not been paid) there shall be inserted the following subsection— In subsection (2) of that section, for “subsection (1)(b)” there shall be substituted “subsections (1)(b) and (1B)(b)”. After subsection (4) of section 24 of that Act (control of use of duty-free and rebated oil) there shall be inserted the following subsections— In the Table set out in section 27(3) of that Act (interpretation), under the heading “Management Act” there shall be inserted at the appropriate place ““representative””.
This Schedule shall come into force on such day as the Commissioners of Customs and Excise may by order made by statutory instrument appoint; and different days may be appointed under this paragraph for different purposes.
Section 69.
Subject to paragraphs 4 to 7 below, this Schedule applies to any qualifying distribution which— A qualifying distribution of a company falls within this sub-paragraph if it is a payment made by that company— A qualifying distribution of a company falls within this sub-paragraph if— For the purposes of this Schedule the specified matters, in relation to a qualifying distribution, are— In this Schedule—
The Tax Acts shall have effect, and be deemed in relation to any time on or after 8th October 1996 to have had effect, as if a qualifying distribution to which this Schedule applies were a foreign income dividend within the meaning of Chapter VA of Part VI of the Taxes Act 1988 and, accordingly, as if the making of the distribution were the payment of a foreign income dividend. In section 246A of the Taxes Act 1988 (elections for dividends to be treated as foreign income dividends), after subsection (2) there shall be inserted the following subsection— Sub-paragraph (1) above has effect subject to— Sub-paragraph (2) above has effect in relation to the making of elections on or after 8th October 1996.
This paragraph applies where— The relevant part of that distribution (and, accordingly, the corresponding part of the foreign income dividend that paragraph 2(1) above deems the distribution to be) shall be treated for the purposes of the Tax Acts as if it were income to which section 686 of the Taxes Act 1988 (application of rate applicable to trusts to income of certain discretionary trusts) applies. In sub-paragraph (2) above the reference to the relevant part of the distribution is a reference to so much (if any) of that distribution as— Subsection (6) of section 686 of the Taxes Act 1988 (meaning of “trustees” etc.) shall apply for the purposes of this paragraph as it applies for the purposes of that section. This paragraph has effect for the year 1997-98 and subsequent years of assessment and shall be deemed to have had effect for the year 1996-97 in relation to distributions made on or after 5th December 1996.
A qualifying distribution does not fall within paragraph 1(3) above by reason only that it is made in consequence of the exercise of such an option as is mentioned in section 249(1)(a) of the Taxes Act 1988 (option to receive either a cash dividend or additional share capital). Section 251(1)(c) of the Taxes Act 1988 (interpretation of references to the exercise of an option to receive either a cash dividend or additional share capital) shall apply for the purposes of this paragraph as it applies for the purposes of sections 249 and 250 of that Act.
A qualifying distribution consisting in a dividend on a fixed-rate preference share does not fall within paragraph 1(3) above by reason only that any of the specified matters is made referable to the terms on which the share was issued. In this paragraph “fixed-rate preference share” means—
A qualifying distribution which is an excepted pre-sale distribution does not fall within paragraph 1(3) above if the only transactions in securities to which any of the specified matters are referable are relevant transactions. For the purposes of this paragraph, a qualifying distribution of a company is an excepted pre-sale distribution if, in the period beginning with the making of the distribution and ending with the fourteenth day after the day on which the distribution is made, there is a major change in the ownership of that company. For the purposes of sub-paragraph (2) above, there is a major change in the ownership of a company in any period if, in that period— For the purposes of this paragraph a relevant transaction, in relation to any excepted pre-sale distribution, is any transaction in securities by which the holding or, as the case may be, any of the holdings mentioned in sub-paragraph (3) above is acquired. In applying sub-paragraph (3) above— For the purposes of this paragraph, where— then, in considering whether there has been a major change in the ownership of the company, holdings of all kinds of share capital, including preference shares, or of any particular kind of share capital, or voting power or any other special kind of power, shall be taken into account, and holdings of ordinary share capital shall be disregarded, to such extent as may be appropriate. For the purposes of this paragraph, references to ownership shall be construed as references to beneficial ownership, and references to acquisition shall be construed accordingly.
A manufactured dividend shall not be taken to be a qualifying distribution to which this Schedule applies except in pursuance of sub-paragraph (2) below. Where a payment is made which is representative of a qualifying distribution to which this Schedule applies, that payment shall be deemed to be such a distribution for all the purposes of the Tax Acts, except those for which Schedule 23A to the Taxes Act 1988 (manufactured payments) makes provision in relation to the payment which is different from the provision applying to distributions to which this Schedule applies. For the purposes of Schedule 23A to the Taxes Act 1988 a payment which is representative of a payment falling within paragraph 1(2) above shall be treated as if it were representative of a dividend on the shares redeemed, repaid or purchased or, as the case may be, on the shares to which the right relates. In this paragraph “manufactured dividend” has the same meaning as in Schedule 23A to the Taxes Act 1988.
In section 95 of the Taxes Act 1988 (taxation of distributions received by dealers on purchase by a company of its own shares), for subsections (1) to (3) there shall be substituted the following subsections— In that Act— This paragraph has effect in relation to distributions made on or after 26th November 1996.
In section 246G(1)(d) of that Act (information to be provided about a foreign income dividend), after “carries no entitlement to a tax credit” there shall be inserted “and, in the case of a qualifying distribution to which Schedule 7 to the Finance Act 1997 applies, that it is a foreign income dividend by virtue of paragraph 2(1) of that Schedule”. This paragraph has effect in relation to distributions made on or after 26th November 1996.
In subsection (5A) of section 247 of that Act (under which the group income provisions do not apply to FIDs), at the beginning there shall be inserted the words “Subject to subsections (5B) to (5D) below,”; and after that subsection there shall be inserted the following subsections— This paragraph has effect in relation to distributions made on or after 26th November 1996.
In section 468I of that Act (distribution accounts of authorised unit trusts), after subsection (5) there shall be inserted the following subsection— This paragraph applies to distribution accounts for any distribution period ending on or after 26th November 1996.
In section 686 of that Act (application of rate applicable to trusts to income of certain discretionary trusts), paragraph (d) of subsection (2) shall be omitted; and after that subsection there shall be inserted the following subsection— In subsection (2A) of that section, for “subsection (2)(d)” there shall be substituted “subsection (2AA)”. In section 233(1A)(a) of that Act (taxation of non-resident recipients of distributions), for sub-paragraph (ii) there shall be substituted—. This paragraph has effect for the year 1997-98 and subsequent years of assessment and shall be deemed to have had effect for the year 1996-97.
Section 74.
Chapter III of Part VII of the Taxes Act 1988 (the enterprise investment scheme)—
in its application in relation to shares issued after 26th November 1996, and
in its application after 26th November 1996 in relation to shares which— shall have effect with the following amendments.
were issued on or after 1st January 1994 but before 27th November 1996, and
immediately before 27th November 1996 were held by an individual and at that time were shares to which, within the meaning of that Chapter, any relief was attributable,