Finance Act 1986
1. Cigarettes An amount equal to 21 per cent. of the retail price plus £30·61 per thousand cigarettes. 2. Cigars £47·05 per kilogram. 3. Hand-rolling tobacco £49·64 per kilogram. 4. Other smoking tobacco and chewing tobacco £24·95 per kilogram.
This section shall be deemed to have come into force on 21st March 1986.
In section 6(1) of the Hydrocarbon Oil Duties Act 1979 for “£0·1794” (light oil) and “£0·1515” (heavy oil) there shall be substituted “£0·1938” and “£0·1639” respectively.
In subsection (1) of section 11 of that Act (rebate on heavy oil) for paragraphs (a) and (b) there shall be substituted—
For subsection (2) of section 11 of that Act (definition of types of heavy oil), there shall be substituted—
This section shall be deemed to have come into force at 6 o’oclock in the evening of 18th March 1986.
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in Part I, in sub-paragraph (2) of paragraph 6 (farmer's goods vehicle or showman's goods vehicle having a plated gross weight or a plated train weight) in paragraph (b) (weight exceeding 7-5 tonnes but not exceeding 12 tonnes) for "£135" (which applies to farmers' goods vehicles only) there shall be substituted "£155"; and
in Part II, for Tables A(1), C(1) and D(1) (rates for farmers' goods vehicles having plated weight exceeding 12 tonnes) there shall be substituted the Tables set out in Part II of Schedule 1 to this Act.
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the word "accidentally" shall be omitted; and
after the words "subject to" there shall be inserted "subsection (2A) below and to";
After section 49 of the Alcoholic Liquor Duties Act 1979 there shall be inserted the following section—
Schedule 3 to this Act (which contains amendments about warehousing regulations) shall have effect.
The Betting and Gaming Duties Act 1981 (in this section referred to as “the 1981 Act”) shall have effect subject to the amendments in Part I of Schedule 4 to this Act, being amendments designed to extend to Northern Ireland—
the provisions of the 1981 Act relating to general betting duty and pool betting duty (in place of the provisions of Part III of the Miscellaneous Tranferred Excise Duties Act (Northern Ireland) 1972 relating to those duties); ...
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Part II of Schedule 4 to this Act shall have effect for the purpose of making consequential amendments of certain Northern Ireland legislation; and Part III of that Schedule shall have effect for the purpose of extending to Northern Ireland certain subordinate legislation made under the 1981 Act.
Schedule 4 to this Act,—
so far as it relates to general betting duty or pool betting duty, shall come into force on the betting commencement date, but shall not have effect in relation to duty in respect of bets made before that date; ...
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Part III of the Miscellaneous Transferred Excise Duties Act (Northern Ireland) 1972 shall cease to have effect on the betting commencement date except in relation to duty in respect of bets made before that date.
In this section and Schedule 4 to this Act—
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a Gibraltar regulated market within the meaning given by Article 26(11)(b)(i) of that Regulation;
This subsection applies to a collective investment scheme if more than 20% of the market value of the investments in which the property subject to the scheme is invested is attributable to investments which are not exempt investments for the purposes of subsection (5A)(b).
In subsections (5B) and (5C) “collective investment scheme” has the same meaning as in Part 17 of the Financial Services and Markets Act 2000.
For the purposes of subsection (4) above, shares issued by a body corporate which is not incorporated in the United Kingdom (“the foreign company”) are paired with shares issued by a body corporate which is so incorporated (“the UK company”) where —
the articles of association of the UK company and the equivalent instruments governing the foreign company each provide that no share in the company to which they relate may be transferred otherwise than as part of a unit comprising one share in that company and one share in the other, and
such units have been offered for sale to the public in the United Kingdom and, at the same time, an equal number of such units have been offered for sale to the public at a broadly equivalent price in the country in which the foreign company is incorporated.
But “unit trust scheme” does not include arrangements to which section 564G of the Income Tax Act 2007 or section 507 of the Corporation Tax Act 2009 (alternative finance investment bonds) applies.
In interpreting “chargeable securities” in section 93 or 96 above in a case where — are issued in pursuance of an arrangement such as is mentioned in that section (or an arrangement which would be such an arrangement if the securities issued were chargeable securities), paragraph (b) of subsection (4) above and the reference to that paragraph in paragraph (c) of that subsection shall be ignored.
newly subscribed shares, or
securities falling within paragraph (b) or (c) of subsection (3) above which relate to newly subscribed shares,
In subsection (11) above, “newly subscribed shares” means shares issued wholly for new consideration in pursuance of an offer for sale to the public.
Where the calculation of any tax in accordance with the provisions of this Part results in an amount which is not a multiple of one penny, the amount so calculated shall be rounded to the nearest penny, taking any½p as nearest to the next whole penny above.
a regulated market, within the meaning of that Regulation, which is authorised and functions regularly and in accordance with Part 3 of the Financial Services (Markets in Financial Instruments) Act 2018 of Gibraltar;
After section 29 of the Betting and Gaming Duties Act 1981 there shall be inserted the following section—
No excise licence duty shall be chargeable on the grant after 18th March 1986 of an excise licence under any of the provisions of the Alcoholic Liquor Duties Act 1979 (licensing of various activities relating to the production of alcoholic liqour) or under section 2 of the Matches and Mechanical Lighters Duties Act 1979 (licensing of manufacture of matches).
The following enactments shall cease to have effect—
sections 12(2), 18(3), . . . and 75(3) of the Alcoholic Liquor Duties Act 1979 and section 2(2) of the Matches and Mechanical Lighters Duties Act 1979 (which provide for certain excise licences, the duty on which is abolished by subsection (1) above, to expire on a specific date in each year); and
section 81 of the Alcoholic Liquor Duties Act 1979 (under which a licence is required for the leeping or using of a still by any person otherwise than as a distiller, rectifier or compounder).
The holder of a licence under any of the enactments specified in subsection (5) below may suurender the licence to the Commissioners of Customs and Excise at any time.
The Commissioners of Customs and Excise may at any time revoke a licence granted in respect of any premises under any of the enactments specified in subsection (5) below if it appears to them that the holder of the licence has ceased to carry on at those premises the activity in respect of which the licence was granted.
The enactments referred to in subsections (3) and (4) above are—
section 12 of the Alcoholic Liquor Duties Act 1979 (distillers),
section 18 of that Act (rectifiers),
section 47 of that Act (brewers),
section 48 of that Act (persons using premises for adding solutions to beer),
section 54 of that Act (wine producers),
section 55 of that Act (made-wine producers), and
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Schedule 5 to this Act shall have effect for the purpose of supplementing the provisions of this section.
The provisions of this section apply where, in any prescribed accounting period beginning after 6th April 1987, fuel which is or has previously been supplied to or imported or manufactured by a taxable person in the course of his business—
is provided or to be provided by the taxable person to an individual for private use in his own vehicle or a vehicle allocated to him and is so provided by reason of that individual's employment; or
where the taxable person is an individual, is appropriated or to be appropriated by him for private use in his own vehicle; or
where the taxable person is a partnership, is provided or to be provided to any of the individual partners for private use in his own vehicle.
For the purposes of this section fuel shall not be regarded as provided to any person for his private use if it is supplied at a price which.—
in the case of fuel supplied to or imported by the taxable person, is not less than the price at which it was so supplied or imported; and
in the case of fuel manufactured by the taxable person, is not less than the aggregate of the cost of the raw material and of manufacturing together with any excise duty thereon.
For the purposes of this section and Schedule 6 to this Act—
"fuel for private use" means fuel which, having been supplied to or imported or manufactured by a taxable person in the course of his business, is or is to be provided or appropriated for private use as mentioned in subsection (1) above;
any reference to an individual's own vehicle shall be construed as including any vehicle of which for the time being he has the use, other than a vehicle allocated to him;
subject to subsection (9) below, a vehicle shall at any time be taken to be allocated to an individual if at that time it is made available (without any transfer of the property in it) either to the individual himself or to any other person, and is so made available by reason of the individual's employment and for private use; and
fuel provided by an employer to an employee and fuel provided to any person for private use in a vehicle which, by virtue of paragraph (c) above, is for the time being taken to be allocated to the employee shall be taken to be provided to the employee by reason of his employment.
Where under section 29 of the principal Act any bodies corporate are treated as members of a group, any provision of fuel by a member of the group to an individual shall be treated for the purposes of this section as provision by the representative member.
In relation to the taxable person, tax on the supply or importation of fuel for private use shall be treated for the purposes of the principal Act as input tax, notwithstanding that the fuel is not used or to be used for the purposes of a business carried on by the taxable person (and, accordingly, no apportionment of tax shall fall to be made under section 14(4) of that Act by reference to fuel for private use).
At the time at which fuel for private use is put into the fuel tank of an individual's own vehicle or of a vehicle allocated to him, the fuel shall be treated for the purposes of the principal Act as supplied to him by the taxable person in the course or furtherance of his business for a consideration determined in accordance with subsection (7) below (and, accordingly, where the fuel is appropriated by the taxable person to his own private use, he shall be treated as supplying it to himself in his private capacity).
In any prescribed accounting period of the taxable person in which, by virtue of subsection (6) above, he is treated as supplying fuel for private use to an individual, the consideration for all the supplies made to that individual in that period in respect of any one vehicle shall be that which, by virtue of Schedule 6 to this Act, is appropriate to a vehicle of that description, and that consideration shall be taken to be inclusive of tax.
In any case where.— subsection (7) above shall have effect as if the supplies made to the individual during those parts of the period were in respect of only one vehicle.
in any prescribed accounting period, fuel for private use is, by virtue of subsection (6) above, treated as supplied to an individual in respect of one vehicle for a part of the period and in respect of another vehicle for another part of the period; and
at the end of that period one of those vehicles neither belongs to him nor is allocated to him,
In any prescribed accounting period a vehicle shall not be regarded as allocated to an individual by reason of his employment if—
in that period it was made available to, and actually used by, more than one of the employees of one or more employers and, in the case of each of them, it was made available to him by reason of his employment but was not in that period ordinarily used by any one of them to the exclusion of the others; and
in the case of each of the employees, any private use of the vehicle made by him in that period was merely incidental to his other use of it in that period; and
it was in that period not normally kept overnight on or in the vicinity of any residential premises where any of the employees was residing, except while being kept overnight on premises occupied by the person making the vehicle available to them.
In this section and Schedule 6 to this Act—
“recognised foreign exchange” and “recognised foreign options exchange” have the meanings given, respectively, by subsections (3) and (4) of section 80B above;
"the principal Act" means the Value Added Tax Act 1983;
“control” has the meaning given in section 1124 of the Corporation Tax Act 2010;
“collective investment scheme” has the meaning given in section 75 of the Financial Services Act 1986;
an invalid carriage as defined in section 190(5) of that Act or, for Northern Ireland, in Article 37(1)(g) of that Order.
This section and Schedule 6 to this Act shall be construed as one with the principal Act.
In Schedule 1 to the Value Added Tax Act 1983 (registration) after paragraph 1 there shall be inserted the following paragraph—
In section 40 of the Value Added Tax Act 1983 (appeals), in subsection (1), after paragraph (h) there shall be inserted the following paragraph—.
In the said section 40, for the words from the beginning of subsection (3A) to "paragraph (m) above" there shall be substituted—.
In paragraph 9 of Schedule 4 to the Value Added Tax Act 1983 (reduced value provision applicable to supply of accommodation in hotels etc. for periods exceeding four weeks) for the words preceding paragraph (a) there shall be substituted—.
This section applies to a supply of services on or after 1st November 1986.
In section 16 of the Value Added Tax Act 1983 (zero-rating) at the end of subsection (6) (goods exported or shipped as stores, etc.) there shall be added the words "and, in either case, if such other conditions, if any, as may be specified in regulations or the Commissioners may impose are fulfilled."
In subsection (9) of that section—
after the words "zero-rated" there shall be inserted "by virtue of subsection (6) above or";
in paragraph (a) after the word "exported" there shall be inserted "or shipped"; and
in paragraph (b) for the word "regulations" there shall be substituted "relevant regulations under subsection (6), (7) or (8) above".
Where it appears to the Commissioners— the Commissioners may serve a notice under this section on the body corporate and on the named officer.
that a body corporate is liable to a penalty under section 13 of the Finance Act 1985 (civil penalty for value added tax evasion where conduct involves dishonesty), and
that the conduct giving rise to that penalty is, in whole or in part, attributable to the dishonesty of a person who is, or at the material time was, a director or managing officer of the body corporate (in this section referred to as a "named officer"),
A notice under this section shall state—
the amount of the penalty referred to in subsection (1)(a) above (in this section referred to as "the basic penalty"); and
that the Commissioners propose, in accordance with this section, to recover from the named officer such portion (which may be the whole) of the basic penalty as is specified in the notice.
Where a notice is served under this section, the portion of the basic penalty specified in the notice shall be recoverable from the named officer as if he were personally liable under section 13 of the Finance Act 1985 to a penalty which corresponds to that portion; and the amount of that penalty may be assessed and notified to him accordingly under section 21 of that Act.
Where a notice is served under this section.—
the amount which, under section 21 of the Finance Act 1985, may be assessed as the amount due by way of penalty from the body corporate shall be only so much (if any) of the basic penalty as is not assessed on and notified to a named officer by virtue of subsection (3) above; and
the body corporate shall be treated as discharged from liability for so much of the basic penalty as is so assessed and notified.
No appeal shall lie against a notice under this section as such but.—
where a body corporate is assessed as mentioned in subsection (4)(a) above, the body corporate may appeal against the Commissioners' decision as to its liability to a penalty and against the amount of the basic penalty as if it were specified in the assessment; and
where an assessment is made on a named officer by virtue of subsection (3) above, the named officer may appeal against the Commissioners' decision that the conduct of the body corporate referred to in subsection (1)(b) above is, in whole or part, attributable to his dishonesty and against their decision as to the portion of the penalty which the Commissioners propose to recover from him.
For the purposes of the Value Added Tax Act 1983, any appeal brought by virtue of subsection (5) above shall be treated as an appeal under section 40 of that Act; and the reference in subsection (1A) of that section to an amount assessed by way of penalty includes a reference to an amount assessed by virtue of subsection (3) or subsection (4)(a) above.
The provisions that may be included in rules under paragraph 9 of Schedule 8 to the Value Added Tax Act 1983 (procedure on appeals to value added tax tribunals) include provision with respect to the joinder of appeals brought by different persons where a notice is served under this section and the appeals relate to, or to different portions of, the basic penalty referred to in the notice.
In this section a "managing officer", in relation to a body corporate, means any manager, secretary or other similar officer of the body corporate or any person purporting to act in any such capacity or as a director; and where the affairs of a body corporate are managed by its members, this section shall apply in relation to the conduct of a member in connection with his functions of management as if he were a director of the body corporate.
This section does not apply where the conduct of the body corporate giving rise to the penalty took place before the passing of this Act.
In section 17 of the Finance Act 1985 (civil penalties for breaches of regulatory provisions under the Value Added Tax Act 1983) at the end of paragraph (c) of subsection (1) there shall be inserted or.
At the end of subsection (4)(b) of that section (previous failures before the passing of the 1985 Act to be disregarded in determining rate of daily penalty) there shall be added "or, in the case of a requirement falling within paragraph (d) or paragraph (e) of subsection (1) above, before the passing of the Finance Act 1986".
Income tax for the year 1986-87 shall be charged at the basic rate of 29 per cent.; and in respect of so much of an individual's total income as exceeds the basic rate limit (£17,200) at such higher rates as are specified in the Table below: Higher rate bands Higher rate per cent. The first £3,000 40 The next £5,200 45 The next £7,900 50 The next £7,900 55 The remainder 60 and paragraphs (a) and (b) of subsection (1) of section 32 of the Finance Act 1971 (charge of tax at the basic and higher rates) shall have effect accordingly.
Section 24(4) of the Finance Act 1980 (indexation of thresholds) shall not, so far as it relates to the higher rate bands, apply for the year 1986—87.
For the financial year 1986 and any subsequent financial year, the rate of advance corporation tax shall be fixed by the fraction— where I is the percentage at which income tax at the basic rate is charged for the year of assessment which begins on 6th April in that financial year; and in the following provisions of this section that percentage is referred to, in relation to a particular financial year, as "the basic rate percentage for the appropriate year of assessment".
If, at the beginning of any financial year, the basic rate percentage for the appropriate year of assessment has not been determined (whether under the Provisional Collection of Taxes Act 1968 or otherwise), then, subject to subsection (3) below, advance corporation tax in respect of distributions made in that financial year shall be payable under Schedule 14 to the Finance Act 1972 and may be assessed under that Schedule according to the rate of advance corporation tax fixed for the previous financial year.
Subsection (2) above does not apply with respect to any distribution made in a financial year after— whichever is the earlier.
the date on which is determined the basic rate percentage for the appropriate year of assessment; or
5th August in that year,
If a rate of advance corporation tax for any financial year is not fixed, under subsection (1) above or any other enactment, or if advance corporation tax for any financial year is charged otherwise than as it has been paid or assessed, the necessary adjustment shall be made by discharge or repayment of tax or by a further assessment.
In subsection (2) of section 84 of the Finance Act 1972 (the rate of advance corporation tax) for the words from "for the period" onwards there shall be substituted "for the financial year 1986 and subsequent financial years shall be determined in accordance with section 17 of the Finance Act 1986".
In section 103 of the Finance Act 1972 (charge of advance corporation tax at previous rate until new rate is fixed and change of rate) subsections (1) to (3) shall cease to have effect.
Section 37(2) of the Finance Act 1974 (tax on company in liquidation to be based on Resolution fixing the rate of advance corporation tax) shall cease to have effect.
For the financial year 1986 the small companies rate shall be 29 per cent.
For the financial year 1986, the fraction mentioned in section 95(2) of the Finance Act 1972 (marginal relief for small companies) shall be three two-hundreths.
For the year 1986-87, in subsection (7) of section 24 of the Finance Act 1980 (which specifies the date from which indexed changes in income tax thresholds and allowances are to be brought into account for the purposes of PAYE) for "5th May" there shall be substituted "18th May".
For the year 1986-87 the qualifying maximum referred to in paragraphs 5(1) and 24(3) of Schedule 1 to the Finance Act 1974 (limit on relief for interest on certain loans for the purchase or improvement of land) shall be £30,000.
Section 69(4) of the Finance (No. 2) Act 1975 (which requires deductions to be made from payments to certain subcontractors in the construction industry) shall have effect in relation to payments made on or after 6th November 1986 with the substitution for the words "30 per cent." of the words "29 per cent.".
In Schedule 9 to the Finance Act 1978 (approved profit snaring schemes) in paragraph 7 (conditions as to the shares)—
in paragraph (c) after the word "class" there shall be added the words "or a restriction authorised by subparagraph (2) below"; and
at the end there shall be added the sub-paragraphs set out in subsection (4) below followed by the additional sub-paragraph set out in subsection (5) below.
In Schedule 10 to the Finance Act 1980 (savings-related share option schemes) in paragraph 17 (conditions as to the scheme shares)—
in paragraph (c) after the word "class" there shall be added the words "or a restriction authorised by subparagraph (2) below"; and
at the end there shall be added the sub-paragraphs set out in subsection (4) below.
In Schedule 10 to the Finance Act 1984 (approved share option schemes) in paragraph 9 (conditions as to scheme shares)
in paragraph (c) after the word "class" there shall be added the words "or a restriction authorised by subparagraph (2) below"; and
at the end there shall be added the sub-paragraphs set out in subsection (4) below.
The sub-paragraphs referred to in subsections (1)(b), (2)(b) and (3)(b) above are—
The additional sub-paragraph referred to in subsection (1)(b) above is—
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In this section—
"the 1978 Schedule" means Schedule 9 to the Finance Act 1978 (approved profit sharing schemes);
“multilateral trading facility” has the meaning given in section 80B(2);
"the 1984 Schedule" means Schedule 10 to the Finance Act 1984 (approved share option schemes).
In each of the following provisions (which govern the eligibility of shares)— there shall be made the amendments in subsection (3) below.
paragraph 8 of the 1978 Schedule,
paragraph 19 of the 1980 Schedule,
paragraph 11 of the 1984 Schedule,
After the words "of the same class" there shall be inserted "either must be employee-control shares or" and at the end there shall be added the following sub-paragraph—
In the following enactments (which exclude from provisions about restrictions attaching to shares provisions which are derived from a Model Code issued by The Stock Exchange in April 1981), namely— for "April 1981" there shall be substituted "November 1984".
section 41 of the Finance Act 1982 (which relates to the 1980 Schedule and also to Schedule 8 to the Finance Act 1973-share option and share incentive schemes), and
paragraph 10(2) of the 1984 Schedule,
For the purpose of bringing the definition of a member of a consortium in the 1978 Schedule and the 1980 Schedule into line with that in the 1984 Schedule for the words "not more than five" there shall be substituted "a number of.
in paragraph 17 of the 1978 Schedule, and
in paragraph 26(5) of the 1980 Schedule,
In each of the 1978 Schedule, the 1980 Schedule and the 1984 Schedule, "recognised stock exchange" has the same meaning as in the Corporation Tax Acts.
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In paragraph 7 of that Schedule (conditions as to shares) for paragraph (b) there shall be substituted the following paragraph—.
In section 54 of the Finance Act 1978 (the period of retention etc.)—
at the end of subsection (1)(d) there shall be added "or, in the case of redeemable shares in a workers' co-operative, as denned in Schedule 9 to this Act, by redemption"; and
at the end of subsection (4) there shall be added or
Where, for the purpose of securing (and maintaining) approval of its profit sharing scheme in accordance with Part I of Schedule 9 to the Finance Act 1978, the rules of a society which is a workers’ co-operative or which is seeking to be registered under the industrial and provident societies legislation as a workers’ co-operative contain— those provisions shall be disregarded in determining whether the society should be or continue to be registered under the industrial and provident societies legislation as a bona fide co-operative society.
provision for membership of the society by the trustees of the scheme,
provision denying voting rights to those trustees, or
other provisions which appear to the registrar to be reasonably necessary for that purpose,
In subsection (4) above “the industrial and provident societies legislation” means— and “registrar” has the same meaning as in that Act and “co-operative society” has the same meaning as in section 1 of that Act.
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the Industrial and Provident Societies Act (Northern Ireland) 1969,
Schedule 10 to the Finance Act 1980 (savings-related share option schemes) shall be amended in accordance with subsections (2) to (7) below.
Paragraph 2 (schemes may be approved conditionally upon satisfaction as to acquisition price of scheme shares) shall cease to have effect.
In paragraph 8 (provisions as to exercising rights where a person ceases to be eligible to participate in schemes) after the words "may not be exercised at all" there shall be inserted the words "except pursuant to such a provision of the scheme as is specified in paragraph 10(1)(e) below".
At the end of sub-paragraph (1) of paragraph 10 (cases where a scheme may allow options to be exercised after certain events) there shall be added the following paragraph.
In paragraph 12 (supplementary provision as to ceasing to be employed) after the words "paragraph 8" there shall be inserted "or paragraph 10(1)(e)".
In paragraph 21 (eligibility to participate restricted to current directors and employees) after the words "paragraph 8 above" there shall be inserted "or pursuant to such a provision as is referred to in paragraph 10(1)(e) above".
Paragraph 22 (which restricts eligibility to participate in one scheme where, in the same year of assessment, rights have been obtained under another scheme) shall cease to have effect and, accordingly, in paragraph 20 for the words "paragraphs 22 and 23" there shall be substituted "paragraph 23".
Where an existing scheme is altered before 1st August 1988 so as to include such a provision as is specified in paragraph 10(1)(e) of Schedule 10 to the Finance Act 1980 (as amended by this section), the scheme as altered may by virtue of this section apply that provision to rights obtained under the scheme before the date on which the alteration takes effect, and where that provision is so applied in relation to such rights,
the scheme may permit a person having such rights to take advantage of the provision, notwithstanding that under the scheme he would otherwise be unable to exercise those rights after he has ceased to hold the office or employment in question; and
if, before the date on which the alteration takes effect, a person who held such rights on 18th March 1986 ceases, in either of the circumstances set out in the said paragraph 10(1)(e), to hold an office or employment by virtue of which he was eligible to participate in the scheme, then, so far as concerns the rights so held, the scheme may permit him to take advantage of the provision in question as if the alteration had been made immediately before he ceased to hold that office or employment; and
the application of the provision shall not itself be regarded as the acquisition of a right for the purposes of the said Schedule 10.
In subsection (8) above "an existing scheme" means a scheme approved under Schedule 10 to the Finance Act 1980 before 1st August 1986; and that subsection has effect subject to paragraph 3(2) of that Schedule (approval of Board required for alteration in scheme).
In section 186 of the Taxes Act (directors and employees granted rights to acquire shares), after subsection (5) there shall be inserted the following subsections—
receives written notice of the assignment of such a right or provides any benefit in money or money's worth— it shall
In section 79 of the Finance Act 1972 (share incentive schemes) after subsection (5) there shall be inserted the following subsections—
In subsection (6)(c) of the said section 79 (the period at the end of which a charge to tax arises)—
for the words "the shares cease" there shall be substituted "by reason of the shares ceasing"; and
at the end there shall be added the words "either of the conditions in subsection (2)(c) above would be satisfied in relation to the shares if they had been acquired at that time".
After subsection (6) of the said section 79 there shall be inserted the following subsection—
In this section—
subsections (1) and (2) above have effect where a benefit is received after 18th March 1986;
subsection (3) above has effect where the acquisition of additional shares or the interest in shares is after that date;
subsection (4) above has effect where the shares cease to be subject to restrictions after that date; and
subsection (5) above has effect where the shares which constitute the new holding are acquired after that date.
This section applies where an individual (the employee) is entitled to receive payments from which income tax falls to be deducted by virtue of section 204 of the Taxes Act and regulations under that section (PAYE), and the person liable to make the payments (the employer) withholds sums from them.
If the conditions mentioned in subsections (3) to (7) below are fulfilled the sums shall, in assessing tax under Schedule E, be allowed to be deducted as expenses incurred in the year of assessment in which they are withheld.
The sums must be withheld in accordance with a scheme which is (or is of a kind) approved by the Board at the time they are withheld and which either contains provisions falling within subsection (4)(a) below, or contains provisions falling within subsection (4)(a) below and provisions falling within subsection (4)(b) below.
The provisions are that—
the employer is to pay sums withheld to a person (the agent) who is approved by the Board at the time they are withheld, and the agent is to pay them to a charity or charities; ,
the employer is to pay sums withheld directly to a charity which (or charities each of which) is at the time the sums are withheld approved by the Board as an agent for the purpose of paying sums to other charities.
The sums must be withheld in accordance with a request by the employee that they be paid to a charity or charities in accordance with a scheme approved (or of a kind approved) by the Board.
The sums must constitute gifts by the employee to the charity or charities concerned, must not be paid by the employee under a covenant, and must fulfil any conditions set out in the terms of the scheme concerned.
The sums must not in any year of assessment exceed £100 in the case of any employee (however many offices or employments he holds or has held).
In this section "charity" has the same meaning as in section 360 of the Taxes Act.
This section has effect in relation to sums withheld in the year 1987-88 or any subsequent year of assessment.
The circumstances in which the Board may for the purposes of section 27 above grant or withdraw approval of schemes (or kinds of scheme) or of agents shall be such as are prescribed by the Treasury by regulations.
The circumstances so prescribed (whether relating to the terms of schemes or the qualifications of agents or otherwise) shall be such as the Treasury think fit.
The Treasury may by regulations make provision—
that a participating employer or agent shall comply with any notice which is served on him by the Board and which requires him within a prescribed period to make available for the Board's inspection documents of a prescribed kind or records of a prescribed kind;
that a participating employer or agent shall in prescribed circumstances furnish to the Board information of a prescribed kind;
for, and with respect to, appeals to the Special Commissioners against the Board's refusal to grant, or their withdrawal of, approval of any scheme (or kind of scheme) or agent;
generally for giving effect to section 27 above.
For the purposes of subsection (3) above a person is a participating employer or agent if he is an employer (within the meaning of section 27 above) or agent (within the meaning of that section) who participates, or has at any time participated, in a scheme under that section.
In subsection (3) above "prescribed" means prescribed by the regulations.
The words "Regulations under section 28 of the Finance Act 1986" shall be added at the end of each column in the Table in section 98 of the Taxes Management Act 1970 (penalties for failure to furnish information etc.).
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.
On a claim made by a company which is resident in the United Kingdom and is not a close company, a qualifying donation made by the company shall, subject to the provisions of this section, constitute a charge on the income of the company for the purposes of section 248 of the Taxes Act.
Subject to subsection (3) below, a qualifying donation is a payment made by the company to a charity, other than—
a covenanted payment to charity, as defined in section 434(2) of the Taxes Act; and
a payment which is deductible in computing profits or any description of profits for purposes of corporation tax.
A payment made by a company is not a qualifying donation unless, on the making of it, the company deducts out of it a sum representing the amount of income tax thereon; and in section 55(1) of the Taxes Act (certificates of deduction) after the words "Finance Act 1973" there shall be inserted "or section 29 of the Finance Act 1986".
Where, with a view to securing relief under this section, a company makes a payment subject to such a deduction as is mentioned in subsection (3) above, then, whether or not it proves to be a qualifying donation, the payment—
shall be treated as a "relevant payment" for the purposes of Schedule 20 to the Finance Act 1972 (collection of income tax on company payments which are not distributions); and
shall in the hands of the recipient (whether a charity or not) be treated for the purposes of the Taxes Act as if it were an annual payment.
In any accounting period of a company, the maximum amount allowable under section 248 of the Taxes Act in accordance with subsection (1) above in respect of qualifying donations made by the company shall be a sum equal to 3 per cent, of the dividends paid on the company's ordinary share capital in that accounting period.
In this section "charity" includes— and, subject to paragraphs (a) to (e) above, "charity" has the same meaning as in section 360 of the Taxes Act.
the Trustees of the British Museum;
the Trustees of the British Museum (Natural History);
the Trustees of the National Heritage Memorial Fund;
the Historic Buildings and Monuments Commission for England; and
any Association of a description specified in section 362 of the Taxes Act (scientific research associations);
This section applies to payments made on or after 1st April 1986 and, in the case of a company whose accounting period begins before and ends on or after that date, the period beginning on that date and ending at the end of that accounting period shall be deemed to be an accounting period for the purpose of applying the limit in subsection (5) above.
Any payment which— shall be chargeable to tax under Case III of Schedule D but shall be eligible for relief from tax under section 360(1)(c) of the Taxes Act as if it were an annual payment.
on or after 12th June 1986 is received by a charity from another charity, and
is not made for full consideration in money or money's worth, and
is not chargeable to tax apart from this subsection, and
is not, apart from this subsection, of a description which (on a claim) would be eligible for relief from tax by virtue of any provision of section 360(1) of the Taxes Act,
In section 248 of the Taxes Act (allowance of charges on income) after subsection (8) there shall be inserted the following subsection—
In this section "charity" has the same meaning as in section 360 of the Taxes Act.
If in any chargeable period of a charity— relief under the enactments conferring exemption from tax shall not be available for so much of the excess referred to in paragraph (b) above as does not exceed the non-qualifying expenditure incurred in that period.
its relevant income and gains are not less than £10,000 and
its relevant income and gains exceed the amount of its qualifying expenditure, as denned in Part I of Schedule 7 to this Act, and
the charity incurs, or is treated by virtue of any of the following provisions of this section as incurring, nonqualifying expenditure, that is to say, expenditure which is not qualifying expenditure as denned in the said Part I,
In relation to a chargeable period of less than twelve months, subsection (1) above shall have effect as if the amount specified in paragraph (a) of that subsection were proportionately reduced.
In this section—
"charity" has the same meaning as in section 360 of the Taxes Act;
"covenanted payment to charity" shall be construed in accordance with section 434(2) of the Taxes Act;
"the enactments conferring exemption from tax" means subsection (1) of the said section 360 (income) and section 145 of the Capital Gains Tax Act 1979 (gains); and
"relevant income and gains" means—
income which, apart from subsection (1) of the said section 360, would not be exempt from tax, together with any income which is taxable notwithstanding that subsection; and
gains which, apart from the said section 145, would be chargeable gains, together with any gains which are chargeable gains notwithstanding that section.
If in any chargeable period a charity— then, subject to subsection (5) below, the amount so invested or lent in that period shall be treated for the purposes of this section as being an amount of expenditure incurred by the charity and, accordingly, as being non-qualifying expenditure.
invests any of its funds in an investment which is not a qualifying investment, as denned in Part II of Schedule 7 to this Act, or
makes a loan (not being an investment) which is not a qualifying loan, as denned in Part III of that Schedule,
If, in any chargeable period, a charity which has in that period made an investment or loan falling within subsection (4) above.— any further investment or lending in that period of the sum realised or repaid shall, to the extent that it does not exceed the sum originally invested or lent, be left out of account in determining the amount which, by virtue of subsection (4) above, is treated as non-qualifying expenditure incurred in that period.
realises the whole or part of that investment, or
is repaid the whole or part of that loan,
If the aggregate of the qualifying and non-qualifying expenditure incurred by a charity in any chargeable period exceeds the relevant income and gains of that period, Part IV of Schedule 7 to this Act shall have effect to treat, in certain cases, some or all of that excess as non-qualifying expenditure incurred in earlier periods.
Where, by virtue of this section, there is an amount of a charity's relevant income and gains for which relief under the enactments conferring exemption from tax is not available, the charity may, by notice in writing to the Board, specify which items of its relevant income and gains are, in whole or in part, to be attributed to that amount and, for this purpose, all covenanted payments to the charity shall be treated as a single item; and if, within thirty days of being required to do so by the Board, a charity does not give notice under this subsection, the items of its relevant income and gains which are to be attributed to the amount in question shall be such as the Board may determine.
Where it appears to the Board that two or more charities acting in concert are engaged in transactions of which the main purpose or one of the main purposes is the avoidance of tax (whether by the charities or any other person), the Board may by notice in writing given to the charities provide that, for such chargeable periods as may be specified in the notice, subsection (1) above shall have effect in relation to them with the omission of paragraph (a).
An appeal may be brought against a notice under subsection (8) above as if it were notice of the decision of the Board on a claim made by the charities concerned.
Subsections (1) to (9) above have effect for chargeable periods ending after 11th June 1986; but where a chargeable period of a charity begins before and ends after that date, the charity may by notice in writing given to the Board elect that, for the purposes of subsections (1) to (9) above, that chargeable period shall be treated as two separate chargeable periods, the second of which begins on 12th June 1986 and ends at the end of that chargeable period.
In Schedule 7 to this Act "the principal section" means this section and other expressions have the same meaning as in this section.
In section 457 of the Taxes Act (settlements made on or after 7th April 1965) in subsection (1A) (which allows higher rate relief for covenanted payments to charities up to £10,000 in any year of assessment)—
at the beginning there shall be inserted the words "Subject to subsection (1B) below"; and
the words "and does not exceed £10,000 in any year of assessment" shall be omitted.
After subsection (1A) of that section there shall be inserted the following subsections—
In Schedule 16 to the Finance Act 1972 (apportionment of income of close companies to participators) in paragraph 5(5A) (effect of covenanted payments to charities) after the words "year of assessment" there shall be inserted "then, except in so far as any such sum is referable to a payment which, if made by the individual, would be treated by virtue of subsection (1) of section 457 of the Taxes Act as the income of the individual for the purposes of excess liability (within the meaning of that subsection)" and for the words from "by whichever is the lesser of to the end of paragraph (b) there shall be substituted "by the amount of that sum or those sums".
This section has effect for the year 1986-87 and subsequent years of assessment.
Section 32 of the Finance Act 1977 (expenses in connection with work done abroad) shall be amended in accordance with subsections (2) to (6) below.
In subsection (2) (travel from UK and back) after the words "travelling from" there shall be inserted "any place in" and for the words "returning to" there shall be substituted "travelling to any place in".
In subsection (6) (journeys to or by spouse or child)—
for the words "between the United Kingdom and the place of performance of those duties" there shall be substituted "between any place in the United Kingdom and the place of performance of any of those duties outside the United Kingdom",
paragraph (b), and in paragraph (c) the words "or (b)", shall be omitted, and
for the words "journeys in each direction" there shall be substituted "outward and two return journeys".
After subsection (6) there shall be inserted—
In subsection (7)(a) for the words "such journey" there shall be substituted "journey to which this subsection applies" and in subsection (7)(b) for the words "such office or employment" there shall be substituted "office or employment mentioned in subsection (6), (6A) or (6C) above".
After subsection (7) there shall be inserted—
In section 184(3) of the Taxes Act after the words "subject to" there shall be inserted "section 32(7A) of and".
This section has effect for the year 1984-85 and subsequent years of assessment and all such adjustments (whether by repayment of tax or otherwise) shall be made as are appropriate to give effect to this section.
This section applies in the case of a trade, profession or vocation carried on wholly outside the United Kingdom by an individual (the taxpayer) who does not satisfy the Board as mentioned in section 122(2)(a) of the Taxes Act; and it is immaterial in the case of a trade or profession whether the taxpayer carries it on solely or in partnership.
Expenses of the taxpayer— shall, subject to subsections (3) and (4) below, be treated for the purposes of section 130(a) of the Taxes Act (deductions) as having been wholly and exclusively expended for the purposes of the trade, profession or vocation.
in travelling from any place in the United Kingdom to any place where the trade, profession or vocation is carried on,
in travelling to any place in the United Kingdom from any place where the trade, profession or vocation is carried on, or
on board and lodging for the taxpayer at any place where the trade, profession or vocation is carried on,
Subsection (2) above does not apply unless the taxpayer's absence from the United Kingdom is occasioned wholly and exclusively for the purpose of performing the functions of the trade, profession or vocation or of performing those functions and the functions of any other trade, profession or vocation (whether or not one in the case of which this section applies).
Where subsection (2) above applies and more than one trade, profession or vocation in the case of which this section applies is carried on at the place in question, the expenses shall be apportioned on such basis as is reasonable between those trades, professions or vocations, and the expenses so apportioned to a particular trade, profession or vocation shall be treated for the purposes of section 130(a) of the Taxes Act as having been wholly and exclusively expended for the purposes of that trade, profession or vocation.
Where the taxpayer is absent from the United Kingdom for a continuous period of 60 days or more wholly and exclusively for the purpose of performing the functions of one or more trades, professions or vocations in the case of which this section applies, expenses to which subsection (6) below applies shall be treated in accordance with subsection (7) or (8) below (as the case may be).
This subsection applies to the expenses of any journey by the taxpayer's spouse, or any child of his, between any place in the United Kingdom and the place of performance of any of those functions outside the United Kingdom, if the journey— but this subsection does not apply to more than two outward and two return journeys by the same person in any year of assessment.
is made in order to accompany him at the beginning of the period of absence or to visit him during that period, or
is a return journey following a journey falling within paragraph (a) above,
The expenses shall be treated for the purposes of section 130(a) of the Taxes Act as having been wholly and exclusively expended for the purposes of the trade, profession or vocation concerned (if there is only one).
The expenses shall be apportioned on such basis as is reasonable between the trades, professions or vocations concerned (if there is more than one) and the expenses so apportioned to a particular trade, profession or vocation shall be treated for the purposes of section 130(a) of the Taxes Act as having been wholly and exclusively expended for the purposes of that trade, profession or vocation.
In subsection (6) above "child" includes a stepchild, an adopted child and an illegitimate child but does not include a person who is aged 18 or over at the beginning of the outward journey.
Nothing in this section shall permit the same sum to be deducted for more than one trade, profession or vocation in respect of expenses in computing profits or gains.
This section applies to expenses incurred after 5th April 1984 and all such adjustments (whether by repayment of tax or otherwise) shall be made as are appropriate to give effect to this section.
Where a taxpayer, within the meaning of section 35 above, travels between a place where he carries on a trade, profession or vocation in the case of which that section applies and a place outside the United Kingdom where he carries on another trade, profession or vocation (whether or not one in the case of which that section applies) expenses of the taxpayer on such travel shall, subject to subsections (3) to (5) below, be treated for the purposes of section 130(a) of the Taxes Act as having been wholly and exclusively expended for the purposes of the trade, profession or vocation mentioned in subsection (2) below.
The trade, profession or vocation is
the one carried on at the place of the taxpayer's destination, or
if that trade, profession or vocation is not one in the case of which section 35 above applies, the one carried on at the place of his departure.
This section does not apply unless the journey was made
after performing functions of the trade, profession or vocation carried on at the place of departure, and
for the purpose of performing functions of the trade, profession or vocation carried on at the place of destination.
This section does not apply unless the taxpayer's absence from the United Kingdom is occasioned wholly and exclusively for the purpose of performing the functions of both the trades, professions or vocations concerned or of performing those functions and the functions of any other trade, profession or vocation.
Where this section applies and more than one trade, profession or vocation in the case of which section 35 above applies is carried on at the place of the taxpayer's destination or (in a case falling within subsection (2)(b) above) at the place of his departure, the expenses shall be apportioned on such basis as is reasonable between those trades, professions or vocations, and the expenses so apportioned to a particular trade, profession or vocation shall be treated for the purposes of section 130(a) of the Taxes Act as having been wholly and exclusively expended for the purposes of that trade, profession or vocation.
Nothing in this section shall permit the same sum to be deducted for more than one trade, profession or vocation in respect of expenses in computing profits or gains.
This section applies to expenses incurred after 5th April 1984 and all such adjustments (whether by repayment of tax or otherwise) shall be made as are appropriate to give effect to this section.
Subject to subsection (2) below, this section applies in the case of an office or employment in respect of which a person (the employee) who is not domiciled in the United Kingdom is in receipt of emoluments for duties performed in the United Kingdom.
This section does not apply unless subsection (3) below is satisfied in respect of a date on which the employee arrives in the United Kingdom to perform duties of the office or employment; and where subsection (3) is so satisfied, this section applies only for a period of five years beginning with that date.
This subsection is satisfied in respect of a date if the employee—
was not resident in the United Kingdom in either of the two years of assessment immediately preceding the year of assessment in which the date falls, or
was not in the United Kingdom for any purpose at any time during the period of two years ending with the day immediately preceding the date.
Where subsection (3) above is satisfied (by virtue of paragraph (a) of that subsection) in respect of more than one date in any year of assessment, only the first of those dates is relevant for the purposes of this section.
Subsection (7) below applies to any journey by the employee—
from his usual place of abode to any place in the United Kingdom in order to perform any duties of the office or employment there, or
to his usual place of abode from any place in the United Kingdom after performing such duties there.
Where the employee is in the United Kingdom for a continuous period of 60 days or more for the purpose of performing the duties of one or more offices or employments in the case of which this section applies, subsection (7) below applies to any journey by his spouse, or any child of his, between his usual place of abode and the place of performance of any of those duties in the United Kingdom, if the journey— but subsection (7) as it applies by virtue of this subsection does not extend to more than two journeys to the United Kingdom and two return journeys by the same person in any year of assessment.
is made to accompany him at the beginning of that period or to visit him during it, or
is a return journey following a journey falling within paragraph (a) above;
Subject to subsection (8) below, where— there shall be allowed, in charging tax under Case I or II of Schedule E on the emoluments from the office or employment concerned, a deduction of an amount equal to so much of that cost or, as the case may be, those expenses as falls to be included in those emoluments.
travel facilities are provided for any journey to which this subsection applies and the cost of them is borne by or on behalf of a person who is an employer in respect of any office or employment in the case of which this section applies, or
expenses are incurred out of the emoluments of any office or employment in the case of which this section applies on such a journey and those expenses are reimbursed by or on behalf of the employer,
If a journey is partly for a purpose mentioned in subsection (5) or (6) above and partly for another purpose, only so much of the cost or expenses referred to in subsection (7) above as is properly attributable to the former purpose shall be taken into account in calculating any deduction made under subsection (7) as it applies by virtue of subsection (5) or (as the case may be) (6) .
For the purposes of this section a person's usual place of abode is the country (outside the United Kingdom) in which he normally lives.
In subsection (6) above "child" includes a stepchild, an adopted child and an illegitimate child but does not include a person who is aged 18 or over at the beginning of the journey to the United Kingdom.
References in the Income Tax Acts to section 189 of the Taxes Act and to deductions allowable under Chapter I of Part VIII of that Act shall be construed as including a reference to subsection (7) above and to deductions allowable under it.
Where, apart from this subsection, a deduction in respect of any cost or expenses is allowable under a provision of this section and a deduction in respect of the same cost or expenses is also allowable under another provision of this section or of any other enactment, a deduction in respect of the cost or expenses may be made under either, but not both, of those provisions.
Section 37 above shall have effect in accordance with subsections (2) to (4) below.
Where the office or employment is under or with any person, body of persons or partnership resident in the United Kingdom, section 37 shall have effect for the year 1984-85 and subsequent years of assessment.
In any other case, section 37 shall have effect for the year 1984-85 and subsequent years of assessment except that subsections (2) to (4) shall have effect only for the year 1986-87 and subsequent years of assessment.
Where by virtue of subsection (3) above any provision of section 37 applies in the case of an employee at any time during the year 1984-85 or 1985-86, that section shall apply in his case for the years 1986-87 to 1990-91 as if the following were substituted for subsections (2) to (4)—
All such adjustments (whether by repayment of tax or otherwise) shall be made as are appropriate to give effect to section 37 and this section.
Schedule 8 to this Act (which enables the Treasury to make regulations about personal equity plans) shall have effect.
Schedule 5 to the Finance Act 1983 (relief for investment in corporate trades) shall have effect subject to the amendments made by Part I of Schedule 9 to this Act.
In section 26 of the Finance Act 1983 (which, amongst other things, provides for Schedule 5 to that Act to have effect only in relation to shares issued in the year of assessment 1983-84 or in any of the next three years of assessment), for the words "of the next three years" there shall be substituted the words "later year".
The consequential amendments in Part II of Schedule 9 to this Act shall have effect.
This section applies to—
payments known as enterprise allowance and made by the Manpower Services Commission in pursuance of arrangements under section 2(2)(d) of the Employment and Training Act 1973, and
corresponding payments made in Northern Ireland by the Department of Economic Development.
Any such payment which would (apart from this section) be charged to tax under Case I or Case II of Schedule D shall be charged to tax under Case VI of that Schedule.
Nothing in subsection (2) above shall prevent such a payment—
being treated for the purposes of section 226(9)(c) of the Taxes Act (retirement annuities) or section 530(1)(c) of that Act (earned income) as immediately derived from the carrying on or exercise of a trade, profession or vocation, or
being treated for the purposes of paragraph 8 of Schedule 16 to the Finance Act 1972 (close companies) as trading income.
In consequence of subsection (2) above, the reference in section 9(1) of the Social Security Act 1975 and in section 9(1) of the Social Security (Northern Ireland) Act 1975 (Class 4 contributions) to profits or gains chargeable to income tax under Case I or Case II of Schedule D shall be taken to include a reference to profits or gains consisting of a payment of enterprise allowance chargeable to income tax under Case VI of Schedule D.
This section applies to—
any payment made on or after 18th March 1986, and
any payment made before that day as part of a distinct series of payments made to the same person, provided one or more of the payments is made on or after that day.
All such adjustments (whether by assessment to tax, repayment of tax or otherwise) shall be made as are appropriate to give effect to this section.
Schedule 10 to this Act (which amends sections 252 and 253 of the Taxes Act) shall have effect.
Subject to subsection (3) below, the amendments made by that Schedule have effect where a company ceases to carry on a trade, or part of a trade, after 18th March 1986.
Where section 252(6) applies (successive company reconstructions) and the later event within the meaning of that subsection falls after 18th March 1986 but the earlier event falls on or before that date, those amendments do not affect the operation of any provision of section 252 or 253 in relation to the earlier event.
In section 286 of the Taxes Act (loans to participators etc.) in subsection (4) (date when assessed tax is due) after the word "Tax" there shall be inserted "shall be assessable by virtue of this section whether or not the whole or any part of the loan or advance in question has been repaid at the time of the assessment and tax".
In subsection (5) of that section (discharge or repayment of tax on repayment of loan or advance) for the words from the beginning to "loan", in the second place where it occurs, there shall be substituted "Where a close company makes a loan or advance which gives rise to a charge to tax on the company under subsection (1) above and the loan".
The amendments made by this section have effect in relation to any loan or advance made after 18th March 1986 and also in any case where there is a repayment after that date of the whole or any part of a loan or advance made on or before that date.
All such adjustments shall be made, whether by the making of assessments or otherwise, as are required in consequence of the preceding provisions of this section.
This section shall be construed as one with section 286 of the Taxes Act.
Schedule 11 to this Act (which relates to non-resident entertainers and sportsmen) shall have effect.
Schedule 8 to the Taxes Act (relief as respects tax on payments on retirement etc.) shall have effect subject to the following provisions of this section, and in those provisions that Schedule is referred to as "Schedule 8".
On and after 4th June 1986, paragraph 10 of Schedule 8 (aggregation of two or more payments in respect of the same office etc.) shall have effect with the substitution for the words "paragraph 7" of the words "paragraphs 7 and 7A".
Paragraph 12 of Schedule 8 (which provides that any reference in the Schedule to a payment in respect of which tax is chargeable under section 187 of the Taxes Act is a reference to so much of that payment as is chargeable to tax after deduction of relief) shall not apply to any payment which, under subsection (4) of that section, is treated as income received on or after 4th June 1986 and, accordingly, paragraphs 7 and 7A of Schedule 8 shall apply to every such payment without making any deduction therefrom on account of relief under section 188(3) of that Act.
In any case where— then, in the application of paragraphs 7 and 7A of Schedule 8 (in accordance with paragraph 10 or paragraph 11 thereof) in relation to any of those payments which is so treated as income received on or after that date, subsection (3) above shall have effect as if any reference therein to 4th June 1986 were a reference to the first day of the chargeable period referred to in paragraph (a) above.
tax is chargeable under section 187 of the Taxes Act in respect of two or more payments to or in respect of the same person (whether or not in respect of the same office or employment) and is so' chargeable for the same chargeable period, and
under subsection (4) of that section at least one of those payments is treated as income received before 4th June 1986 and at least one of them is treated as income received on or after that date,
Schedule 12 to this Act (which relates to surplus funds in certain pension schemes) shall have effect.
In section 343 of the Taxes Act (building societies), subsection (1A) (which was inserted by the Finance Act 1985 and enables the Board to make regulations requiring societies to account for amounts representing income tax on certain sums) shall have effect and be deemed always to have had effect with the insertion after the words "in accordance with the regulations" of the words "(including sums paid or credited before the beginning of the year but not previously brought into account under subsection (1) above or this subsection)".
In subsection (2) of that section (treatment of building society payments for purposes of corporation tax)—
in paragraph (a) for the words "the amount" there shall be substituted "any amount"; and
in paragraph (b) after the words "any such dividends or interest" there shall be inserted "in respect of which the society is required to account for and pay an amount in accordance with the regulations".
At the end of subsection (7) of that section (meaning of "dividend") there shall be added the words "but any sum which is paid by a building society by way of dividend and in respect of which the society is not required to account for and pay an amount in accordance with the regulations shall be treated for the purposes of Schedule D as paid by way of interest".
In consequence of the amendments of the said section 343 effected by section 40 of the Finance Act 1985 (regulations requiring societies to account for amounts representing income tax on certain sums).—
in subsection (5) of section 16 of the Finance Act 1973 (amounts paid or credited to trustees of certain trusts) for the word "amounts" there shall be substituted "sums" and for the words from "with which" to "that year" there shall be substituted "being sums in respect of which the society is required to account for and pay an amount in accordance with regulations under section 343(1 A) of the Taxes Act"; and
in subsection (1) of section 6 of the Finance Act 1975 (amounts paid or credited to exempt pension funds) for the words from "among the sums" to "the Taxes Act" there shall be substituted "sums in respect of which a building society is required to account for and pay an amount in accordance with regulations under subsection (1A) of section 343 of the Taxes Act".
Where a building society investment which is a source of income of any person (the "lender") is not a relevant investment but at any time after 6th April 1986 becomes such an investment, section 121 of the Taxes Act (special rules where source of income ceases) shall apply as if the investment were a source of income which the lender ceased to possess immediately before that time.
Where a building society investment which is a source of income of any person ceases at any time after 6th April 1986 to be a relevant investment, section 120(3) of the Taxes Act shall apply as if the investment were a new source of income acquired by him immediately after that time.
Where a building society investment which was a source of income of any person immediately before 6th April 1986 was not on that date a relevant investment, section 120(3) of the Taxes Act shall apply as if the investment were a new source of income acquired by him on that date.
In subsections (5) to (7) above "building society investment" does not include a quoted Eurobond (as defined in section 35(1) of the Finance Act 1984) but, subject to that, means any shares in, deposit with or loan to a building society (within the meaning of section 343 of the Taxes Act); and for the purposes of those subsections a building society investment is a "relevant investment" if dividends or interest payable in respect of it are sums in respect of which the society is required to account for and pay an amount in accordance with regulations under subsection (1A) of that section.
Subsections (2) to (4) above have effect for the year 1986-87 and subsequent years of assessment.
Paragraph 1 of Schedule C (public revenue dividends payable in UK) shall not apply, in the case of dividends payable out of any public revenue other than the public revenue of the United Kingdom, if the securities in respect of which the dividends are payable are held in a recognised clearing system.
Section 159(2) of the Taxes Act (tax under Schedule D on foreign dividends entrusted to person in UK for payment in UK) shall not apply if the stocks, funds, shares or securities out of or in respect of which the foreign dividends are payable are held in a recognised clearing system.
In this section "recognised clearing system" means any system for the time being designated as a recognised clearing system under section 35 of the Finance Act 1984 (Eurobonds).
In this section "foreign dividends" has the same meaning as in section 159 of the Taxes Act.
Subsection (1) above has effect in relation to dividends paid after the passing of this Act, and subsection (2) above has effect in relation to foreign dividends paid after the passing of this Act.
With respect to accounting periods beginning on or after 3rd June 1986, section 100 of the Finance Act 1972 (double taxation relief) shall be amended in accordance with this section.
In subsection (6) (set-off of advance corporation tax against liability to corporation tax on income subject to foreign tax) for paragraphs (b) and (c) there shall be substituted—; and in the words following paragraph (c), the words from "if the limit" to "the relevant income and" shall be omitted.
After subsection (6) there shall be inserted the following subsection—
Part II of Schedule 19 to the Finance Act 1984 (offshore funds: modifications of conditions for certification in certain cases) shall have effect subject to the provisions of this section.
In paragraph 11 (which relates to cases of offshore funds with certain wholly-owned subsidiaries) for paragraphs (a) and (b) of sub-paragraph (1) (which restrict the application of the paragraph to wholly-owned subsidiaries which deal in commodities) there shall be substituted the words "which is a company".
At the beginning of sub-paragraph (2) of paragraph 11 (definition of "wholly-owned subsidiary of an offshore fund") there shall be inserted the words "Subject to sub-paragraph (2A) below".
In the case of a company which has only one class of issued share capital, the reference in sub-paragraph (2) above to the whole of the issued share capital shall be construed as a reference to at least 95 per cent, of that share capital.
In sub-paragraph (3) of paragraph 11 (the modifications applicable in relation to wholly-owned subsidiaries)—
at the beginning of paragraph (a) there shall be inserted the words "that percentage of; and
in paragraph (a) after the word "subsidiary" there shall be inserted "which is equal to the percentage of the issued share capital of the company concerned which is owned as mentioned in sub-paragraph (2) above".
After paragraph 12 there shall be inserted the following paragraph—
This section has effect with respect to periods which—
for the purposes of Chapter VII of Part II of the Finance Act 1984 are account periods of offshore funds; and
end after the passing of this Act.
For section 377 of the Taxes Act (under which certain annuities payable by way of compensation for National-Socialist persecution are not regarded as income for any income tax purpose) there shall be substituted the following section—
This section has effect for the year 1986-87 and subsequent years of assessment.
So much of any relevant pension or allowance as is attributable to any general increase taking effect in the year 1986-87 shall be left out of account for all the purposes of income tax charged for that year but not for the purpose of furnishing information relating to any person's income for that year.
For the purposes of this section a pension or allowance is a relevant pension or allowance if it is payable under the Social Security Act 1975, or the Social Security (Northern Ireland) Act 1975, and (in either case) is one of the following—
a retirement pension;
a widow's allowance;
a widowed mother's allowance;
a widow's pension;
an invalid care allowance;
an industrial death benefit by way of widow's or widower's pension.
Where, under Chapter II of Part I of the Finance Act 1985 (value added tax), a person is liable to make a payment by way of— the payment shall not be allowed as a deduction in computing any income, profits or losses for any tax purposes.
penalty under any of sections 13 to 17, or
interest under section 18, or
surcharge under section 19,
A sum paid to any person by way of supplement under section 20 of the Finance Act 1985 (repayment supplement in respect of certain delayed value added tax payments) shall be disregarded for all purposes of corporation tax and income tax.
At the end of section 19 of the Oil Taxation Act 1975 (definitions relating to the corporation tax provisions of that Act) there shall be added the following subsection—
This section has effect in relation to any allowance or distribution made, interest paid or other thing done after 18th March 1986.
The provisions of Chapter III of Part I of the Capital Allowances Act 1968 (which relate to allowances for certain capital expenditure incurred in connection with mineral extraction activities and which are in this section referred to as "the old code of allowances") shall cease to have effect on 31st March 1986 except as provided by Schedule 14 to this Act.
The provisions of Parts I to IV of Schedule 13 to this Act have effect to provide for relief in respect of certain new expenditure incurred by persons carrying on a trade of mineral extraction; and the provisions of Schedule 14 to this Act have effect with respect to certain expenditure incurred before 1st April 1987 by persons carrying on such a trade.
Subject to paragraph 2 of Schedule 14 to this Act, for the purposes of the old code of allowances, the following provisions of this section and Schedules 13 and 14 to this Act, as respects any company which on 31st March 1986 was carrying on a trade of mineral extraction, it shall be assumed that, unless the latest accounting period of the company which begins on or before 31st March 1986 in fact ends on that date.—
that accounting period ends on that date; and
a new one begins on 1st April 1986, the new accounting period to end with the end of the true accounting period.
Subject to paragraph 2 of Schedule 14 to this Act, for the purposes of the provisions referred to in subsection (3) above as they apply to a person who on 31st March 1986 was within the charge to income tax in respect of the profits or gains of a trade of mineral extraction carried on by him, it shall be assumed that, unless the latest basis period of his (determined in accordance with section 72 of the Capital Allowances Act 1968) which begins on or before 31st March 1986 in fact ends on that date.—
that basis period ends on that date; and
a new basis period begins on 1st April 1986, the new basis period to end with the end of the true basis period.
In any case where— that person shall be treated for the purposes of Chapter I of Part III of the Finance Act 1971 (the normal code applicable to machinery or plant) and section 57 of the Finance Act 1985 (short-life assets) as if he had sold the machinery or plant immediately before that first day and had on that first day incurred capital expenditure on the provision of the machinery or plant wholly and exclusively for the purposes of the trade, being expenditure equal to the expenditure incurred (or, where there has been an actual previous sale and re-acquisition, last incurred) as mentioned in paragraph (a) above.
new expenditure is incurred by any person on the provision of machinery or plant for the purposes of mineral exploration and access, as defined in paragraph 1 of Schedule 13 to this Act, and
that expenditure is so incurred before the first day on which that person begins to carry on a trade of mineral extraction, and
on that first day the machinery or plant belongs to him, and does not fall within paragraph 5(1)(d) of Schedule 13 to this Act,
For the purpose of the application of Chapter I of Part III of the Finance Act 1971— that Chapter shall have effect subject to the amendments in subsection (7) below.
in relation to expenditure treated by virtue of subsection (5) above as incurred on the first day on which a person begins to carry on a trade of mineral extraction, and
in relation to expenditure actually incurred on or after that day on the provision of machinery or plant for the purposes of mineral exploration and access,
The amendments referred to in subsection (6) above are—
in section 50 of the Finance Act 1971 (the interpretation provisions applicable to allowances relating to machinery or plant) in subsection (1), after the definition of "income" there shall be inserted—;
after subsection (7) of that section there shall be inserted the following subsection—;
in section 44(5) of that Act (disposal values) at the end of sub-paragraph (ii) of paragraph (c) there shall be added the words "or, in the case of machinery or plant which was in use for mineral exploration and access, he abandons the machinery or plant at the site where it was in use for that purpose"; and
in paragraph 7 of Schedule 8 to that Act (use after user not attracting capital allowances etc.) sub-paragraph (2) (which relates to machinery or plant used for mineral exploration etc.) shall be omitted.
In this section—
"old expenditure" means expenditure which is not new expenditure; and
In consequence of and in connection with the provisions of this section and Parts I to IV of Schedule 13, the amendments in Part V of that Schedule shall have effect.
With respect to capital expenditure incurred on or after 1st April 1986, other than expenditure under existing contracts, the provisions of Schedule 15 to this Act shall have effect in place of section 68 of the Capital Allowances Act 1968 (allowances for capital expenditure on construction of agricultural buildings and works etc.).
In subsection (1) above "expenditure under existing contracts" means expenditure which—
consists of the payment of sums under a contract entered into on or before 13th March 1984 by the person incurring the expenditure; and
is incurred before 1st April 1987.
The preceding provisions of this section and Schedule 15 to this Act shall be construed as if they were included in Part I of the Capital Allowances Act 1968.
In section 69 of the Capital Allowances Act 1968—
after the words "section 68 above" there shall be inserted "and Schedule 15 to the Finance Act 1986"; and
at the end of the definition of "agricultural land" after the word "husbandry" there shall be inserted "(as defined below)"; and
at the end of the section there shall be added—
Where an allowance is or has been made under Schedule 15 to this Act in respect of any capital expenditure, none of that expenditure shall be taken into account in determining qualifying expenditure for the purpose of any allowance or charge under section 44 of the Finance Act 1971 (machinery and plant); and where such an allowance or charge is or has been made by reference to an amount of qualifying expenditure which took account of a particular amount of capital expenditure, that capital expenditure shall be left out of account for the purposes of Schedule 15 to this Act.
Any reference to Chapter V of Part I of the Capital Allowances Act 1968 in— includes a reference to Schedule 15 to this Act; and the reference to section 68 of the said Act of 1968 in section 75 thereof (writing-down allowances during a period of specified length) includes a reference to that Schedule.
section 14 of that Act (exclusion of double allowances), and
section 85 of that Act (allowances in respect of contributions to capital expenditure), and
paragraph 11 of Schedule 12 to the Finance Act 1982 (capital allowances for dwelling-houses let on assured tenancies),
In the following provisions— any reference to the Capital Allowances Act 1968 or to Part I thereof includes a reference to Schedule 15 to this Act.
sections 155(8), 180(7), 227(4), 252(2) and 352(4) of the Taxes Act,
the definition of "capital allowance" in section 526(5) of the Taxes Act,
section 31(2) of the Capital Gains Tax Act 1979, and
the definition of "capital allowance" in subsection (4) of section 34 of the said Act of 1979,
The provisions of subsections (4) to (8) below and Schedule 16 to this Act (which relate to allowances in respect of expenditure on the provision of machinery or plant for leasing and on the provision of certain vehicles) shall have effect with respect to new expenditure, as defined in subsections (2) and (3) below.
In this section and Schedule 16 to this Act, new expenditure means expenditure incurred on or after 1st April 1986, other than— and any expenditure which, by virtue of paragraph 6 of Schedule 12 to the Finance Act 1984 (spreading of expenditure under certain contracts) is deemed for the purposes of Chapter I of Part III of the Finance Act 1971 to be incurred on 1st April 1986 shall also be deemed to be incurred on that date for the purposes of this section and Schedule 16 to this Act.
expenditure to which, by virtue of sub-paragraph (2) of paragraph 2 of Schedule 12 to the Finance Act 1984 (expenditure incurred under contracts entered into on or before 13th March 1984), sub-paragraph (1) of that paragraph (progressive withdrawal of first-year allowances) does not apply; and
expenditure to which, by virtue of paragraph 4 of that Schedule (transitional relief for regional projects) Part I of that Schedule does not apply; and
expenditure falling within paragraph 7 of Schedule 12 to the Finance Act 1980 (television sets, etc); and
expenditure excluded by subsection (3) below;
In any case where— expenditure incurred by his associate or successor on the acquisition of the machinery or plant is excluded from new expenditure; and in this subsection "associate or successor" means a person who, in relation to the original lessor, is of a description specified in paragraph (a) or paragraph (b) of the said subsection (9).
before 1st April 1986 a person (in this subsection referred to as "the original lessor") incurred expenditure on the provision of machinery or plant for leasing, and
on or after that date the machinery or plant ceases to belong to the original lessor on being acquired by an associate or successor of his, and
by virtue of subsection (9) of section 64 of the Finance Act 1980 (connected persons etc.), the machinery or plant is treated for the purposes of subsection (8) of that section (the requisite period) as continuing to belong to the original lessor so long as it belongs to his associate or successor,
Subject to subsection (7) below, the separate pooling provisions which are contained in sections 64 to 68 of the Finance Act 1980 and which are applicable to expenditure on machinery or plant which is not used for a qualifying purpose shall not apply to new expenditure but, for the purpose of maintaining a separate pool for expenditure falling within section 70 of the Finance Act 1982 (assets leased outside the United Kingdom) and for excluding from that section certain ships, aircraft and transport containers.—
sections 64 to 68 of the Finance Act 1980 shall have effect as amended by Part I of Schedule 16 to this Act;
section 70 of, and Schedule 11 to, the Finance Act 1982 shall have effect as amended by Part II of that Schedule; and
Part III of that Schedule shall have effect for supplementing the enactments amended by Parts I and II of that Schedule.
In consequence of the preceding provisions of this section, in paragraph 8A of Schedule 8 to the Finance Act 1971 (writing-down allowances for ships) sub-paragraph (9) shall be omitted.
In consequence of the preceding provisions of this section, but subject to subsection (7) below, in subsection (6)(b) of section 57 of the Finance Act 1985 (short-life assets: transfer of expenditure on asset beginning to be used otherwise than for a qualifying purpose)—
the words "(as it has effect in accordance with section 65 of the Finance Act 1980)" shall be omitted; and
for the words from "the separate trade" onwards there shall be substituted "his actual trade".
Notwithstanding anything in the preceding provisions of this section, section 44 of the Finance Act 1971 shall continue to apply separately with respect to expenditure on the provision of any vehicle falling within section 69 of the Finance Act 1980 (writing-down allowances for cars) and, accordingly.—
except where such a vehicle is used for the purpose of being leased to such a person as is referred to in paragraphs (a) and (b) of subsection (1) of section 70 of the Finance Act 1982 and the leasing is not short-term leasing, within the meaning of that section, nothing in Parts I to III of Schedule 16 to this Act applies with respect to any such expenditure; and
the amendments made by subsection (6) above do not apply where the asset in question is a vehicle falling within section 69 of the Finance Act 1980.
In consequence of the withdrawal of first-year allowances by section 58 of, and Schedule 12 to, the Finance Act 1984, section 69 of the Finance Act 1980 shall be amended, with respect to new expenditure, in accordance with Part IV of Schedule 16 to this Act.
In section 64 of the Finance Act 1980, as it has effect where- after the words "could have been made to the lessee" there shall be inserted "(disregarding for this purpose paragraph 2 of Schedule 12 to the Finance Act 1984)".
the expenditure on the provision of machinery or plant referred to in subsection (1) of that section is not new expenditure, but
the notional purchase of the machinery or plant by the lessee which is referred to in subsection (2)(a) of that section would at any time mean the incurring of new expenditure,
In section 56 of the Finance Act 1985 (time when capital expenditure is incurred) at the end of subsection (1) there shall be added and.
This section applies where there is or has been a disposal of an asset to the trustees of a settlement in such circumstances that, on a claim for relief, section 79 of the Finance Act 1980 (general relief for gifts) applies, or would but for this section apply, so as to reduce the amounts of the chargeable gain and the consideration referred to in subsection (1) of that section.
In this section-
"a relevant disposal" means such a disposal as is referred to in subsection (1) above; and
"the 1980 provision" means section 79 of the Finance Act 1980.
Relief under the 1980 provision shall not be available on a relevant disposal occurring on or after 18th March 1986 if—
at the material time the trustees to whom the disposal is made fall to be treated, under section 52 of the Capital Gains Tax Act 1979, as resident and ordinarily resident in the United Kingdom, although the general administration of the trust is ordinarily carried on outside the United Kingdom; and
on a notional disposal of the asset concerned occurring immediately after the material time, the trustees would be regarded for the purposes of any double taxation relief arrangements—
as resident in a territory outside the United Kingdom; and
as not liable in the United Kingdom to tax on a gain arising on that disposal.
In subsection (3) above—
"the material time" means the time of the relevant disposal;
a "notional disposal" means a disposal by the trustees of the asset which was the subject of the relevant disposal; and
"double taxation relief arrangements" means arrangements having effect by virtue of section 497 of the Taxes Act (as extended to capital gains tax by section 10 of the Capital Gains Tax Act 1979).
In any case where— section 79 of the Finance Act 1981 shall have effect as if, at that time, the trustees had become neither resident nor ordinarily resident in the United Kingdom.
relief under the 1980 provision has been allowed on a claim relating to a relevant disposal, (whether occurring before, on or after 18th March 1986), and
at a time subsequent to that relevant disposal, but not earlier than 18th March 1986, the circumstances become such that paragraphs (a) and (b) of subsection (3) above would apply if that time were the material time referred to in that subsection, and
section 79 of the Finance Act 1981 (which provides for the recovery of relief under the 1980 provision in the event of the emigration of the donee) has not had effect in relation to the relevant disposal before that time and would not (apart from this subsection) have effect at that time,
In section 107 of the Capital Gains Tax Act 1979 (small part disposals) in subsection (1) for the words "is small, as compared with" there shall be substituted "does not exceed one-fifth of.
This section applies to disposals on or after 6th April 1986.
Subject to subsection (5) below, this section applies where a person (A) has contracted to sell securities and, to enable him to fulfil the contract, he enters into an arrangement under which—
another person (B) is to transfer securities to A or his nominee, and
in return securities of the same kind and amount are to be transferred (whether or not by A or his nominee) to B or his nominee.
Subject to subsection (5) below, this section also applies where, to enable B to make the transfer to A or his nominee, B enters into an arrangement under which—
another person (C) is to transfer securities to B or his nominee, and
in return securities of the same kind and amount are to be transferred (whether or not by B or his nominee) to C or his nominee.
Any transfer made in pursuance of an arrangement mentioned in subsection (1) or (2) above shall not be taken into account for the purposes of the Tax Acts in computing the profits or losses of any trade carried on by the transferor or transferee.
Any disposal and acquisition made in pursuance of an arrangement mentioned in subsection (1) or (2) above shall be disregarded for the purposes of capital gains tax.
The Treasury may provide by regulations that this section, or any provision of it, does not apply unless such conditions as are specified in the regulations are fulfilled; and the conditions may relate to the capacity in which any person involved in any arrangement is acting, the Board's approval of any such person or of the arrangement, the nature of the securities, or otherwise.
This section applies to transfers made after such date as is specified for this purpose by regulations under this section.
In this section "securities" includes stocks and shares.
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.
Schedule 17 to this Act (which contains amendments of provisions of the Finance Act 1985 about securities) shall have effect.
Schedule 18 to this Act (which contains other provisions about securities) shall have effect.
In section 55 of the Finance Act 1963 and in section 4 of the Finance Act (Northern Ireland) 1963 (duty on conveyance or transfer on sale) after subsection (1) there shall be inserted—.
Accordingly—
in subsection (1) of each of those sections for the words "(2) and" there shall be substituted the words "(1A) to";
in subsection (2) of each of those sections for the words from "under" to "by reference to that heading" there shall be substituted the words "by reference to the heading mentioned in subsection (1) above."
This section applies to any instrument executed in pursuance of a contract made on or after the day on which the rule of The Stock Exchange that prohibits a person from carrying on business as both a broker and a jobber is abolished.
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In the heading "Bearer Instrument" in Schedule 1 to the Stamp Act 1891, in column (2) (duty on certain overseas bearer instruments twice the transfer duty) for the word "twice" there shall be substituted the words "three times".
; and the instrument so postulated shall be taken to transfer the stock on the day of issue or transfer (depending on whether section 60(1) or (2) of this Act applies) and to be executed in pursuance of a contract made on that day.
; and the instrument so postulated shall be taken to transfer the stock on the day of issue or transfer (depending on whether paragraph (a) or (b) of section 9(1) applies) and to be executed in pursuance of a contract made on that day.
This section applies to any instrument which falls within section 60(1) of the Finance Act 1963 and is issued on or after the day of The Stock Exchange reforms.
This section applies to any instrument which falls within section 60(2) of that Act if the stock constituted by or transferable by means of it is transferred on or after the day of The Stock Exchange reforms.
In this section "the day of The Stock Exchange reforms" means the day on which the rule of The Stock Exchange that prohibits a person from carrying on business as both a broker and a jobber is abolished.
In subsection (4) above the reference to section 60(1) of the Finance Act 1963 includes a reference to section 9(1 )(a) of the Finance Act (Northern Ireland) 1963 and in subsection (5) above the reference to section 60(2) of the former Act includes a reference to section 9(1)(b) of the latter.
This section applies where a company purchases its own shares under section 690 of the Companies Act 2006 ....
Any return which relates to any of the shares purchased and is delivered to the registrar of companies under section 707 of that Act ... shall be charged with stamp duty, and treated for all purposes of the Stamp Act 1891 , as if it were an instrument transferring the sharesto which it relates on sale to the company in pursuance of the contract (or contracts) of purchase concerned.
Subject to subsection (4) below, this section applies to any such return which is delivered to the registrar of companies on or after the day of The Stock Exchange reforms.
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This section does not apply to any return to the extent that the shares to which it relates were purchased under a contract entered into before the day of The Stock Exchange reforms.
In this section “the day of The Stock Exchange reforms” means the day on which the rule of The Stock Exchange that prohibits a person from carrying on business as both a broker and a jobber is abolished.
Subject to subsection (9) below, subsection (2) or (3) below (as the case may be) applies where an instrument ... transfers relevant securities of a company incorporated in the United Kingdom to a person who at the time of the transfer falls within subsection (6), (7) or (8) below.
If stamp duty is chargeable on the instrument under Part I of Schedule 13 to the Finance Act 1999 (conveyance or transfer on sale), the rate at which that duty is chargeable is 1.5% of—
the amount or value of the consideration for the sale to which the instrument gives effect, or
where subsection (2A) applies—
the amount or value of the consideration for the sale to which the instrument gives effect, or
if higher, the value of the securities at the date the instrument is executed.
For the purposes of subsection (1) “instrument” does not include—
a bearer instrument (see subsection (9A));
an exempt capital-raising instrument (see section 72ZA);
an exempt listing instrument (see section 72ZB).
If stamp duty is not chargeable on the instrument under Part 1 of Schedule 13 to the Finance Act 1999 (transfer on sale)—
stamp duty is chargeable on the instrument under this subsection, and
subject to subsection (5), the rate at which that duty is chargeable is 1.5% of the value of the securities at the date the instrument is executed.
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at the time of the transfer the transferor is a qualified dealer in securities of the kind concerned or a nominee of such a qualified dealer,
the transfer is made for the purposes of the dealer's business,
at the time of the transfer the dealer is not a market maker in securities of the kind concerned, and
the instrument contains a statement that paragraphs (a) to (c) above are fulfilled.
This subsection applies where the instrument transferring the securities is executed pursuant to—
the exercise of an option to buy or to sell the securities, and
either—
a term of the option which provides for the securities to be transferred to the person falling within subsection (6), (7) or (8), or
a direction, given by or on behalf of the person entitled or bound to acquire the securities pursuant to the exercise of the option, for the securities to be so transferred.
In a case where — subsection (3) above shall have effect as if the reference to the value there mentioned were to an amount (if any) equal to the total of the instalments payable, less those paid before the transfer to the other person is effected.
securities are issued, or securities sold are transferred, and (in either case) they are to be paid for in instalments,
the person to whom they are issued or transferred holds them and transfers them to another person when the last instalment is paid,
the transfer to the other person is effected by an instrument in the case of which subsection (3) above applies,
before the execution of the instrument mentioned in paragraph (c) above an instrument is received by a person falling (at the time of the receipt) within subsection (6), (7) or (8) below,
the instrument so received evidences all the rights which (by virtue of the terms under which the securities are issued or sold as mentioned in paragraph (a) above) subsist in respect of them at the time of the receipt, and
the instrument mentioned in paragraph (c) above contains a statement that paragraphs (a), (b) and (e) above are fulfilled,
A person falls within this subsection if his business is exclusively that of holding relevant securities —
as nominee or agent for a person whose business is or includes issuing depositary receipts for relevant securities, and
for the purposes of such part of the business mentioned in paragraph (a) above as consists of issuing such depositary receipts (in a case where the business does not consist exclusively of that).
A person falls within this subsection if —
he is specified for the purposes of this subsection by the Treasury by order made by statutory instrument, and
his business is or includes issuing depositary receipts for relevant securities.
A person falls within this subsection if —
he is specified for the purposes of this subsection by the Treasury by order made by statutory instrument,
he does not fall within subsection (6) above but his business includes holding relevant securities as nominee or agent for a person who falls within subsection (7)(b) above at the time of the transfer, and
he holds relevant securities as nominee or agent for such a person, for the purposes of such part of that person's business as consists of issuing depositary receipts for relevant securities (in a case where that business does not consist exclusively of that).
Where an instrument transfers relevant securities of a company incorporated in the United Kingdom — subsections (2) to (5) above shall not apply and stamp duty is not chargeable on the instrument.
to a company which at the time of the transfer falls within subsection (6) above . . . , and
from a company which at that time falls within that subsection . . . ,
This section applies to any instrument executed on or after the day on which the rule of The Stock Exchange that prohibits a person from carrying on business as both a broker and a jobber is abolished.
Where an instrument transfers shares or stock or marketable securities admitted to trading on a recognised growth market but not listed on any market, subsections (2) to (5) do not apply and stamp duty is not chargeable on the instrument.
In subsection (8A) “listed” and “recognised growth market” are to be construed in accordance with section 99A below.
Where an instrument transfers shares in a company which are held by the company (whether in accordance with section 724 of the Companies Act 2006 (treasury shares) or otherwise), subsections (2) to (5) do not apply and stamp duty is not chargeable on the instrument.
In this section “bearer instrument” has the meaning given in paragraph 3 of Schedule 15 to the Finance Act 1999.
A person whose business is or includes issuing depositary receipts for relevant securities of a company incorporated in the United Kingdom shall notify the Commissioners of that fact before the end of the period of one month beginning with the date on which he first issues such depositary receipts.
A person whose business includes (but does not exclusively consist of) holding relevant securities (being securities of a company incorporated in the United Kingdom)— shall notify the Commissioners of that fact before the end of the period of one month beginning with the date on which he first holds such relevant securities as such a nominee or agent and for such purposes.
as nominee or agent for a person whose business is or includes issuing depositary receipts for relevant securities, and
for the purposes of such part of the business mentioned in paragraph (a) above as consists of issuing such depositary receipts (in a case where the business does not consist exclusively of that),
A company which is incorporated in the United Kingdom and becomes aware that any shares in the company are held by a person such as is mentioned in subsection (1) or (2) above shall notify the Commissioners of that fact before the end of the period of one month beginning with the date on which the company first becomes aware of that fact.
A person who fails to comply with subsection (1) or (2) above shall be liable to a penalty not exceeding £1,000.
A company which fails to comply with subsection (3) above shall be liable to a penalty not exceeding £100.
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For the purposes of sections 67, 68 and 72ZB a depositary receipt for relevant securities is an instrument acknowledging— except that for those purposes a depositary receipt for relevant securities does not include an instrument acknowledging rights in or in relation to securities if they are issued or sold under terms providing for payment in instalments and for the issue of the instrument as evidence that an instalment has been paid.
that a person holds relevant securities or evidence of the right to receive them, and
that another person is entitled to rights, whether expressed as units or otherwise, in or in relation to relevant securities of the same kind, including the right to receive such securities (or evidence of the right to receive them) from the person mentioned in paragraph (a) above,
The Treasury may by regulations provide that for subsection (1) above (as it has effect for the time being) there shall be substituted a subsection containing a different definition of a depositary receipt for the purposes of sections 67 and 68 above.
References in this section and sections 67 and 68 above to relevant securities, or to relevant securities of a company, are to shares in or stock or marketable securities of any company (which, unless otherwise stated, need not be incorporated in the United Kingdom).
For the purposes of section 67(2)(b)(ii) and (3) above the value of securities at the date the instrument is executed shall be taken to be the price they might reasonably be expected to fetch on a sale at that time in the open market.
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is a member of a recognised stock exchange (within the meaning given by section 535 of the Taxes Act), or
is designated a qualified dealer by order made by the Treasury.
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holds himself out at all normal times in compliance with the rules of The Stock Exchange as willing to buy and sell securities of that kind at a price specified by him, and
is recognised as doing so by the Council of The Stock Exchange.
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The power to make regulations or an order under this section shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.
Subject to subsection (9) and section 97A below, subsection (2) or (3) below (as the case may be) applies where an instrument ... transfers relevant securities of a company incorporated in the United Kingdom to a person who at the time of the transfer falls within subsection (6), (7) or (8) below.
If stamp duty is chargeable on the instrument under Part I of Schedule 13 to the Finance Act 1999 (conveyance or transfer on sale), the rate at which that duty is chargeable is 1.5% of—
the amount or value of the consideration for the sale to which the instrument gives effect, or
where subsection (2A) applies—
the amount or value of the consideration for the sale to which the instrument gives effect, or
if higher, the value of the securities at the date the instrument is executed.
For the purposes of subsection (1) “instrument” does not include—
a bearer instrument (see subsection (9A));
an exempt capital-raising instrument (see section 72ZA);
an exempt listing instrument (see section 72ZB).
If stamp duty is not chargeable on the instrument under Part 1 of Schedule 13 to the Finance Act 1999 (transfer on sale)—
stamp duty is chargeable on the instrument under this subsection, and
subject to subsection (5), the rate at which that duty is chargeable is 1.5% of the value of the securities at the date the instrument is executed.
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at the time of the transfer the transferor is a qualified dealer in securities of the kind concerned or a nominee of such a qualified dealer,
the transfer is made for the purposes of the dealer's business,
at the time of the transfer the dealer is not a market maker in securities of the kind concerned, and
the instrument contains a statement that paragraphs (a) to (c) above are fulfilled.
This subsection applies where the instrument transferring the securities is executed pursuant to—
the exercise of an option to buy or to sell the securities, and
either—
a term of the option which provides for the securities to be transferred to the person falling within subsection (6), (7) or (8), or
a direction, given by or on behalf of the person entitled or bound to acquire the securities pursuant to the exercise of the option, for the securities to be so transferred.
In a case where — subsection (3) above shall have effect as if the reference to the value there mentioned were to an amount (if any) equal to the total of the instalments payable, less those paid before the transfer to the other person is effected.
securities are issued, or securities sold are transferred, and (in either case) they are to be paid for in instalments,
the person to whom they are issued or transferred holds them and transfers them to another person when the last instalment is paid,
the transfer to the other person is effected by an instrument in the case of which subsection (3) above applies,
before the execution of the instrument mentioned in paragraph (c) above an instrument is received by a person falling (at the time of the receipt) within subsection (6), (7) or (8) below,
the instrument so received evidences all the rights which (by virtue of the terms under which the securities are issued or sold as mentioned in paragraph (a) above) subsist in respect of them at the time of the receipt, and
the instrument mentioned in paragraph (c) above contains a statement that paragraphs (a), (b) and (e) above are fulfilled,
A person falls within this subsection if his business is exclusively that of holding relevant securities —
as nominee or agent for a person whose business is or includes the provision of clearance services for the purchase and sale of relevant securities, and
for the purposes of such part of the business mentioned in paragraph (a) above as consists of the provision of such clearance services (in a case where the business does not consist exclusively of that).
A person falls within this subsection if —
he is specified for the purposes of this subsection by the Treasury by order made by statutory instrument, and
his business is or includes the provision of clearance services for the purchase and sale of relevant securities.
A person falls within this subsection if —
he is specified for the purposes of this subsection by the Treasury by order made by statutory instrument,
he does not fall within subsection (6) above but his business includes holding relevant securities as nominee or agent for a person who falls within subsection (7)(b) above at the time of the transfer, and
he holds relevant securities as nominee or agent for such a person, for the purposes of such part of that person's business as consists of the provision of clearance services for the purchase and sale of relevant securities (in a case where that business does not consist exclusively of that).
Where an instrument transfers relevant securities of a company incorporated in the United Kingdom — subsections (2) to (5) above shall not apply and stamp duty is not chargeable on the instrument.
to a company which at the time of the transfer falls within subsection (6) above . . . , and
from a company which at that time falls within that subsection . . . ,
This section applies to any instrument executed on or after the day on which the rule of The Stock Exchange that prohibits a person from carrying on business as both a broker and a jobber is abolished.
Where an instrument transfers shares or stock or marketable securities admitted to trading on a recognised growth market but not listed on any market, subsections (2) to (5) do not apply and stamp duty is not chargeable on the instrument.
In subsection (8A) “listed” and “recognised growth market” are to be construed in accordance with section 99A below.
Where an instrument transfers shares in a company which are held by the company (whether in accordance with section 724 of the Companies Act 2006 (treasury shares) or otherwise), subsections (2) to (5) do not apply and stamp duty is not chargeable on the instrument.
In this section “bearer instrument” has the meaning given in paragraph 3 of Schedule 15 to the Finance Act 1999.
A person whose business is or includes the provision of clearance services for the purchase and sale of relevant securities of a company incorporated in the United Kingdom shall notify the Commissioners of that fact before the end of the period of one month beginning with the date on which he first provides such clearance services.
A person whose business includes (but does not exclusively consist of) holding relevant securities (being securities of a company incorporated in the United Kingdom)— shall notify the Commissioners of that fact before the end of the period of one month beginning with the date on which he first holds such relevant securities as such a nominee or agent and for such purposes.
as nominee or agent for a person whose business is or includes the provision of clearance services for the purchase and sale of relevant securities, and
for the purposes of such part of the business mentioned in paragraph (a) above as consists of the provision of such clearance services (in a case where the business does not consist exclusively of that),
A company which is incorporated in the United Kingdom and becomes aware that any shares in the company are held by a person such as is mentioned in subsection (1) or (2) above shall notify the Commissioners of that fact before the end of the period of one month beginning with the date on which the company first becomes aware of that fact.
A person who fails to comply with subsection (1) or (2) above shall be liable to a penalty not exceeding £1,000.
A company which fails to comply with subsection (3) above shall be liable to a penalty not exceeding £100.
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References in sections 70 and 71 above to relevant securities, or to relevant securities of a company, are to shares in or stock or marketable securities of any company (which, unless otherwise stated, need not be incorporated in the United Kingdom).
For the purposes of section 70(2)(b)(ii) and (3) above the value of securities at the date the instrument is executed shall be taken to be the price they might reasonably be expected to fetch on a sale at that time in the open market.
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In section 55 of the Finance Act 1927 and in section 4 of the Finance Act (Northern Ireland) 1928 (reconstructions and amalgamations) in paragraph (B) of subsection (1) for the words "not be chargeable" there shall be substituted the words "be chargeable at the rate mentioned in subsection (9) of this section" and for the words "nor shall any such duty be chargeable" there shall be substituted the word "or".
In consequence, each of those sections shall be further amended as follows—
at the beginning of paragraph (B) of subsection (1) there shall be inserted the words "If a claim is made under this section";
in paragraph (a) of the proviso to subsection (1) the words from "either it" to "liable or" and from "either that" to "duty or" shall be omitted, and in paragraph (c) of that proviso the words "for exemption" shall be omitted;
in subsection (2) for the words "for exemption under paragraph (B) of subsection (1) of there shall be substituted the word "under";
in subsection (5) the words "for exemption" shall be omitted;
in subsection (6), in paragraph (a) the words " for exemption from duty" shall be omitted, in paragraph (c) for the word "exemption" there shall be substituted the word "claim", and in the words following paragraph (c) for the word "exemption" there shall be substituted the word "claim", for the word "remitted" (in the first place where it occurs) there shall be substituted the word "unpaid" and the words from "in the case of duty remitted under paragraph (A)" to "the said subsection" shall be omitted;
in subsection (7) for the words "for exemption from duty under subsection (1) of there shall be substituted the word "under", for the words "such exemption" there shall be substituted the words "such a claim to be allowed" and for the words "have been remitted" there shall be substituted the words "not have been chargeable".
At the end of each of those sections there shall be inserted—
If a document executed solely for the purpose of effecting an exempt distribution is chargeable with stamp duty under the heading "Conveyance or Transfer on Sale" in Schedule 1 to the Stamp Act 1891, the rate at which the duty is charged under that heading shall be the rate of 50p for every £100 or part of £100 of the amount or value of the consideration for the sale to which the document gives effect. If a document executed solely for the purpose of effecting an exempt distribution is chargeable with stamp duty under the heading "Conveyance or Transfer on Sale" in Schedule 1 to the Stamp Act 1891, it shall not be treated as duly stamped unless it is stamped in accordance with section 12 of the Stamp Act 1891 with a particular stamp denoting that it is duly stamped.
In paragraph 12(3) of Schedule 18 to the Finance Act 1980 for the words "this paragraph" there shall be substituted the words "sub-paragraph (2) above".
In section 78 of the Finance Act 1985 (takeovers) the following shall be substituted for subsection (2)—
In section 79 of the Finance Act 1985 (voluntary winding-up: transfer of shares) the following shall be substituted for subsection (2)—
In section 78 and in section 79 of the Finance Act 1985—
in subsection (3) for the word "ignored" there shall be substituted the words "treated as reduced by 50 per cent.";
subsection (9) shall be omitted;
in subsection (10) for "(3)" there shall be substituted "(2) or (3)".
This section applies to any instrument which is executed after 24th March 1986 unless—
it is executed in pursuance of an unconditional contract made on or before 18th March 1986, or
it transfers stock or marketable securities and is executed in pursuance of a general offer (for the stock or securities) which became unconditional as to acceptances on or before 18th March 1986.
This section shall be deemed to have come into force on 25th March 1986.
The following provisions shall cease to have effect—
section 55 of the Finance Act 1927 and section 4 of the Finance Act (Northern Ireland) 1928 (reconstructions and amalgamations);
paragraph 12(1) and (1A) of Schedule 18 to the Finance Act 1980 (demergers);
sections 78, 79 and 80 of the Finance Act 1985 (takeovers and winding-up).
In paragraph 12(3) of Schedule 18 to the Finance Act 1980 for the words “sub-paragraph (2) above” there shall be substituted the words “this paragraph”.
This section applies to any instrument executed in pursuance of a contract made on or after the day on which the rule of The Stock Exchange that prohibits a person from carrying on business as both a broker and a jobber is abolished.
This section applies where a company (the acquiring company) acquires the whole or part of an undertaking of another company (the target company) in pursuance of a scheme for the reconstruction of the target company.
If the first and second conditions (as defined below) are fulfilled, stamp duty under Part I of Schedule 13 to the Finance Act 1999 (conveyance or transfer on sale)shall not be chargeable on an instrument executed for the purposes of or in connection with the transfer of the undertaking or part.
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.
The first condition is ... that the consideration for the acquisition— In paragraph (a) above, “non-redeemable shares” means shares which are not redeemable shares.
consists of or includes the issue of non-redeemable shares in the acquiring company to all the shareholders of the target company;
includes nothing else (if anything) but the assumption or discharge by the acquiring company of liabilities of the target company.
The second condition is that—
the acquisition is effected for bona fide commercial reasons and does not form part of a scheme or arrangement of which the main purpose, or one of the main purposes, is avoidance of liability to stamp duty, income tax, corporation tax or capital gains tax,
after the acquisition has been made, each shareholder of each of the companies is a shareholder of the other, and
after the acquisition has been made, the proportion of shares of one of the companies held by any shareholder is the same , or as nearly as may be the same, as the proportion of shares of the other company held by that shareholder.
This section applies to any instrument which is executed after 24th March 1986 unless it is executed in pursuance of an unconditional contract made on or before 18th March 1986.
If immediately before the acquisition the target company or the acquiring company holds any of its own shares, the shares are to be treated for the purposes of subsections (4) and (5) as having been cancelled before the acquisition (and, accordingly, the company is to be treated as if it were not a shareholder of itself).
This section shall be deemed to have come into force on 25th March 1986.
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This section applies where a company (the acquiring company) acquires the whole or part of an undertaking of another company (the target company).
If the condition mentioned in subsection (3) below is fulfilled, and stamp duty under the heading "Conveyance or Transfer on Sale" in Schedule 1 to the Stamp Act 1891 is chargeable on an instrument executed for the purposes of or in connection with— the rate at which the duty is charged under that heading shall not exceed that mentioned in subsection (4) below.
the transfer of the undertaking or part, or
the assignment to the acquiring company by a creditor of the target company of any relevant debts (secured or unsecured) owed by the target company,
The condition is that the registered office of the acquiring company is in the United Kingdom and that the consideration for the acquisition—
consists of or includes the issue of shares in the acquiring company to the target company or to all or any of its shareholders;
includes nothing else (if anything) but cash not exceeding 10 per cent, of the nominal value of those shares, or the assumption or discharge by the acquiring company of liabilities of the target company, or both.
The rate is the rate of 50p for every £100 or part of £100 of the amount or value of the consideration for the sale to which the instrument gives effect.
An instrument on which, by virtue only of subsection (2) above, the rate at which stamp duty is charged is not to exceed that mentioned in subsection (4) above shall not be taken to be duly stamped unless it is stamped with the duty to which it would be liable but for subsection (2) above or it has, in accordance with section 12 of the Stamp Act 1891, been stamped with a particular stamp denoting that it is duly stamped.
In subsection (2)(b) above "relevant debts" means—
any debt in the case of which the assignor is a bank or trade creditor, and
any other debt incurred not less than two years before the date on which the instrument is executed.
This section applies to any instrument executed on or after the day on which the rule of The Stock Exchange that prohibits a person from carrying on business as both a broker and a jobber is abolished.
Stamp duty under Part I of Schedule 13 to the Finance Act 1999 (conveyance or transfer on sale) shall not be chargeable on an instrument transferring shares in one company (the target company) to another company (the acquiring company) if the conditions mentioned in subsection (3) below are fulfilled.
An instrument on which stamp duty is not chargeable by virtue only of subsection (1) 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.
The conditions are that —
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the transfer forms part of an arrangement by which the acquiring company acquires the whole of the issued share capital of the target company,
the acquisition is effected for bona fide commercial reasons and does not form part of a scheme or arrangement of which the main purpose, or one of the main purposes, is avoidance of liability to stamp duty, stamp duty reserve tax, income tax, corporation tax or capital gains tax,
the consideration for the acquisition consists only of the issue of shares in the acquiring company to the shareholders of the target company,
after the acquisition has been made, each person who immediately before it was made was a shareholder of the target company is a shareholder of the acquiring company,
after the acquisition has been made, the shares in the acquiring company are of the same classes as were the shares in the target company immediately before the acquisition was made,
after the acquisition has been made, the number of shares of any particular class in the acquiring company bears to all the shares in that company the same proportion , or as nearly as may be the same proportion, as the number of shares of that class in the target company bore to all the shares in that company immediately before the acquisition was made, ...
after the acquisition has been made, the proportion of shares of any particular class in the acquiring company held by any particular shareholder is the same , or as nearly as may be the same, as the proportion of shares of that class in the target company held by him immediately before the acquisition was made, and
at the time the instrument mentioned in subsection (1) is executed there are no disqualifying arrangements, within the meaning given by section 77A, in existence.
In this section and section 77A references to shares and to share capital include references to stock.
If immediately before the acquisition the target company or the acquiring company holds any of its own shares, the shares are to be treated for the purposes of subsection (3)(b) to (h) as having been cancelled before the acquisition (and, accordingly, the company is to be treated as if it were not a shareholder of itself).
This section applies to any instrument executed on or after 1st August 1986.
For the purposes of sections 67 and 70, an instrument is an “exempt capital-raising instrument” if the instrument transfers relevant securities in the course of capital-raising arrangements.
In this section, “capital-raising arrangements” means arrangements pursuant to which relevant securities are issued by a company for the purpose of raising new capital.
An instrument is not prevented from being an exempt capital-raising instrument by reason only of a delay in transferring relevant securities where—
a person (“the transferor”) acquires the relevant securities—
before capital-raising arrangements are entered into, or
in the course of capital-raising arrangements,
the transferor is subject to a restriction that has the effect of preventing the transfer of the relevant securities in the course of the capital-raising arrangements, and
the instrument transfers the relevant securities as soon as reasonably practicable after the time at which the restriction ceases to have effect.
For the purposes of sections 67 and 70, an instrument is an “exempt listing instrument” if—
the instrument transfers relevant securities of a company in the course of qualifying listing arrangements, and
those arrangements do not affect the beneficial ownership of the relevant securities.
In this section, “listing arrangements” means arrangements pursuant to which relevant securities, or depositary receipts for relevant securities, are listed on a recognised stock exchange.
For the purposes of this section, listing arrangements are “qualifying” if, immediately before the first transfer of relevant securities in the course of the listing arrangements, no relevant securities in the company or depositary receipts for relevant securities in the company are listed on the recognised stock exchange to which the listing arrangements relate.
An instrument is not prevented from being an exempt listing instrument by reason only of a delay in transferring relevant securities where—
a person (“the transferor”) acquires the relevant securities before qualifying listing arrangements are entered into,
the transferor is subject to a restriction that has the effect of preventing the transfer of the relevant securities in the course of the qualifying listing arrangements, and
the instrument transfers the relevant securities as soon as reasonably practicable after the time at which the restriction ceases to have effect.
Section 1005 of the Income Tax Act 2007 (meaning of “recognised stock exchange”, “listed” etc) applies in relation to this section as it applies in relation to the Income Tax Acts.
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in section 62 of the Finance Act 1963, subsections (2) and (6) (commonwealth stock);
in section 11 of the Finance Act (Northern Ireland) 1963, subsections (2) and (5) (commonwealth stock);
section 29 of the Finance Act 1967 (local authority capital);
section 6 of the Finance Act (Northern Ireland) 1967 (local authority capital);
section 126 of the Finance Act 1976 (loan capital).
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the financial support fund of the Organisation for Economic Co-operation and Development,
the Inter-American Development Bank, or
an organisation which was a designated international organisation at the time of the transfer (whether or not it was such an organisation at the time the loan capital was issued or raised).
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In this section “loan capital” means—
any debenture stock, corporation stock or funded debt, by whatever name known, issued by a body corporate or other body of persons (which here includes a local authority and any body whether formed or established in the United Kingdom or elsewhere);
any capital raised by such a body if the capital is borrowed or has the character of borrowed money, and whether it is in the form of stock or any other form;
stock or marketable securities issued by the government of any country or territory outside the United Kingdom;
any capital raised under arrangements to which section 564G of the Income Tax Act 2007 or section 507 of the Corporation Tax Act 2009 (alternative finance investment bonds) applies .
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In this section “designated international organisation” means an international organisation designated for the purposes of section 324 of the Taxes Act 1988 by an order made under subsection (1) of that section.
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in section 62 of the Finance Act 1963, subsections (2) and (6) (commonwealth stock);
in section 11 of the Finance Act (Northern Ireland) 1963, subsections (2) and (5) (commonwealth stock);
section 29 of the Finance Act 1967 (local authority capital);
section 6 of the Finance Act (Northern Ireland) 1967 (local authority capital);
section 126 of the Finance Act 1976 (loan capital).
Stamp duty under Schedule 15 to the Finance Act 1999 (bearer instruments) shall not be chargeable ... on the transfer of the loan capital constituted by, or transferable by means of, an instrument which relates to loan capital.
Stamp duty shall not be chargeable on an instrument which transfers loan capital issued or raised by —
the financial support fund of the Organisation for Economic Co-operation and Development,
the Inter-American Development Bank, or
an organisation which was a designated international organisation at the time of the transfer (whether or not it was such an organisation at the time the loan capital was issued or raised).
Subject to subsections (5) and (6) below, stamp duty shall not be chargeable on an instrument which transfers any other loan capital.
Subsection (4) above does not apply to an instrument transferring loan capital which, at the time the instrument is executed, carries a right (exercisable then or later) of conversion into shares or other securities, or to the acquisition of shares or other securities, including loan capital of the same description.
Subject to subsections (7) to (7B) below, subsection (4) above does not apply to an instrument transferring loan capital which, at the time the instrument is executed or any earlier time, carries or has carried —
a right to interest the amount of which exceeds a reasonable commercial return on the nominal amount of the capital,
a right to interest the amount of which falls or has fallen to be determined to any extent by reference to the results of, or of any part of, a business or to the value of any property, or
a right on repayment to an amount which exceeds the nominal amount of the capital and is not reasonably comparable with what is generally repayable (in respect of a similar nominal amount of capital) under the terms of issue of loan capital listed in the Official List of The Stock Exchange.
Subsection (4) above shall not be prevented from applying to an instrument by virtue of subsection (6)(a) or (c) above by reason only that the loan capital concerned carries a right to interest, or (as the case may be) to an amount payable on repayment, determined to any extent by reference to an index showing changes in the general level of prices payable in the United Kingdom over a period substantially corresponding to the period between the issue or raising of the loan capital and its repayment.
Where stamp duty is chargeable under Part I of Schedule 13 to the Finance Act 1999 (conveyance or transfer on sale) on an instrument which transfers loan capital, the rate at which duty is charged under that Part shall be 0.5% of the amount or value of the consideration for the sale to which the instrument gives effect.
Subsection (4) above shall not be prevented from applying to an instrument by virtue of subsection (6)(b) above by reason only that the loan capital concerned carries a right to interest which—
reduces in the event of the results of a business or part of a business improving, or the value of any property increasing, or
increases in the event of the results of a business or part of a business deteriorating, or the value of any property diminishing.
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Subsection (4) shall not be prevented from applying to a capital market instrument by virtue of subsection (6)(b) by reason only that the capital market investment concerned carries or has carried a right to interest which ceases or reduces if, or to the extent that, the issuer, after meeting or providing for other obligations specified in the capital market arrangement concerned, has insufficient funds available from that capital market arrangement to pay all or part of the interest otherwise due.
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In the application of this section to loan capital that falls within paragraph (d) of section 78(7) (alternative finance investment bonds)—
subsection (6) has effect as if—
paragraph (a) were omitted, and
for paragraph (c) there were substituted—,
subsections (6)(b), (7), (7A), (7B) and (13) have effect as if references to interest were references to additional payments (“additional payments” having the same meaning as in section 564G of the Income Tax Act 2007 or section 507 of the Corporation Tax Act 2009), and
subsections (7B) and (13) also have effect as if—
references to a capital market investment were references to the loan capital falling within paragraph (d) of section 78(7), and
references to a capital market arrangement were to the arrangements under which that loan capital is raised.
Subsections (7), (9) . . . of section 78 above shall apply as if references to that section included references to this.
In this section—
“capital market instrument” means an instrument transferring a capital market investment issued as part of a capital market arrangement, and
“EEA State” has the meaning given in section 80B(2) above;
In Schedule 1 to the Stamp Act 1891, in the heading "Bearer Instrument", paragraph 2 of the exemptions (bearer letter of allotment etc. required to be surrendered not later than six months after issue) shall be omitted.
This section applies to any instrument which falls within section 60(1) of the Finance Act 1963 and is issued after 24th March 1986, unless it is issued by a company in pursuance of a general offer for its shares and the offer became unconditional as to acceptances on or before 18th March 1986.
This section applies to any instrument which falls within section 60(2) of that Act if the stock constituted by or transferable by means of it is transferred after 24th March 1986.
In this section the reference to section 60(1) of the Finance Act 1963 includes a reference to section 9(1)(a) of the Finance Act (Northern Ireland) 1963 and the reference to section 60(2) of the former Act includes a reference to section 9(1)(b) of the latter.
This section shall be deemed to have come into force on 25th March 1986.
Stamp duty shall not be chargeable on an instrument transferring stock of a particular kind on sale to a person or the person's nominee if—
the person is a member of a regulated market on which stock of that kind is regularly traded; and
the person is an intermediary and is recognised as such by the market in accordance with arrangements approved by the Commissioners.
Stamp duty shall not be chargeable on an instrument transferring stock of a particular kind on sale to a person or the person's nominee if—
the person is a member of a multilateral trading facility, or a recognised foreign exchange, on which stock of that kind is regularly traded;
the person is an intermediary and is recognised as such by the facility or exchange in accordance with arrangements approved by the Commissioners; and
the sale is effected on the facility or exchange.
Stamp duty shall not be chargeable on an instrument transferring stock of a particular kind on sale to a person or the person's nominee if—
the person is an intermediary who is approved for the purposes of this section by the Commissioners; and
stock of that kind is regularly traded on a regulated market.
Stamp duty shall not be chargeable on an instrument transferring stock of a particular kind on sale to a person or the person's nominee if—
the person is an intermediary who is approved for the purposes of this section by the Commissioners;
stock of that kind is regularly traded on a multilateral trading facility or a recognised foreign exchange; and
the sale is effected on the facility or exchange.
Stamp duty shall not be chargeable on an instrument transferring stock of a particular kind on sale to a person or the person's nominee if—
the person is a member of a regulated market, a multilateral trading facility or a recognised foreign options exchange;
options to buy or sell stock of that kind are regularly traded on, and are listed by or quoted on, that market, facility or exchange;
the person is an options intermediary and is recognised as such by that market, facility or exchange in accordance with arrangements approved by the Commissioners; and
stock of that kind is regularly traded on a regulated market.
Stamp duty shall not be chargeable on an instrument transferring stock of a particular kind on sale to a person or the person's nominee if— and in paragraph (d) “relevant qualifying exchange” means a multilateral trading facility, a recognised foreign options exchange or a recognised foreign exchange.
the person is a member of a regulated market, a multilateral trading facility or a recognised foreign options exchange;
options to buy or sell stock of that kind are regularly traded on, and are listed by or quoted on, that market, facility or exchange;
the person is an options intermediary and is recognised as such by that market, facility or exchange in accordance with arrangements approved by the Commissioners; and
the sale is effected on a relevant qualifying exchange on which stock of that kind is regularly traded or is effected on a relevant qualifying exchange pursuant to the exercise of a relevant option and options to buy or sell stock of that kind are regularly traded on, and are listed by or quoted on, that exchange;
Stamp duty shall not be chargeable on an instrument transferring stock of a particular kind on sale to a person or the person's nominee if—
the person is an options intermediary who is approved for the purposes of this section by the Commissioners;
options to buy or sell stock of that kind are regularly traded on, and are listed by or quoted on, a regulated market, a multilateral trading facility or a recognised foreign options exchange; and
stock of that kind is regularly traded on a regulated market.
Stamp duty shall not be chargeable on an instrument transferring stock of a particular kind on sale to a person or the person's nominee if— and in paragraph (c) “relevant qualifying exchange” means a multilateral trading facility, a recognised foreign options exchange or a recognised foreign exchange.
the person is an options intermediary who is approved for the purposes of this section by the Commissioners;
options to buy or sell stock of that kind are regularly traded on, and are listed by or quoted on, a regulated market, a multilateral trading facility or a recognised foreign options exchange; and
the sale is effected on a relevant qualifying exchange on which stock of that kind is regularly traded or is effected on a relevant qualifying exchange pursuant to the exercise of a relevant option and options to buy or sell stock of that kind are regularly traded on, and are listed by or quoted on, that exchange;
For the purposes of this section—
an intermediary is a person who carries on a bona fide business of dealing in stock and does not carry on an excluded business; and
an options intermediary is a person who carries on a bona fide business of dealing in quoted or listed options to buy or sell stock and does not carry on an excluded business.
The excluded businesses are the following—
any business which consists wholly or mainly in the making or managing of investments;
any business which consists wholly or mainly in, or is carried on wholly or mainly for the purpose of, providing services to persons who are connected with the person carrying on the business;
any business which consists in insurance business;
any business which consists in managing or acting as trustee in relation to a pension scheme or which is carried on by the manager or trustee of such a scheme in connection with or for the purposes of the scheme;
any business which consists in operating or acting as trustee in relation to a collective investment scheme or is carried on by the operator or trustee of such a scheme in connection with or for the purposes of the scheme.
A sale is effected on a facility or an exchange for the purposes of this section if (and only if)—
it is subject to the rules of the facility or exchange; and
it is reported to the facility or exchange in accordance with the rules of the facility or exchange.
The Commissioners may approve a person for the purposes of this section only if the person
is authorised under the law of an EEA State or Gibraltar to provide any of the investment services or activities listed in Section A 2 or 3 of Annex I to the Directive (execution of orders on behalf of clients and dealing on own account), whether or not the person is authorised under the Directive or
has permission under the Financial Services and Markets Act 2000 to carry on any of the investment services or activities in paragraph 2 or 3 of Part 3 of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.
An instrument on which stamp duty is not chargeable by virtue only of this section shall not be deemed to be duly stamped unless it has been stamped with a stamp denoting that it is not chargeable with any duty; and notwithstanding anything in section 122(1) of the Stamp Act 1891, the stamp may be a stamp of such kind as the Commissioners may prescribe.
For the purposes of section 80A above the question whether a person is connected with another shall be determined in accordance with the provisions of section 1122 of the Corporation Tax Act 2010.
In section 80A above and this section—
“the Directive” means Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments, as amended from time to time;
“insurance business” means long term business or general business as defined in section 1 of the Insurance Companies Act 1982;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
In section 80A above “recognised foreign exchange” means a market which—
is not in the United Kingdom, Gibraltar or an EEA State; and
is specified in regulations made by the Treasury under this subsection.
In section 80A above and this section “recognised foreign options exchange” means a market which—
is not in the United Kingdom, Gibraltar or an EEA State; and
is specified in regulations made by the Treasury under this subsection.
In section 80A above “the exercise of a relevant option” means—
the exercise by the options intermediary concerned of an option to buy stock; or
the exercise of an option binding the options intermediary concerned to buy stock.
The Treasury may by regulations amend section 80A above and this section (as they have effect for the time being) in order to extend the exemption from duty under that section.
The Treasury may by regulations provide that section 80A above shall not have effect in relation to instruments executed in pursuance of kinds of agreement specified in the regulations.
The Treasury may by regulations provide that if— stamp duty shall be chargeable on the instrument at a rate, specified in the regulations, which shall not exceed 10p for every £100 or part of £100 of the consideration for the sale.
an instrument falls within any of subsections (1) to (2C) of section 80A above, and
stamp duty would be chargeable on the instrument apart from that section,
The Treasury may by regulations change the meaning of “intermediary” or “options intermediary” for the purposes of section 80A above by amending subsection (4) or (5) of that section (as it has effect for the time being).
The power to make regulations under subsections (3) to (8) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.
This section applies where a person (A) has entered into an arrangement with another person (B) under which— and the conditions set out in subsection (2A) or (3) below are fulfilled.
B is to transfer stock of a particular kind to A or his nominee, and
stock of the same kind and amount is to be transferred by A or his nominee to B or his nominee,
Stamp duty shall not be chargeable on an instrument transferring stock to B or his nominee or A or his nominee in accordance with the arrangement.
The conditions in this subsection are—
that A or B
is authorised under the law of an EEA State or Gibraltar to provide any of the investment services or activities listed in Section A 2 or 3 of Annex I to the Directive (execution of orders on behalf of clients and dealing on own account) in relation to stock of the kind concerned, whether or not A or B is authorised under the Directive; or
has permission under the Financial Services and Markets Act 2000 to carry on any of the investment services or activities in paragraph 2 or 3 of Part 3 of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;
that stock of the kind concerned is regularly traded on a regulated market.
The conditions in this subsection are—
that the arrangement is effected on a regulated market, a multilateral trading facility or a recognised foreign exchange; and
that stock of the kind concerned is regularly traded on that market, facility or exchange.
An arrangement does not fall within subsection (1) above if—
the arrangement is not such as would be entered into by persons dealing with each other at arm’s length; or
under the arrangement any of the benefits or risks arising from fluctuations, before the transfer to B or his nominee takes place, in the market value of the stock accrues to, or falls on, A.
An instrument on which stamp duty is not chargeable by virtue only of subsection (2) above shall not be deemed to be duly stamped unless it has been stamped with a stamp denoting that it is not chargeable with any duty; and notwithstanding anything in section 122(1) of the Stamp Act 1891, the stamp may be a stamp of such kind as the Commissioners may prescribe.
An arrangement is effected on a market, a facility or an exchange for the purposes of subsection (3) above if (and only if)—
it is subject to the rules of the market, facility or exchange; and
it is reported to the market, facility or exchange in accordance with the rules of the market, facility or exchange.
In this section—
“the Directive” has the meaning given in section 80B(2) above;
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The Treasury may by regulations provide that if stamp duty would be chargeable on an instrument but for subsection (2) above, stamp duty shall be chargeable on the instrument at a rate, specified in the regulations, which shall not exceed 10p for every £100 or part of £100 of the consideration for the transfer.
The Treasury may by regulations amend this section (as it has effect for the time being) in order—
to change the conditions for exemption from duty under this section; or
to provide that this section does not apply in relation to kinds of arrangement specified in the regulations.
The power to make regulations under subsection (8) or (9) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.
This section applies where—
A and B have entered into an arrangement falling within section 80C(1),
the conditions in subsection (2A) or (3) of that section are met,
stock is transferred to A or A's nominee, and
the conditions in subsection (2) below are met.
The conditions in this subsection are that—
A and B are not connected persons within the meaning of section 1122 of the Corporation Tax Act 2010,
after B has transferred stock under the arrangement, A or B becomes insolvent,
it becomes apparent (whether before or after the insolvency occurs) that, as a result of the insolvency, stock will not be transferred to B or B's nominee in accordance with the arrangement,
the party who does not become insolvent (“the solvent party”) or the solvent party's nominee acquires replacement stock, and
the replacement stock is acquired before the end of the period of 30 days beginning with the day on which the insolvency occurs (“the insolvency date”).
Where collateral is provided under the arrangement (or under arrangements of which that arrangement forms part), stamp duty is not chargeable on any instrument transferring to the solvent party or the solvent party's nominee—
replacement stock acquired using the collateral (whether directly or indirectly), or
where the solvent party uses the whole of the value of the collateral to acquire replacement stock, any further replacement stock.
Where no collateral is provided as mentioned in subsection (3), stamp duty is not chargeable on any instrument transferring replacement stock to the solvent party or the solvent party's nominee.
Subsections (3) and (4) may apply as regards more than one instrument (and where those subsections apply as regards more than one instrument, the instruments may be executed by different persons).
But those subsections apply only as regards replacement stock up to the amount of stock which will not be transferred as a result of the insolvency.
An instrument on which stamp duty is not chargeable by virtue only of subsection (3) or (4) is not to be deemed to be duly stamped unless it has been stamped with a stamp denoting that it is not chargeable with any duty.
Despite section 122(1) of the Stamp Act 1891, the stamp mentioned in subsection (7) may be a stamp of such kind as the Commissioners for Her Majesty's Revenue and Customs may prescribe.
For the purposes of this section a person becomes insolvent—
if a company voluntary arrangement takes effect under Part 1 of the Insolvency Act 1986,
if an administration application (within the meaning of Schedule B1 to that Act) is made or a receiver or manager, or an administrative receiver, is appointed,
on the commencement of a creditor's voluntary winding up (within the meaning of Part 4 of that Act) or a winding up by the court under Chapter 6 of that Part,
if an individual voluntary arrangement takes effect under Part 8 of that Act,
on the making of a bankruptcy application or presentation of a bankruptcy petition (within the meaning of Part 9 of that Act),
if a compromise or arrangement takes effect under Part 26 or 26A of the Companies Act 2006,
if a bank insolvency order takes effect under Part 2 of the Banking Act 2009,
if a bank administration order takes effect under Part 3 of that Act,...
if a special administration order takes effect under the Investment Bank Special Administration Regulations 2011, ...
if a special administration order takes effect under the Payment and Electronic Money Institution Insolvency Regulations 2021, or
on the occurrence of any corresponding event which has effect under or as a result of the law of Scotland or Northern Ireland or a country or territory outside the United Kingdom.
In this section—
Where an instrument transfers relevant securities of a company incorporated in the United Kingdom between a depositary receipt system and a clearance system—
the provisions of section 67(2) to (5) or, as the case may be, section 70(2) to (5) above shall not apply, and
stamp duty is not chargeable on the instrument.
A transfer between a depositary receipt system and a clearance system means a transfer—
from (or to) a company that at the time of the transfer falls within section 67(6) above, and
to (or from) a company that at that time falls within section 70(6) above.
This section does not apply to a transfer from a clearance system (that is, from such a company as is mentioned in subsection (2)(b) above) if at the time of the transfer an election is in force under section 97A below in relation to the clearance services for the purposes of which the securities are held immediately before the transfer.
Stamp duty shall not be chargeable on an instrument transferring stock on sale to a person or his nominee if it is shown to the satisfaction of the Commissioners that the transaction to which the instrument gives effect was carried out by the person in the ordinary course of his business as a market maker in stock of the kind transferred.
An instrument on which stamp duty is not chargeable by virtue only of subsection (1) above shall not be deemed to be duly stamped unless it has been stamped with a stamp denoting that it is not chargeable with any duty; and notwithstanding anything in section 122(1) of the Stamp Act 1891, the stamp may be a stamp of such kind as the Commissioners may prescribe.
For the purposes of this section a person is a market maker in stock of a particular kind if he—
holds himself out at all normal times in compliance with the rules of The Stock Exchange as willing to buy and sell stock of that kind at a price specified by him, and
is recognised as doing so by the Council of The Stock Exchange.
Subject to subsection (6) below, this section applies to any instrument giving effect to a transaction carried out on or after the day of The Stock Exchange reforms.
The Treasury may by regulations provide that for subsection (3) above (as it has effect for the time being) there shall be substituted a subsection containing a different definition of a market maker for the purposes of this section.
Regulations under subsection (5) above shall apply in relation to any instrument giving effect to a transaction carried out on or after such day, after the day of The Stock Exchange reforms, as is specified in the regulations.
The power to make regulations under subsection (5) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.
This section applies where a person (A) has contracted to sell stock in the ordinary course of his business as a market maker in stock of that kind and, to enable him to fulfil the contract, he enters into an arrangement under which—
another person (B), who is not a market maker in stock of the kind concerned or a nominee of such a market maker, is to transfer stock to A or his nominee, and
in return stock of the same kind and amount is to be transferred (whether or not by A or his nominee) to B or his nominee.
This section also applies where, to enable B to make the transfer to A or his nominee, B enters into an arrangement under which—
another person (C), who is not a market maker in stock of the kind concerned or a nominee of such a market maker, is to transfer stock to B or his nominee, and
in return stock of the same kind and amount is to be transferred (whether or not by B or his nominee) to C or his nominee.
The maximum stamp duty chargeable on an instrument effecting a transfer to B or his nominee or C or his nominee in pursuance of an arrangement mentioned in subsection (1) or (2) above shall be 50p.
For the purposes of this section a person is a market maker in stock of a particular kind if he—
holds himself out at all normal times in compliance with the rules of The Stock Exchange as willing to buy and sell stock of that kind at a price specified by him, and
is recognised as doing so by the Council of The Stock Exchange.
Subject to subsection (7) below, this section applies to any instrument effecting a transfer in pursuance of an arrangement entered into on or after the day of The Stock Exchange reforms.
The Treasury may by regulations provide that for subsection (3) above (as it has effect for the time being) there shall be substituted a subsection containing a different definition of a market maker for the purposes of this section.
Regulations under subsection (6) above shall apply in relation to any instrument effecting a transfer in pursuance of an arrangement entered into on or after such day, after the day of The Stock Exchange reforms, as is specified in the regulations.
The power to make regulations under subsection (6) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.
In section 33(1) of the Finance Act 1970 (composition by stock exchanges in respect of transfer duty)—
for the words "any recognised stock exchange" there shall be substituted "any recognised investment exchange or recognised clearing house", and
In this subsection 'recognised investment exchange' and 'recognised clearing house' have the same meanings as in the Financial Services Act 1986.
The words "recognised investment exchange or recognised clearing house" shall be substituted for the words "stock exchange" in section 33(2)(b), (c) and (d), (4) and (5) of the Finance Act 1970.
This section shall come into force on such day as the Commissioners may appoint by order made by statutory instrument.
In section 127(1) of the Finance Act 1976 (no stamp duty on transfer to stock exchange nominee executed for purposes of a stock exchange transaction) the words “ which is executed for the purposes of a stock exchange transaction ” shall be omitted.
Stamp duty shall not be chargeable on an instrument effecting a transfer of stock if —
the transferee is a recognised investment exchange or a nominee of a recognised investment exchange, and
an agreement which relates to the stamp duty which would (apart from this subsection) be chargeable on the instrument, and was made between the Commissioners and the investment exchange under section 33 of the Finance Act 1970, is in force at the time of the transfer.
Stamp duty shall not be chargeable on an instrument effecting a transfer of stock if —
the transferee is a recognised clearing house , a recognised CSD... or a third country CSD or a nominee of a recognised clearing house , a recognised CSD... or a third country CSD, and
an agreement which relates to the stamp duty which would (apart from this subsection) be chargeable on the instrument, and was made between the Commissioners and the clearing house under section 33 of the Finance Act 1970 , is in force at the time of the transfer.
Subsection (1) above applies to any transfer giving effect to a transaction carried out on or after the day of The Stock Exchange reforms.
Subsection (2) above applies to any instrument giving effect to a transaction carried out on or after such day as the Commissioners may appoint by order made by statutory instrument.
Subsection (3) above applies to any instrument giving effect to a transaction carried out on or after such day as the Commissioners may appoint by order made by statutory instrument.
Section 42(1) of the Finance Act 1920 (reduction of duty in case of certain transfers to jobbers or nominees or qualified dealers) shall have effect, in the case of any transfer giving effect to a transaction carried out on or after the day of The Stock Exchange reforms as if the following were omitted —
in that subsection, the words “ a jobber or his nominee or to”and in the proviso to it the words “jobber or”(in each place);
in subsection (3) of that section, paragraph (d) of the definition of “qualified dealer”(Stock Exchange brokers).
Section 34 of the Finance Act 1961 and section 4 of the Finance Act (Northern Ireland) 1961 (borrowing of stock by jobbers) shall not apply where stock is transferred in discharge of an undertaking given on or after the day of The Stock Exchange reforms.
Section 42(1) of the Finance Act 1920 shall not apply to any transfer giving effect to a transaction carried out on or after such day as is specified for this purpose in regulations made under section 81(5) above; and different days may be so specified for different purposes.
Section 127(2) of the Finance Act 1976 (transfer otherwise than on sale from stock exchange nominee to jobber) shall not apply to any transfer giving effect to a transaction carried out on or after the day of The Stock Exchange reforms.
In sections 81, 82 and 84 above and this section—
“the day of The Stock Exchange reforms” means the day on which the rule of The Stock Exchange that prohibits a person from carrying on business as both a broker and a jobber is abolished,
references to a recognised investment exchange are to a recognised investment exchange within the meaning given by section 285(1)(a) of the Financial Services and Markets Act 2000,
“recognised clearing house”, “recognised CSD”, ... and “third country CSD” have the meanings given by section 285(1)(b), (e)... and (g) of the Financial Services and Markets Act 2000,
“stock” includes marketable security.
This section applies for the purposes of section 77(3)(i).
Arrangements are “disqualifying arrangements” if it is reasonable to assume that the purpose, or one of the purposes, of the arrangements is to secure that— but a person who has held at least 25% of the issued share capital of the target company at all times during the relevant period is not within paragraph (a) or (b).
a particular person obtains control of the acquiring company, or
particular persons together obtain control of that company.
For the purposes of subsection (2) the “relevant period” is the period of 3 years ending immediately before the time at which the shares in the acquiring company are issued (or first issued) as consideration for the acquisition.
... neither of the following are disqualifying arrangements—
the arrangements for the issue of shares in the acquiring company which is the consideration for the acquisition mentioned in section 77(3);
any relevant merger arrangements.
In subsection (3) “relevant merger arrangements” means arrangements for the issue of shares in the acquiring company to the shareholders of a company (“company B”) other than the target company (“company A”) in a case where— and in section 77(3)(e) to (h) and (3A) as they apply by virtue of this subsection, references to the target company are to be read as references to company B.
that issue of shares to the shareholders of company B would be the only consideration for the acquisition by the acquiring company of the whole of the issued share capital of company B,
the conditions in section 77(3)(c) and (e) would be met in relation to that acquisition (if that acquisition were made in accordance with the arrangements), and
the conditions in paragraphs (f) to (h) of section 77(3) would be met in relation to that acquisition if—
that acquisition were made in accordance with the arrangements, and
the shares in the acquiring company issued as consideration for the acquisition of the share capital of company A were ignored for the purposes of those paragraphs;
Where—
arrangements within any paragraph of subsection (3) are part of a wider scheme or arrangement, and
that scheme or arrangement includes other arrangements which— those other arrangements are disqualifying arrangements despite anything in subsection (3).
fall within subsection (2), and
do not fall within any paragraph of subsection (3),
The Treasury may by regulations amend subsection (2) or (2A) so as to alter the percentage or length of the period for the time being specified there.
The power to make regulations under subsection (5A) is exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.
In this section—
“the acquiring company” has the meaning given by section 77(1);
a UK regulated market, within the meaning of Regulation (EU) No. 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments;
a Reserved Investor Fund (Contractual Scheme);
which provides arrangements for separate pooling of the contributions of participants and of the profits or income out of which payments are to be made to them, and
Stamp duty is not chargeable on the transfer of stock or marketable securities by—
an instrument listed in subsection (2), or
an instrument made under an instrument listed in subsection (2).
The instruments are—
a mandatory reduction instrument made in accordance with section 6B of the Banking Act 2009 (mandatory write-down, conversion etc of capital instruments),
a share transfer instrument or property transfer instrument made in accordance with section 12(2) of that Act (transfer to a bridge bank),
a property transfer instrument made in accordance with section 12ZA(3) of that Act (transfer to asset management vehicle),
a resolution instrument made in accordance with section 12A of that Act (bail-in),
a share transfer order or share transfer instrument made in accordance with section 13(2) of that Act (share transfer),
a supplemental share transfer instrument made in accordance with section 26 of that Act, where the original instrument was made in accordance with section 12(2) or 13(2) of that Act,
a supplemental share transfer order made in accordance with section 27 of that Act,
a property transfer instrument made in accordance with section 41A(2) of that Act (transfer of property subsequent to resolution instrument),
a supplemental property transfer instrument made in accordance with section 42(2) of that Act where the original instrument was made in accordance with section 12(2), 12ZA(3) or 41A(2) of that Act,
a bridge bank supplemental property transfer instrument made in accordance with section 44D(2) of that Act,
a property transfer order made in accordance with section 45(2) of that Act,
a supplemental resolution instrument made in accordance with section 48U(2) of that Act,
an onward transfer resolution instrument made in accordance with section 48V of that Act in the circumstances set out in subsection (3),
an order under section 85 of that Act (temporary public ownership: building societies), ...
a third-country instrument made in accordance with section 89H(2) or 89I(4) of that Act.
a share transfer instrument or property transfer instrument made in accordance with paragraph 29(3) (bridge central counterparty) of Schedule 11 to the Financial Services and Markets Act 2023 (central counterparties),
a share transfer instrument made in accordance with paragraph 30(2) of that Schedule (transfer of ownership),
a write-down instrument made in accordance with paragraph 34(2) of that Schedule (write-down power),
a supplemental share transfer instrument made in accordance with paragraph 49 of that Schedule (supplemental instruments), where the original instrument was made in accordance with paragraph 29(3) or 30(2) of that Schedule,
a property transfer instrument made in accordance with paragraph 66(2) of that Schedule (transfer of property subsequent to resolution instrument),
a supplemental property transfer instrument made in accordance with paragraph 67(2) of that Schedule (supplemental instruments) where the original instrument was made in accordance with paragraph 29(3) of that Schedule,
a bridge central counterparty supplemental property transfer instrument made in accordance with paragraph 73(2) of that Schedule (bridge central counterparty: supplemental property transfer powers),
a supplemental resolution instrument made in accordance with paragraph 82(2) of that Schedule (supplemental resolution instruments), or
a third-country instrument made in accordance with paragraph 145(2) (third-country resolution actions) or 146(4) (effects of recognition on third-country resolution action) of that Schedule.
The circumstances referred to in subsection (2)(m) are that the transfer—
is to a person within section 67(6), (7) or (8) or section 70(6), (7) or (8) of this Act (depositary receipt issuers, clearance services), and
is made by way of compensation to a creditor of the financial institution in respect of which the original instrument (within the meaning of section 48V of the Banking Act 2009) was made.
References in this section to a provision of the Banking Act 2009 include references to that provision as applied by or under any other provision of that Act (including where it is applied with modifications or in a substituted form).
A tax, to be known as stamp duty reserve tax, shall be charged in accordance with this Part of this Act.
The tax shall be under the care and management of the Board.
Section 1 of the Provisional Collection of Taxes Act 1968 shall apply to the tax; and accordingly in subsection (1) of that section after the words “petroleum revenue tax” there shall be inserted the words “ stamp duty reserve tax ”.
Stamp duty reserve tax shall be chargeable in accordance with the provisions of this Part of this Act—
whether the agreement, transfer, issue or appropriation in question is made or effected in the United Kingdom or elsewhere, and
whether or not any party is resident or situate in any part of the United Kingdom.
This section applies where a person (A) agrees with another person (B) to transfer chargeable securities (whether or not to B) for consideration in money or money's worth.
There shall be a charge to stamp duty reserve tax under this section on . . . the relevant day, . . .
In subsection (2) above “the relevant day” means —
in a case where the agreement is conditional, the day on which the condition is satisfied, and
in any other case, the day on which the agreement is made.
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Tax under this section shall be charged at the rate of 0.5 per cent. or part of £100 of the amount or value of the consideration mentioned in subsection (1) above.
For the purposes of subsection (6) above the value of any consideration not consisting of money shall be taken to be the price it might reasonably be expected to fetch on a sale in the open market at the time the agreement mentioned in subsection (1) above is made.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Where— in relation to some of the chargeable securities to which the agreement between A and B relates if separate agreements had been made between them for the transfer of those securities and for the transfer of the remainder, this section and sections 88(5) and 92 below shall have effect as if such separate agreements had been made.
there would be no charge to tax under this section, or
there would, under section 92 below, be a repayment or cancellation of tax,
This section applies where the agreement to transfer is made on or after the day on which the rule of The Stock Exchange that prohibits a person from carrying on business as both a broker and a jobber is abolished.
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This section has effect subject to sections 88 to 90 below.
An instrument on which stamp duty is not chargeable by virtue of — shall be disregarded in construing section 92(1A) and (1B) below.
section 127(1) of the Finance Act 1976 (transfer to stock exchange nominee), or
paragraph 24(d) of Schedule 13 to the Finance Act 1999 (renounceable letters of allotment etc.),
section 84(2) or (3) above,, or
Part I of Schedule 19 to the Finance Act 1999 (transfers etc. of units in unit trusts),
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
is exempt from stamp duty under that heading by virtue of exemption 3 in that heading, or
would be so exempt if it were otherwise chargeable under that heading.
An instrument on which stamp duty is not chargeable by virtue of section 186 of the Finance Act 1996 (transfers of securities to members of electronic transfer systems etc) shall be disregarded in construing section 92(1A) and (1B) below unless— and in this subsection “stock exchange nominee” means a person designated for the purposes of section 127 of the Finance Act 1976 as a nominee of The Stock Exchange by an order made by the Secretary of State under subsection (5) of that section.
the transfer is made by a stock exchange nominee; and
the maximum stamp duty chargeable on the instrument, apart from section 186 of the Finance Act 1996, would be £5;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
in subsection (2) the words from "unless" to the end;
subsections (4), (5) and (8).
An 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 (transfer between associated bodies corporate) shall be disregarded in construing section 92(1A) and (1B) below in any case where—
the property mentioned in section 42(2)(a) of the Finance Act 1930 or, as the case may be, section 11(2)(a) of the Finance Act (Northern Ireland) 1954 consists of or includes chargeable securities of any particular kind acquired in the period of two years ending with the day on which the instrument was executed; and
the body corporate from which the conveyance or transfer there mentioned is effected acquired any of those chargeable securities—
in a transaction which was given effect by an instrument of transfer on which stamp duty was not chargeable by virtue of section 80A above;
in pursuance of an agreement to transfer securities as regards which section 87 above did not apply by virtue of section 88A below; . . .
in pursuance of an agreement to transfer securities which was made for the purpose of performing the obligation to transfer chargeable securities described in section 89AA(1)(a) below and as regards which section 87 above did not apply by virtue of section 89AA(2) below; or
in circumstances with regard to which the charge to stamp duty or stamp duty reserve tax was treated as not arising by virtue of regulations under section 116 or 117 of the Finance Act 1991.
Where— then, if section 80D does not apply, the instrument shall be disregarded in construing section 92(1A) and (1B) below.
there is an arrangement falling within subsection (1) of section 80C above (stamp duty relief for transfers in accordance with certain arrangements for B to transfer stock to A or his nominee and for A or his nominee to transfer stock of the same kind and amount back to B or his nominee), and
under the arrangement stock is transferred to A or his nominee by an instrument on which stamp duty is not chargeable by virtue only of section 80C(2) above, but
it becomes apparent that stock of the same kind or amount will not be transferred to B or his nominee by A or his nominee in accordance with the arrangement,
Where— the instrument shall be deemed to be duly stamped under section 80C(5) above, but shall be disregarded in construing section 92(1A) and (1B) below.
an instrument transferring stock in accordance with an arrangement is stamped under section 80C(5) above, but
the instrument should not have been so stamped because the arrangement fell within section 80C(4)(a) or (b) above, and
apart from section 80C above stamp duty would have been chargeable on the instrument,
If chargeable securities cannot (apart from this subsection) be identified for the purposes of subsection (1B) above, securities shall be taken as follows, that is to say, securities of the same kind acquired later in the period of two years there mentioned (and not taken for the purposes of that subsection in relation to an earlier instrument) shall be taken before securities acquired earlier in that period.
If, in the case of an agreement (or of two or more agreements between the same parties) to transfer chargeable securities— stamp duty reserve tax shall be repaid or cancelled under section 92 below in accordance with subsection (5A) below.
the conditions in section 92(1A) and (1B) below are not satisfied by virtue only of the application of subsection (1B) above in relation to the instrument (or any one or more of the two or more instruments) in question, but
not all of the chargeable securities falling to be regarded for the purposes of that subsection as transferred by the instrument (or by the two or more instruments between them) were acquired as mentioned in paragraphs (a) and (b) of that subsection,
Any repayment or cancellation of tax falling to be made by virtue of subsection (5) above shall be determined as if (without prejudice to section 87(7A) above) there had, instead of the agreement (or the two or more agreements) in question been— and as if the instrument in question (or the two or more instruments in question between them) had related only to such of the securities as do not fall within those paragraphs.
a separate agreement (or two or more separate agreements) relating to such of the securities as were acquired as mentioned in paragraphs (a) and (b) of subsection (1B) above, and
a single separate agreement relating to such of the securities as do not fall within those paragraphs,
Where a person enters into an agreement for securities to be transferred to him or his nominee, the securities shall be treated for the purposes of subsections (1B)(a) and (4) above as acquired by that person at the time when he enters into the agreement, unless the agreement is conditional, in which case they shall be taken to be acquired by him when the condition is satisfied.
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Section 87 above shall not apply as regards an agreement to transfer securities if the agreement is made by B in the ordinary course of his business as a market maker in securities of the kind concerned.
Section 87 above shall not apply as regards an agreement to transfer securities to B or his nominee if—
the agreement is made by B as principal in the ordinary course of his business as a broker and dealer in relation to securities of the kind concerned, and
before the end of the period of 7 days beginning with the day on which the agreement is made or (in a case where the agreement is conditional) the day on which the condition is satisfied, B enters into an unconditional agreement to sell the securities to another person.
For the purposes of this section, a person is a market maker in securities of a particular kind if he—
holds himself out at all normal times in compliance with the rules of The Stock Exchange as willing to buy and sell securities of that kind at a price specified by him, and
is recognised as doing so by the Council of The Stock Exchange.
For the purposes of this section, a person is a broker and dealer in relation to securities of a particular kind if he is a member of The Stock Exchange who carries on his business in the United Kingdom and is not a market maker in securities of that kind.
The Treasury may by regulations provide that for subsection (3) above (as it has effect for the time being) there shall be substituted a subsection containing a different definition of a market maker for the purposes of this section.
The Treasury may by regulations provide that for subsection (4) above (as it has effect for the time being) there shall be substituted a subsection containing a different definition of a broker and dealer for the purposes of this section.
For the purposes of subsection (2) above, if the securities which B sells cannot be identified (apart from this subsection) securities shall be taken as follows—
securities of the same kind acquired in the period of 7 days ending with the day of the sale (and not taken for the purposes of a previous sale by B) shall be taken before securities of that kind acquired outside that period;
securities of that kind acquired earlier in that period (and not taken for the purposes of a previous sale by B) shall be taken before securities of that kind acquired later in that period.
For the purposes of subsection (7) above—
securities are acquired when B enters into an agreement for them to be transferred to B or his nominee or (in a case where the agreement is conditional) when the condition is satisfied;
B sells securities when he enters into an unconditional agreement to sell them to another person.
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.
Section 87 above shall not apply as regards an agreement to transfer securities of a particular kind to B or B's nominee if—
B is a member of a regulated market on which securities of that kind are regularly traded; and
B is an intermediary and is recognised as such by the market in accordance with arrangements approved by the Commissioners for Her Majesty's Revenue and Customs (“the Commissioners”).
Section 87 above shall not apply as regards an agreement to transfer securities of a particular kind to B or B's nominee if—
B is a member of a multilateral trading facility, or a recognised foreign exchange, on which securities of that kind are regularly traded;
B is an intermediary and is recognised as such by the facility or exchange in accordance with arrangements approved by the Commissioners; and
the agreement is effected on the facility or exchange.
Section 87 above shall not apply as regards an agreement to transfer securities of a particular kind to B or B's nominee if—
B is an intermediary who is approved for the purposes of this section by the Commissioners; and
securities of that kind are regularly traded on a regulated market.
Section 87 above shall not apply as regards an agreement to transfer securities of a particular kind to B or B's nominee if—
B is an intermediary who is approved for the purposes of this section by the Commissioners;
securities of that kind are regularly traded on a multilateral trading facility or a recognised foreign exchange; and
the agreement is effected on the facility or exchange.
Section 87 above shall not apply as regards an agreement to transfer securities of a particular kind to B or B's nominee if—
B is a member of a regulated market, a multilateral trading facility or a recognised foreign options exchange;
options to buy or sell securities of that kind are regularly traded on, and are listed by or quoted on, that market, facility or exchange;
B is an options intermediary and is recognised as such by that market, facility or exchange in accordance with arrangements approved by the Commissioners; and
securities of that kind are regularly traded on a regulated market.
Section 87 above shall not apply as regards an agreement to transfer securities of a particular kind to B or B's nominee if— and in paragraph (d) “relevant qualifying exchange” means a multilateral trading facility, a recognised foreign options exchange or a recognised foreign exchange.
B is a member of a regulated market, a multilateral trading facility or a recognised foreign options exchange;
options to buy or sell securities of that kind are regularly traded on, and are listed by or quoted on, that market, facility or exchange;
B is an options intermediary and is recognised as such by that market, facility or exchange in accordance with arrangements approved by the Commissioners; and
the agreement is effected on a relevant qualifying exchange on which securities of that kind are regularly traded or is effected on a relevant qualifying exchange pursuant to the exercise of a relevant option and options to buy or sell securities of that kind are regularly traded on, and are listed by or quoted on, that exchange;
Section 87 above shall not apply as regards an agreement to transfer securities of a particular kind to B or B's nominee if—
B is an options intermediary who is approved for the purposes of this section by the Commissioners;
options to buy or sell securities of that kind are regularly traded on, and are listed by or quoted on, a regulated market, a multilateral trading facility or a recognised foreign options exchange; and
securities of that kind are regularly traded on a regulated market.
Section 87 above shall not apply as regards an agreement to transfer securities of a particular kind to B or B's nominee if— and in paragraph (c) “relevant qualifying exchange” means a multilateral trading facility, a recognised foreign options exchange or a recognised foreign exchange.
B is an options intermediary who is approved for the purposes of this section by the Commissioners;
options to buy or sell securities of that kind are regularly traded on, and are listed by or quoted on, a regulated market, a multilateral trading facility or a recognised foreign options exchange; and
the agreement is effected on a relevant qualifying exchange on which securities of that kind are regularly traded or is effected on a relevant qualifying exchange pursuant to the exercise of a relevant option and options to buy or sell securities of that kind are regularly traded on, and are listed by or quoted on, that exchange;
For the purposes of this section—
an intermediary is a person who carries on a bona fide business of dealing in chargeable securities and does not carry on an excluded business; and
an options intermediary is a person who carries on a bona fide business of dealing in quoted or listed options to buy or sell chargeable securities and does not carry on an excluded business.
The excluded businesses are the following—
any business which consists wholly or mainly in the making or managing of investments;
any business which consists wholly or mainly in, or is carried on wholly or mainly for the purpose of, providing services to persons who are connected with the person carrying on the business;
any business which consists in insurance business;
any business which consists in managing or acting as trustee in relation to a pension scheme or which is carried on by the manager or trustee of such a scheme in connection with or for the purposes of the scheme;
any business which consists in operating or acting as trustee in relation to a collective investment scheme or is carried on by the operator or trustee of such a scheme in connection with or for the purposes of the scheme.
An agreement is effected on a facility or an exchange for the purposes of this section if (and only if)—
it is subject to the rules of the facility or exchange; and
it is reported to the facility or exchange in accordance with the rules of the facility or exchange .
The Commissioners may approve a person for the purposes of this section only if the person
is authorised under the law of an EEA State or Gibraltar to provide any of the investment services or activities listed in Section A 2 or 3 of Annex I to the Directive (execution of orders on behalf of clients and dealing on own account), whether or not the person is authorised under the Directive or
has permission under the Financial Services and Markets Act 2000 to carry on any of the investment services or activities in paragraph 2 or 3 of Part 3 of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.
Section 87 above shall not apply as regards an agreement to transfer a unit under a unit trust scheme to or from the managers under the scheme.
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all the trustees under the scheme are resident outside the United Kingdom, and
the unit is not registered in a register kept in the United Kingdom by or on behalf of the trustees under the scheme.
Section 87 above shall not apply as regards an agreement to transfer a unit under a unit trust scheme if an instrument executed at the same time as the agreement and giving effect to the agreement would be exempt from stamp duty (if stamp duty were otherwise chargeable) by virtue of—
section 42 of the Finance Act 1930 or section 11 of the Finance Act (Northern Ireland) 1954 (transfers between associated companies), or
regulations under section 87(2) of the Finance Act 1985 (power to exempt instruments from stamp duty of fixed amount) , or
section 96 of the Finance Act 1997 (demutualisation of insurance companies).
Section 87 above shall not apply as regards an agreement to transfer securities constituted by or transferable by means of —
a non-UK bearer instrument;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 87 above shall not apply as regards an agreement to transfer trust property to the unit holder on the surrender to the managers of a unit under a unit trust scheme if the unit holder is to receive only such part of each description of asset in the trust property as is proportionate to, or as nearly as practicable proportionate to, the unit holder's share. For these purposes there is a surrender of a unit where— and the unit is a chargeable security.
a person (“P”) authorises or requires the trustees or managers of a unit trust scheme to treat P as no longer interested in a unit under the scheme, or
a unit under the unit trust scheme is transferred to the managers of the scheme,
Section 87 above shall not apply as regards an agreement which forms part of an arrangement.
falling within section 93(1) or 96(1) below , or
which would fall within section 93(1) or section 96(1) if the references in section 93 or section 96 (as the case may be) to the transfer of chargeable securities included the issue of chargeable securities.
Section 87 above shall not apply as regards an agreement to transfer securities which the Board are satisfied are held, when the agreement is made, by a person within subsection (6) below.
as nominee or agent for a person whose business is or includes the provision of clearance services for the purchase and sale of chargeable securities, and
for the purposes of such part of the business mentioned in paragraph (a) above as consists of the provision of such clearance services (in a case where the business does not consist exclusively of that).
Section 87 above shall not apply as regards an agreement to transfer chargeable securities constituted by or transferable by means of a UK bearer instrument unless subsection (3B), (3C) or (3E) below applies to the instrument.
This subsection applies to any instrument which falls within the exemption conferred by paragraph 16 of Schedule 15 to the Finance Act 1999 (renounceable letters of allotment etc.).
This subsection applies to an instrument if—
the instrument was issued by a body corporate incorporated in the United Kingdom (other than an SE which has its registered office outside the United Kingdom following a transfer in accordance with Article 8 of Council Regulation (EC) 2157/2001 on the Statute for a European Company (Societas Europaea)); and
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the instrument is not exempt.
An instrument is exempt for the purposes of subsection (3C) above if—
the chargeable securities in question are, or a depositary receipt for them is, listed on a recognised stock exchange; and
the agreement to transfer those securities is not made in contemplation of, or as part of an arrangement for, a takeover of the body corporate which issued the instrument.
This subsection applies to an instrument if—
the instrument was issued by a body corporate incorporated in the United Kingdom (other than an SE which has its registered office outside the United Kingdom following a transfer in accordance with Article 8 of Council Regulation (EC) 2157/2001 on the Statute for a European Company (Societas Europaea));
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by virtue of section 79(5) (convertible loan capital) or 79(6) (loan capital carrying special rights) above, stamp duty would be chargeable on an instrument transferring the loan capital to which the instrument relates; and
the instrument is not exempt.
An instrument is exempt for the purposes of subsection (3E) above if—
the chargeable securities in question are, or a depositary receipt for them is, listed on a recognised stock exchange;
the agreement to transfer those securities is not made in contemplation of, or as part of an arrangement for, a takeover of the body corporate which issued the instrument; and
those securities do not carry any right of the kind described in section 79(5) above (right of conversion into, or acquisition of, shares or other securities) by the exercise of which chargeable securities which are not listed on a recognised stock exchange may be obtained.
A person is within this subsection if his business is exclusively that of holding shares, stock or other marketable securities —
as nominee or agent for a person whose business is or includes the provision of clearance services for the purchase and sale of shares, stock or other marketable securities, and
for the purpose of such part of the business mentioned in paragraph (a) above as consists of the provision of such clearance services (in a case where the business does not consist exclusively of that); and in this subsection, 'marketable securities' shall be construed in accordance with section 122(1) of the Stamp Act 1891 .
Section 87 above shall not apply as regards an agreement to transfer securities to —
a charitable company, or
the trustees of a charitable trust, or
the Trustees of the National Heritage Memorial Fund, or
the Historic Buildings and Monuments Commission for England. ...
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Section 87 above does not apply as regards an agreement to transfer any shares in a company which are held by the company (whether in accordance with section 724 of the Companies Act 2006 (treasury shares) or otherwise).
Section 87 above does not apply as regards—
an agreement to transfer chargeable securities—
to a depositary under a co-ownership contractual scheme, to be held as part of the property subject to the scheme, in exchange for the issue of units in the scheme (and for no other consideration);
in relation to a co-ownership contractual umbrella scheme, on transfers between sub-schemes;
an agreement to transfer units in a co-ownership contractual scheme.
In subsection (7B) and this subsection—
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Subsection (7B) shall not apply where the agreement forms part of arrangements of which the main purpose, or one of the main purposes, is the avoidance of stamp duty or stamp duty reserve tax.
For the purposes of subsections (3D) and (3F) above—
references to a depositary receipt for chargeable securities shall be construed in accordance with section 94(1) below;
references to anything listed on a recognised stock exchange shall be construed in accordance with section 1005 of the Income Tax Act 2007;
there is a takeover of a body corporate if a person, on his own or together with connected persons, loses or acquires control of it.
For the purposes of subsection (8) above—
any question whether a person is connected with another shall be determined in accordance with section 286 of the Taxation of Chargeable Gains Act 1992;
“control” shall be construed in accordance with sections 450 and 451 of the Corporation Tax Act 2010 .
For the purposes of section 88A above the question whether a person is connected with another shall be determined in accordance with the provisions of section 1122 of the Corporation Tax Act 2010.
In section 88A above and this section—
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In section 88A above “the exercise of a relevant option” means—
the exercise by B of an option to buy securities; or
the exercise of an option binding B to buy securities.
The Treasury may by regulations amend section 88A above and this section (as they have effect for the time being) in order to extend the exemption from tax under that section.
The Treasury may by regulations provide that section 88A above shall not have effect in relation to kinds of agreement specified in the regulations.
The Treasury may by regulations provide that if— section 87 shall apply to the agreement but with the substitution of a rate of tax not exceeding 0.1 per cent. for the rate specified in subsection (6) of that section.
an agreement falls within any of subsections (1) to (2C) of section 88A above, and
section 87 above would, apart from section 88A, apply to the agreement,
The Treasury may by regulations change the meaning of “intermediary” or “options intermediary” for the purposes of section 88A above by amending subsection (4) or (5) of that section (as it has effect for the time being).
The power to make regulations under subsections (3A) to (6) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.
Where tax is charged under section 87 above as regards an agreement, B shall be liable for the tax.
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If, as regards an agreement to transfer securities to B or his nominee, tax is charged under section 87 above and it is proved to the Board's satisfaction that at a time on or after the relevant day (as defined in section 87(3)) but before the expiry of the period of six years (beginning with that day) the conditions mentioned in subsections (1A) and (1B) below have been fulfilled, subsections (2) to (4A) of this section shall apply.
If any of the tax charged has been paid, and a claim for repayment is made within the period of six years mentioned in subsection (1) or, as the case may be, (1C) above, the tax paid shall be repaid; and where the tax paid is not less than £25 it shall be repaid with interest on it at the rate applicable under section 178 of the Finance Act 1989 from the time it was paid.
The first condition is that an instrument is (or instruments are) executed in pursuance of the agreement and the instrument transfers (or the instruments between them transfer) to B or, as the case may be, to his nominee all the chargeable securities to which the agreement relates.
To the extent that the tax charged has not been paid, the charge shall be cancelled by virtue of this subsection.
The second condition is that the instrument (or each instrument) transferring the chargeable securities to which the agreement relates—
so far as those securities are stock or marketable securities within the meaning of section 125 of the Finance Act 2003 (abolition of stamp duty except on instruments relating to stock or marketable securities)—
is duly stamped in accordance with the enactments relating to stamp duty, or
is not chargeable with stamp duty or otherwise required to be stamped under those enactments; or
so far as those securities are not stock or marketable securities within the meaning of that section, is an instrument that, disregarding that section, would not be chargeable with any ad valorem stamp duty under those enactments.
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If, as regards an agreement to transfer shares in a company to that company (“the own-shares agreement”)— subsections (2) to (4A) apply.
tax is charged under section 87 above, and
it is proved to the Board’s satisfaction that at a time in the period of six years beginning on the relevant day (as defined in section 87(3)) the conditions mentioned in subsection (1D) have been fulfilled in respect of those shares,
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The conditions referred to in subsection (1C) are—
that, in relation to the transfer made in pursuance of the own-shares agreement, a return has been made in respect of each of those shares in accordance with section 707 of the Companies Act 2006 (disclosure by company of purchase of own shares), and
that any such return has been duly stamped in accordance with section 66.
Interest paid under subsection (2) above shall not constitute income for any tax purposes.
In this section “the enactments relating to stamp duty” means the Stamp Act 1891 and any enactment which amends or is required to be construed together with that Act.
This section shall have effect in relation to a person to whom the chargeable securities are transferred by way of security for a loan to B as it has effect in relation to a nominee of B.
Section 87 above shall not apply as regartds an agreement to transfer securities other than units under a unit trust scheme to B or B's nominee if —
the agreement is part of an arrangement, entered into by B in the ordinary course of B's business as an issuing house, under which B (as principal) is to offer the securities for sale to the public,
the agreement is conditional upon the admission of the securities to the Offical List of The Stock Exchange,
the consideration under the agreement for each security is the same as the price at which B is to offer the security for sale, and
B sells the securities in accordance with the arrangement referred to in paragraph (a) above.
Section 87 above shall not apply as regards an agreement if the securities to which the agreement relates are newly subscribed securities other than units under a unit trust scheme and — and for the purposes of this subsection, “newly subscribed securities” are securities which, in pursuance of the arrangement referred to in paragraph (a) above, are issued wholly for new consideration.
the agreement is made in pursuance of an offer to the public made by A (as principal) under an arrangement entered into in the ordinary course of A's business as an issuing house,
a right of allotment in respect of, or to subscribe for, the securities has been acquired by A under an agreement which is part of the arrangement,
both those agreements are conditional upon the admission of the securities to the Offical List of The Stock Exchange, and
the consideration for each security is the same under both agreements;
Section 87 above shall not apply as regards an agreement if the securities to which the agreement relates are registered securities other than units under a unit trusty scheme and —
the agreement is made in pursuance of an offer to the public made by A,
the agreement is conditional upon the admission of the securities to the Offical List of The Stock Exchange, and
under the agreement A issues to B or his nominee a renounceable letter of acceptance, or similar instrument, in respect of the securities.
The Treasury may by regulations amend paragraph (b) of subsection (1) above, paragraph (c) of subsection (2) above, and paragraph (b) of subsection (3) above (as they have effect for the time being); and 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 where a person (P) has entered into an arrangement with another person (Q) under which— and the conditions set out in subsection (2A) or (3) below are fulfilled.
Q is to transfer chargeable securities of a particular kind to P or his nominee, and
chargeable securities of the same kind and amount are to be transferred by P or his nominee to Q or his nominee,
Section 87 above shall not apply as regards an agreement to transfer chargeable securities to P or his nominee or Q or his nominee in accordance with the arrangement.
The conditions in this subsection are—
that P or Q
is authorised under the law of an EEA State or Gibraltar to provide any of the investment services or activities listed in Section A 2 or 3 of Annex I to the Directive (execution of orders on behalf of clients and dealing on own account) in relation to securities of the kind concerned, whether or not P or Q is authorised under the Directive; ... or
has permission under the Financial Services and Markets Act 2000 to carry on any of the investment services or activities in paragraph 2 or 3 of Part 3 of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;
that securities of the kind concerned are regularly traded on a regulated market; and
that chargeable securities are transferred to P or his nominee and Q or his nominee in pursuance of the arrangement.
The conditions in this subsection are—
that the agreement is effected on a regulated market, a multilateral trading facility or a recognised foreign exchange;
that securities of the kind concerned are regularly traded on that market, facility or exchange; and
that chargeable securities are transferred to P or his nominee and Q or his nominee in pursuance of the arrangement.
An arrangement does not fall within subsection (1) above if—
the arrangement is not such as would be entered into by persons dealing with each other at arm’s length; or
under the arrangement any of the benefits or risks arising from fluctuations, before the transfer to Q or his nominee takes place, in the market value of the chargeable securities accrues to, or falls on, P.
An agreement is effected on a market, a facility or an exchange for the purposes of subsection (3) above if (and only if)—
it is subject to the rules of the market, facility or exchange; and
it is reported to the market, facility or exchange in accordance with the rules of the market, facility or exchange.
In this section—
...
“Bearer instrument” has the same meaning as in Schedule 15 to the Finance Act 1999.
“Chargeable securities” does not include securities falling within paragraph (a), (b) or (c) of subsection (3) above if—
they are securities issued or raised by an SE (whether or not in the course of its formation in accordance with Article 2 of Council Regulation (EC) 2157/2001 on the Statute for a European Company (Societas Europaea), ...
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Chargeable securities” does not include securities falling within paragraph (a), (b) or (c) of subsection (3) which are admitted to trading on a recognised growth market but not listed on that or any other market.
In subsection (4B), “listed” and “recognised growth market” are to be construed in accordance with section 99A.
“Chargeable securities” does not include securities falling within paragraph (b) or (c) of subsection (3) above if the stocks, shares or loan capital to which the securities relate—
are stock or marketable securities within the meaning of section 125 of the Finance Act 2003 (abolition of stamp duty except on instruments relating to stock or marketable securities) the transfer of which is exempt from all stamp duties, or
are securities the transfer of which, disregarding that section, would be exempt from all stamp duties.
“Chargeable securities” does not include a unit under a unit trust scheme if—
all the trustees under the scheme are resident outside the United Kingdom and the unit is not registered in a register kept in the United Kingdom by or on behalf of the trustees under the scheme; or
under the terms of the scheme the trust property can only be invested in exempt investments.
For the purposes of subsection (5A)(b)—
an investment other than an interest under a collective investment scheme is an exempt investment if, and only if—
it is not an investment on the transfer of which ad valorem stamp duty would be chargeable,...
it is not an investment on the acquisition of which stamp duty land tax would be chargeable under Part 4 of the Finance Act 2003, and
it is not a chargeable security;
an interest under a collective investment scheme is an exempt investment , unless subsection (5C) applies to the scheme;
a derivative is an exempt investment if, and only if, it relates wholly to one or more exempt investments; and
funds held for the purposes of the day to day management of the unit trust scheme are not regarded as investments.
“regulated market” has the meaning given in section 80B(2).
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The Treasury may by regulations provide that if section 87 would apply as regards an agreement but for subsection (2) above, section 87 shall apply as regards the agreement but with the substitution of a rate of tax not exceeding 0.1 per cent. for the rate specified in subsection (6) of that section.
The Treasury may by regulations amend this section (as it has effect for the time being) in order—
to change the conditions for exemption from tax under this section; or
to provide that this section does not apply in relation to kinds of arrangement specified in the regulations.
The power to make regulations under subsection (7) or (8) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.
This section applies where—
P and Q have entered into an arrangement falling within section 89AA(1),
the only reason that the conditions in subsection (2A) or (3) of that section are not met is that chargeable securities of the same kind and amount as those transferred to P or P's nominee are not transferred to Q or Q's nominee, and
the conditions in subsection (2) below are met.
The conditions in this subsection are that—
P and Q are not connected persons within the meaning of section 1122 of the Corporation Tax Act 2010,
after Q has transferred securities under the arrangement, either P or Q becomes insolvent,
it becomes apparent (whether before or after the insolvency occurs) that, as a result of the insolvency, securities will not be transferred to Q or Q's nominee in accordance with the arrangement.
Section 87 does not apply as regards an agreement to transfer chargeable securities to P or P's nominee, or Q or Q's nominee, in accordance with the arrangement.
Subsections (5) and (6) apply if—
the party who does not become insolvent (“the solvent party”) or the solvent party's nominee acquires replacement securities, and
the replacement securities are acquired before the end of the period of 30 days beginning with the day on which the insolvency occurs (“the insolvency date”).
Where collateral is provided under the arrangement (or under arrangements of which that arrangement forms part), section 87 does not apply as regards any agreement to transfer to the solvent party or the solvent party's nominee—
replacement securities acquired using the collateral (whether directly or indirectly), or
where the solvent party uses the whole of the value of the collateral to acquire replacement securities, any further replacement securities.
Where no collateral is provided as mentioned in subsection (5), section 87 does not apply as regards any agreement to transfer replacement securities to the solvent party or the solvent party's nominee.
Subsections (5) and (6) may apply as regards more than one agreement (and where those subsections apply as regards more than one agreement, the agreements may be with different persons).
But those subsections apply only as regards replacement securities up to the amount of securities which will not be transferred as a result of the insolvency.
For the purposes of this section a person becomes insolvent—
if a company voluntary arrangement takes effect under Part 1 of the Insolvency Act 1986,
if an administration application (within the meaning of Schedule B1 to that Act) is made or a receiver or manager, or an administrative receiver, is appointed,
on the commencement of a creditor's voluntary winding up (within the meaning of Part 4 of that Act) or a winding up by the court under Chapter 6 of that Part,
if an individual voluntary arrangement takes effect under Part 8 of that Act,
on the making of a bankruptcy application or presentation of a bankruptcy petition (within the meaning of Part 9 of that Act),
if a compromise or arrangement takes effect under Part 26 or 26A of the Companies Act 2006,
if a bank insolvency order takes effect under Part 2 of the Banking Act 2009,
if a bank administration order takes effect under Part 3 of that Act, ...
if a special administration order takes effect under the Investment Bank Special Administration Regulations 2011, ...
if a special administration order takes effect under the Payment and Electronic Money Institution Insolvency Regulations 2021, or
on the occurrence of any corresponding event which has effect under or as a result of the law of Scotland or Northern Ireland or a country or territory outside the United Kingdom.
In this section—
Where a person (P) has contracted to sell chargeable securities of a particular kind in the ordinary course of his business as a market maker in chargeable securities of that kind and, to enable him to fulfil the contract, he enters into an arrangement under which— section 87 above shall not apply as regards an agreement to transfer chargeable securities which is made for the purpose of performing the obligation to transfer chargeable securities described in paragraph (a) or (b) above.
another person (Q) is to transfer chargeable securities to P or his nominee, and
in return, chargeable securities of the same kind and amount are to be transferred (whether or not by P or his nominee) to Q or his nominee,
Where the arrangement mentioned in subsection (1) above is also one under which— section 87 above shall also not apply as regards an agreement to transfer chargeable securities which is made for the purpose of performing the obligation to transfer chargeable securities described in paragraph (a) or (b) above.
an amount of chargeable securities of some other kind is to be transferred by P or his nominee to Q or his nominee by way of security for the performance of the obligation described in paragraph (b) of that subsection, and
on performance of that obligation, the securities mentioned in paragraph (a) above, or chargeable securities of the same kind and amount as those securities, are to be transferred to P or his nominee,
Where, to enable Q to make the transfer to P or his nominee which is mentioned in paragraph (a) of subsection (1) above, Q enters into an arrangement under which— section 87 above shall not apply as regards an agreement to transfer chargeable securities which is made for the purpose of performing the obligation to transfer chargeable securities described in paragraph (a) or (b) above.
another person (R) is to transfer chargeable securities to Q or his nominee, and
in return, chargeable securities of the same kind and amount are to be transferred (whether or not by Q or his nominee) to R or his nominee,
Where the arrangement mentioned in subsection (3) above is also one under which— section 87 above shall also not apply as regards an agreement to transfer chargeable securities which is made for the purpose of performing the obligation to transfer chargeable securities described in paragraph (a) or (b) above.
an amount of chargeable securities of some other kind is to be transferred by Q or his nominee to R or his nominee by way of security for the performance of the obligation described in paragraph (b) of that subsection, and
on performance of that obligation, the securities mentioned in paragraph (a) above, or chargeable securities of the same kind and amount as those securities, are to be transferred to Q or his nominee,
For the purposes of this section a person is a market maker in chargeable securities of a particular kind if he—
holds himself out at all normal times in compliance with the rules of The Stock Exchange as willing to buy and sell chargeable securities of that kind at a price specified by him, and
is recognised as doing so by The Stock Exchange.
The Treasury may by regulations provide that for subsection (5) above (as it has effect for the time being) there shall be substituted a subsection containing a different definition of a market maker for the purposes of this section.
Regulations under subsection (6) above shall apply in relation to any agreement to transfer chargeable securities in pursuance of an arrangement entered into on or after such day after 1st July 1996 as is specified in the regulations.
The power to make regulations under subsection (6) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.
Section 87 does not apply as regards an agreement to transfer chargeable securities in a listed company— if none of the following exclusions apply.
that was first listed after the beginning of the period of 3 years ending with the relevant day, and
whose shares are admitted to trading on a UK regulated market,
Exclusion A (listed company mergers) applies if the listing referred to in subsection (1)(a) was connected to arrangements by which—
a listed company took control of another listed company,
a company took control of two or more listed companies, or
two or more listed companies merged all or substantially all of their businesses.
Exclusion B (new holding company) applies if—
the listing referred to in subsection (1)(a) was connected to arrangements by which the company took control of another company, and
immediately before those arrangements, the other company was—
listed other than by reference to depositary interests, and
controlled by the person or persons who, at the time of the listing referred to in subsection (1)(a), controlled the company.
Exclusion C (change of control) applies if—
during the period beginning with the listing referred to in subsection (1)(a) and ending with the relevant day, there was a change of control in the company, or
the agreement to transfer forms part of arrangements changing control in the company.
In subsection (1)(a), the reference to a company being first listed is a reference to—
in the case of a company falling within subsection (6), the company first making a regulatory announcement to the effect that it has taken control of a company as described in subsection (6)(b), or
in other cases, shares in the company being admitted to the official list at a time when no other shares of the company were included in the official list.
A company falls within this subsection if—
shares in the company were admitted to the official list at a time when the company’s assets consisted wholly or mainly of cash or short-dated securities, and
the shares were admitted with a view to the company taking control of an unlisted company before the end of a certain period.
In this section—
a reference to a company being listed is a reference to shares in the company being included in the official list;
a reference to shares being included in the official list is a reference to shares—
being included in the official list in accordance with Part 6 of the Financial Services and Markets Act 2000 (“FSMA”) (see section 74 of that Act), or
not being included only by reason of suspension under that Part;
a reference to shares being admitted to the official list has the same meaning as in that Part;
a reference to shares includes a reference to depositary interests in shares.
In this section—
“arrangements” includes any preliminary steps taken in connection with arrangements;
... There shall be a charge to stamp duty reserve tax under this section where in pursuance of an arrangement —
a person falling within subsection (2) below has issued or is to issue a depositary receipt for chargeable securities, and
chargeable securities of the same kind and amount are transferred ... to the person mentioned in paragraph (a) above or a person falling within subsection (3) below, or are appropriated by the person mentioned in paragraph (a) above or a person falling within subsection (3) below towards the eventual satisfaction of the entitlement of the receipt's holder to receive chargeable securities.
A person falls within this subsection if his business is or includes issuing depositary receipts for chargeable securities.
The following provisions contain exceptions to the charge to stamp duty reserve tax under this section—
subsection (7) of this section (exception so far as stamp duty is chargeable);
section 95 (general exceptions);
section 95A (replacement securities);
section 97AB (exempt capital-raising transfers);
section 97AC (exempt listing transfers);
section 97AD (exception for transfers of shares held by issuing company);
section 97B (transfers between depositary receipt system and clearance system).
A person falls within this subsection if his business is or includes holding chargeable securities as nominee or agent for the person who has issued or is to issue the depositary receipt.
Subject to subsections (6) and (7) below, tax under this section shall be charged at the rate of 1.5 per cent. of the following—
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
in a case where the securities are transferred for consideration in money or money's worth—
the amount or value of the consideration, or
where subsection (4A) applies, the amount or value of the consideration or, if higher, the value of the securities;
in any other case, the value of the securities.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
the transfer is effected by an instrument on which stamp duty under the heading "Conveyance or Transfer of any kind not hereinbefore described" in Schedule 1 to the Stamp Act 1891 is chargeable,
at the time of the transfer the transferor is a qualified dealer in securities of the kind concerned or a nominee of such a qualified dealer,
the transfer is made for the purposes of the dealer's business,
at the time of the transfer the dealer is not a market maker in securities of the kind concerned, and
the instrument contains a statement that paragraphs (b) to (d) above are fulfilled,
In a case where— subsection (4)(c) above shall have effect as if the reference to the value there mentioned were to an amount (if any) equal to the total of the instalments payable, less those paid before the transfer to the other person is effected.
securities are issued, or securities sold are transferred, and (in either case) they are to be paid for in instalments,
the person to whom they are issued or transferred holds them and transfers them to another person when the last instalment is paid,
subsection (4)(c) above applies in the case of the transfer to the other person,
before the making of the transfer to the other person an instrument is received by a person falling within subsection (2) or (3) above,
the instrument so received evidences all the rights which (by virtue of the terms under which the securities are issued or sold as mentioned in paragraph (a) above) subsist in respect of them at the time of the receipt, and
the transfer to the other person is effected by an instrument containing a statement that paragraphs (a), (b) and (e) above are fulfilled,
This subsection applies where the transfer of the securities is pursuant to—
the exercise of an option to buy or to sell the securities, and
either—
a term of the option which provides for the securities to be transferred to the person falling within subsection (2) or (3), or
a direction, given by or on behalf of the person entitled or bound to acquire the securities pursuant to the exercise of the option, for the securities to be so transferred.
Where tax is (or would apart from this subsection be) charged under this section in respect of a transfer of securities, and ad valorem stamp duty is chargeable on any instrument effecting the transfer, then —
if the amount of the duty is less than the amount of tax found by virtue of subsections (4) and (6) above, the tax charged under this section shall be the amount so found less the amount of the duty;
in any other case, there shall be no charge to tax under this section in respect of the transfer.
Where tax is charged under the preceding provisions of this section, the person liable for the tax shall (subject to subsection (9) below) be the person who has issued or is to issue the depositary receipt.
Where tax is charged under the preceding provisions of this section in a case where securities are transferred, and at the time of the transfer the person who has issued or is to issue the depositary receipt is not resident in the United Kingdom and has no branch or agency in the United Kingdom, the person liable for the tax shall be the person to whom the securities are transferred.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
if any of the instalments becomes payable by a person falling within subsection (2) or (3) above, there shall be a charge to stamp duty reserve tax under this section when the instalment becomes payable;
the charge shall be at the rate of £1.50 for every £100 or part of £100 of the instalment payable;
the person liable to pay the instalment shall be liable for the tax.
Subject to subsection (12) below, this section applies where securities are transferred, issued or appropriated after 18th March 1986 (whenever the arrangement was made).
This section does not apply, in the case of securities which are transferred, if the Board are satisfied that they were acquired or appropriated by the transferor on or before 18th March 1986 for or towards the eventual satisfaction of the entitlement of a person to receive securities of the same kind under a depositary receipt (whether issued on or before that date or to be issued after that date).
For the purposes of sections 93 and 97AC a depositary receipt for chargeable securities is an instrument acknowledging — except that for those purposes a depositary receipt for chargeable securities does not include an instrument acknowledging rights in or in relation to securities if they are issued or sold under terms providing for payment in instalments and for the issue of the instrument as evidence that an instalment has been paid.
that a person holds chargeable securities or evidence of the right to receive them, and
that another person is entitled to rights, whether expressed as units or otherwise, in or in relation to chargeable securities of the same kind, including the right to receive such securities (or evidence of the right to receive them) from the person mentioned in paragraph (a) above,
The Treasury may by regulations provide that for subsection (1) above (as it has effect for the time being) there shall be substituted a subsection containing a different definition of a depositary receipt for the purposes of section 93 above.
For the purposes of section 93(4)(b) above the value of any consideration not consisting of money shall be taken to be the price it might reasonably be expected to fetch on a sale in the open market at the time the securities are transferred.
For the purposes of section 93(4)(b)(ii) and (c) above the value of the securities shall be taken to be the price they might reasonably be expected to fetch on a sale in the open market at the time they are transferred or appropriated (as the case may be).
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
is a member of a recognised stock exchange (within the meaning given by section 535 of the Taxes Act), or
is designated a qualified dealer by order made by the Treasury.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
holds himself out at all normal times in compliance with the rules of The Stock Exchange as willing to buy and sell securities of that kind at a price specified by him, and
is recognised as doing so by the Council of The Stock Exchange.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The power to make regulations or an order under this section shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.
Where securities are transferred — ... there shall be no charge to tax under section 93 above in respect of the transfer.
to a company which at the time of the transfer falls within subsection (6) of section 67 above . . . , and
from a company which at that time falls within that subsection . . . ,
There shall be no charge to tax under section 93 above in respect of a transfer... or appropriation of a UK bearer instrument, except in the case of—
an instrument within the exemption conferred by paragraph 16 of Schedule 15 to the Finance Act 1999 (renounceable letters of allotment etc. where rights are renounceable not later than six months after issue), or
an instrument within the exemption conferred by paragraph 17 of that Schedule (non-sterling instruments) which—
does not raise new capital, and
is not issued in exchange for an instrument raising new capital.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
has control of company Y, or
will have such control in consequence of the exchange or of an offer as a result of which the exchange is made.
For the purpose of subsection (2)(b)—
an instrument is regarded as raising new capital only if the condition in subsection (2B) is met, and
an instrument is regarded as issued in exchange for an instrument raising new capital only if the conditions in subsection (2C) are met.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The condition mentioned in subsection (2A)(a) is that the instrument—
is issued in conjunction with—
the issue of relevant securities for which only cash is subscribed, or
the granting of rights to subscribe for relevant securities which are granted for a cash consideration only and exercisable only by means of a cash subscription; or
is issued to give effect to the exercise of such rights as are mentioned in paragraph (a)(ii).
The conditions mentioned in subsection (2A)(b) are that—
the instrument is issued in conjunction with the issue of relevant securities by a company in exchange for relevant securities issued by another company, and
immediately before the exchange an instrument relating to those other securities— and accordingly was or would have been within the exception conferred by subsection (2).
was regarded for the purposes of subsection (2)(b) as raising new capital or as issued in exchange for an instrument raising new capital, or
would have been so regarded if the amendments made to this section by section 117 of the Finance Act 1999 had been in force at the time of its issue,
For the purposes of subsections (2B) and (2C) “relevant securities” means chargeable securities which are either— and which, in either case, do not carry any rights (of conversion or otherwise) by the exercise of which chargeable securities other than relevant securities may be obtained.
shares the holders of which have a right to a dividend at a fixed rate but have no other right to share in the profits of the company, or
loan capital within the meaning of section 78 above,
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Where an arrangement is entered into under which— the issue shall be treated for the purposes of this section as an issue of securities in exchange for securities issued by the other company.
a company issues securities to persons in respect of their holdings of securities issued by another company, and
the securities issued by the other company are cancelled,
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
... There shall be a charge to stamp duty reserve tax under this section where —
a person (A) whose business is or includes the provision of clearance services for the purchase and sale of chargeable securities has entered into an arrangement to provide such clearance services for another person, and
in pursuance of the arrangement, chargeable securities are transferred ... to A or to a person whose business is or includes holding chargeable securities as nominee for A.
Subject to subsections (4) and (5) below, tax under this section shall be charged at the rate of 1.5 per cent. of the following —
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
in a case where the securities are transferred for consideration in money or money's worth—
the amount or value of the consideration, or
where subsection (2A) applies, the amount or value of the consideration or, if higher, the value of the securities;
in any other case, the value of the securities.
The following provisions contain exceptions to the charge to stamp duty reserve tax under this section—
subsection (5) of this section (exception so far as stamp duty is chargeable);
section 97 (general exceptions);
section 97ZA (exception for replacement securities);
section 97A (election for alternative system of charge);
section 97AB (exempt capital-raising transfers);
section 97AC (exempt listing transfers);
section 97AD (exception for transfers of shares held by issuing company);
section 97B (transfers between depositary receipt system and clearance system).
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
the transfer is effected by an instrument on which stamp duty under the heading "Conveyance or Transfer of any kind not hereinbefore described" in Schedule 1 to the Stamp Act 1891 is chargeable,
at the time of the transfer the transferor is a qualified dealer in securities of the kind concerned or a nominee of such a qualified dealer,
the transfer is made for the purposes of the dealer's business,
at the time of the transfer the dealer is not a market maker in securities of the kind concerned, and
the instrument contains a statement that paragraphs (b) to (d) above are fulfilled,
In a case where — subsection (2)(c) above shall have effect as if the reference to the value there mentioned were to an amount (if any) equal to the total of the instalments payable, less those paid before the transfer to the other person is effected.
securities are issued, or securities sold are transferred, and (in either case) they are to be paid for in instalments,
the person to whom they are issued or transferred holds them and transfers them to another person when the last instalment is paid,
subsection (2)(c) above applies in the case of the transfer to the other person,
before the making of the transfer to the other person an instrument is received by A or a person whose business is or includes holding chargeable securities as nominee for A,
the instrument so received evidences all the rights which (by virtue of the terms under which the securities are issued or sold as mentioned in paragraph (a) above) subsist in respect of them at the time of the receipt, and
the transfer to the other person is effected by an instrument containing a statement that paragraphs (a), (b) and (e) above are fulfilled,
This subsection applies where the transfer of the securities is pursuant to—
the exercise of an option to buy or to sell the securities, and
either—
a term of the option which provides for the securities to be transferred to A or (as the case may be) to the person whose business is or includes holding chargeable securities as nominee for A, or
a direction, given by or on behalf of the person entitled or bound to acquire the securities pursuant to the exercise of the option, for the securities to be so transferred.
Where tax is (or would apart from this subsection be) charged under this section in respect of a transfer of securities and ad valorem stamp duty is chargeable on any instrument effecting the transfer, then —
if the amount of the duty is less than the amount of tax found by virtue of subsections (2) and (4) above, the tax charged under this section shall be the amount so found less the amount of the duty;
in any other case, there shall be no charge to tax under this section in respect of the transfer.
Where tax is charged under the preceding provisions of this section, the person liable for the tax shall (subject to subsection (7) below) be A.
Where tax is charged under the preceding provisions of this section in a case where securities are transferred to a person other than A, and at the time of the transfer A is not resident in the United Kingdom and has no branch or agency in the United Kingdom, the person liable for the tax shall be the person to whom the securities are transferred.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
if any of the instalments becomes payable by A or by a person whose business is or includes holding chargeable securities as nominee for A, there shall be a charge to stamp duty reserve tax under this section when the instalment becomes payable;
the charge shall be at the rate of £1.50 for every £100 or part of £100 of the instalment payable;
the person liable to pay the instalment shall be liable for the tax.
For the purposes of subsection (2)(b) above the value of any consideration not consisting of money shall be taken to be the price it might reasonably be expected to fetch on a sale in the open market at the time the securities are transferred.
For the purposes of subsection (2)(b)(ii) and (c) above the value of securities shall be taken to be the price they might reasonably be expected to fetch on a sale in the open market at the time they are transferred.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subject to subsection (14) below, this section applies where securities are transferred or issued after 18th March 1986 (whenever the arrangement was made).
This section does not apply, in the case of securities which are transferred, if the Board are satisfied —
that on or before 18th March 1986 the transferor (or, where the transferor transfers as agent, the principal) agreed to sell securities of the same kind and amount to the person (other than A) referred to in subsection (1)(a) above, and
that the transfer is effected in pursuance of that agreement.
There shall be no charge to tax under section 93 above in respect of the transfer ... or appropriation of chargeable securities (“the new securities”) issued by a company in place of existing securities of the same company (“the old securities”) if the following conditions are met.
The first condition is that the old securities are held under a depositary receipt scheme.
The second condition is that—
there was a charge to tax under section 93 above in respect of the transfer ... or appropriation— or there would have been such a charge if that section had been in force; or
of the old securities, or
of earlier securities in relation to which on a previous application of this section those securities were the new securities,
there would have been such a charge but for section 95(2) ... above.
The third condition is that there is an arrangement under which—
the new securities are transferred ... or appropriated as mentioned in section 93(1)(b), and
the old securities are cancelled.
For the purposes of subsection (2) above the cases in which securities are held under a depositary receipt scheme are those specified (in relation to shares) in section 95(5) above.
The exception provided by this section applies only to the extent that the value of the new securities immediately after their issue does not exceed the value of the old securities immediately before the issue of the new securities.
Where securities are transferred — ... there shall be no charge to tax under section 96 above in respect of the transfer
to a company which at the time of the transfer falls within subsection (6) of section 70 above . . . , and
from a company which at that time falls within that subsection . . . ,
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
section 127(1) of the Finance Act 1976 (transfer to stock exchange nominee), or
section 84(2) or (3) above.
There shall be no charge to tax under section 96 above in respect of a transfer ... of a UK bearer instrument, except in the case of—
an instrument within the exemption conferred by paragraph 16 of Schedule 15 to the Finance Act 1999 (renounceable letters of allotment etc. where rights are renounceable not later than six months after issue), or
an instrument within the exemption conferred by paragraph 17 of that Schedule (non-sterling instruments) which—
does not raise new capital, and
is not issued in exchange for an instrument raising new capital.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
has control of company Y, or
will have such control in consequence of the exchange or of an offer as a result of which the exchange is made.
For the purpose of subsection (3)(b)—
an instrument is regarded as raising new capital only if the condition in subsection (3B) is met, and
an instrument is regarded as issued in exchange for an instrument raising new capital only if the conditions in subsection (3C) are met.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The condition mentioned in subsection (3A)(a) is that the instrument—
is issued in conjunction with—
the issue of relevant securities for which only cash is subscribed, or
the granting of rights to subscribe for relevant securities which are granted for a cash consideration only and exercisable only by means of a cash subscription; or
is issued to give effect to the exercise of such rights as are mentioned in paragraph (a)(ii).
The conditions mentioned in subsection (3A)(b) are that—
the instrument is issued in conjunction with the issue of relevant securities by a company in exchange for relevant securities issued by another company, and
immediately before the exchange an instrument relating to those other securities— and accordingly was or would have been within the exception conferred by subsection (3).
was regarded for the purposes of subsection (3)(b) as raising new capital or as issued in exchange for an instrument raising new capital, or
would have been so regarded if the amendments made to this section by section 117 of the Finance Act 1999 had been in force at the time of its issue,
For the purposes of subsections (3B) and (3C) “relevant securities” means chargeable securities which are either— and which, in either case, do not carry any rights (of conversion or otherwise) by the exercise of which chargeable securities other than relevant securities may be obtained.
shares the holders of which have a right to a dividend at a fixed rate but have no other right to share in the profits of the company, or
loan capital within the meaning of section 78 above,
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Where an arrangement is entered into under which— the issue shall be treated for the purposes of this section as an issue of securities in exchange for securities issued by the other company.
a company issues securities to persons in respect of their holdings of securities issued by another company, and
the securities issued by the other company are cancelled,
The Treasury may make regulations —
providing that provisions of the Taxes Management Act 1970 specified in the regulations shall apply in relation to stamp duty reserve tax as they apply in relation to a tax within the meaning of that Act, with such modifications (specified in the regulations) as they think fit;
making with regard to stamp duty reserve tax such further provision as they think fit in relation to administration, assessment, collection and recovery.
The power to make regulations under subsection (1) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.
The power conferred on the Treasury by subsection (1) above includes power to make provision conferring or imposing on the Board functions which involve the exercise of a discretion.
This section applies for the purposes of this Part of this Act.
“The Board” means the Commissioners of Inland Revenue.
Subject to the following provisions of this section, “chargeable securities” means —
stocks, shares or loan capital,
interests in, or in dividends or other rights arising out of, stocks, shares or loan capital,
rights to allotments of or to subscribe for, or options to acquire, stocks, shares or loan capital, and
units under a unit trust scheme.
“Chargeable securities” does not include securities falling within paragraph (a), (b) or (c) of subsection (3) above which are issued or raised by a body corporate not incorporated in the United Kingdom unless —
they are registered in a register kept in the United Kingdom by or on behalf of the body corporate by which they are issued or raised, or
in the case of shares, they are paired with shares issued by a body corporate incorporated in the United Kingdom, or
in the case of securities falling within paragraph (b) or (c) of subsection (3) above, paragraph (a) or (b) above applies to the stocks, shares or loan capital to which they relate , or
they are issued or raised by a UK Societas (whether or not in the course of its formation in accordance with Article 2 of Council Regulation (EC) 2157/2001 on the Statute for a European Company (Societas Europaea)) ....
“Chargeable securities” does not include securities falling within paragraph (a), (b) or (c) of subsection (3) above if—
in the case of stock or marketable securities within the meaning of section 125 of the Finance Act 2003 (abolition of stamp duty except on instruments relating to stock or marketable securities), they are securities the transfer of which is exempt from all stamp duties;
in any other case, they are securities the transfer of which, disregarding that section, would be exempt from all stamp duties.
“Chargeable securities” does not include interests in depositary receipts for stocks or shares.
an interest in, or in dividends or other rights arising out of, stocks, shares or loan capital the transfer of which is not exempt from all stamp duties;
a right to an allotment of or to subscribe for, or an option to acquire, stocks, shares or loan capital the transfer of which is not exempt from all stamp duties,
A depositary receipt for stocks or shares is an instrument acknowledging — except that a depositary receipt for stocks or shares does not include an instrument acknowledging rights in or in relation to stocks or shares if they are issued or sold under terms providing for payment in instalments and for the issue of the instrument as evidence that an instalment has been paid.
that a person holds stocks or shares or evidence of the right to receive them, and
that another person is entitled to rights, whether expressed as units or otherwise, in or in relation to stocks or shares of the same kind, including the right to receive such stocks or shares (or evidence of the right to receive them) from the person mentioned in paragraph (a) above,
The Treasury may by regulations provide that for subsection (7) above (as it has effect for the time being) there shall be substituted a subsection containing a different definition of a depositary receipt; and the power to make regulations under this subsection shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.
“Unit” (except in subsection (6A) above) and “unit trust scheme” have the same meanings as in Part VII of the Finance Act 1946 .
In interpreting “chargeable securities” in sections 93, 94 95, , 96 , 97 and 97A, 97ZA above —
paragraph (a) of subsection (4) above and the reference to that paragraph in paragraph (c) of that subsection shall be ignored, and
the effect of section 133(3) of the Companies Act 2006 (transactions in shares registered in overseas branch register) shall be ignored for the purposes of subsection (5) above.
This section applies for the purposes of section 99(4B).
Section 1005(3) to (5) of the Income Tax Act 2007 (meaning of “listed” etc) applies as it applies in relation to the Income Tax Acts.
“Recognised growth market” means a market recognised as a growth market by the Commissioners for Her Majesty's Revenue and Customs.
On an application made by a market, the market is to be recognised by the Commissioners as a growth market if, and only if, the Commissioners are satisfied, on the basis of evidence provided by the market, that the market qualifies for recognition.
A market qualifies for recognition at any time (“the relevant time”) if it is a recognised stock exchange or a qualifying UK multilateral trading facility which meets one or both of the following conditions—
a majority of the companies whose stock or marketable securities are admitted to trading on the market are companies with market capitalisations of less than £450 million;
the Commissioners are satisfied that the admission requirements of the market include provision requiring companies to demonstrate compounded annual growth in gross revenue or employment of at least 20% over the last three periods of account preceding admission (“the pre-admission periods”).
In subsection (5)— “period of account” of a company means a period for which the company draws up accounts; “recognised stock exchange” has the meaning given by section 1005(1) of the Income Tax Act 2007; “UK multilateral trading facility” has the meaning given by Article 2.1.14A of Regulation (EU) No. 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments as it forms part of assimilated law.
For the purposes of subsection (5) a UK multilateral trading facility is “qualifying” if—
it is operated by an investment firm within the meaning given by article 3(1) of The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544), and
the investment firm has permission under Part 4A of the Financial Services and Markets Act 2000 to carry on the regulated activity (within the meaning of that Act) of operating a multilateral trading facility.
For the purposes of subsection (5)(a) a company's market capitalisation at the relevant time is the average of the closing market capitalisations of the company on the last trading day of each calendar month (or part of a calendar month) in the qualifying period.
“The qualifying period” means whichever is the shorter of—
the last three calendar years preceding the relevant time, or
the period beginning with the day on which the company is admitted to trading on the market and ending at the end of the last calendar year preceding the relevant time.
For the purposes of subsection (5)(a), a company is to be disregarded if it is admitted to trading on the market in the calendar year in which the relevant time falls.
In the case of a company with a market capitalisation in a currency other than sterling, the closing market capitalisation for the last trading day of any calendar month is to be taken, for the purposes of subsection (7), to be the sterling equivalent of that capitalisation (calculated by reference to the spot rate of exchange for that last trading day).
For the purposes of subsection (5)(b), the percentage of the compounded annual growth in gross revenue over the pre-admission periods is calculated by applying the formula— where— “EV” is the company's gross revenue for the last of the pre-admission periods, “BV” is the company's gross revenue for the period of account immediately preceding the pre-admission periods.
For those purposes, the percentage of the compounded annual growth in employment over the pre-admission periods is calculated by applying the formula— where— “EV” is the number of employees of the company at the end of the last of the pre-admission periods, “BV” is the number of employees of the company at the end of the period of account immediately preceding the pre-admission periods.
The Treasury may by regulations—
make provision for the revocation by the Commissioners of a recognition under this section and about the consequences of a revocation;
amend this section so as to add, remove or alter a condition which must be met in relation to a market for it to be recognised by the Commissioners under this section.
Regulations under this section may contain incidental, supplemental, consequential and transitional provision and savings.
The power to make regulations under this section is exercisable by statutory instrument, and any statutory instrument containing such regulations is subject to annulment in pursuance of a resolution of the House of Commons.
This section is to be construed as one with the Stamp Act 1891.
There shall be no charge to tax under section 96 above in respect of the transfer ... of chargeable securities (“the new securities”) issued by a company in place of existing securities of the same company (“the old securities”) if the following conditions are met.
The first condition is that the old securities are held under a clearance services scheme.
The second condition is that—
there was a charge to tax under section 96 above in respect of the transfer ...— or there would have been such a charge if that section had been in force; or
of the old securities, or
of earlier securities in relation to which on a previous application of this section those securities were the new securities,
there would have been such a charge but for section 97(3) ... above.
The third condition is that there is an arrangement under which—
the new securities are transferred ... as mentioned in section 96(1)(b), and
the old securities are cancelled.
For the purposes of subsection (2) above the cases in which securities are held under a clearance services scheme are those specified (in relation to shares) in section 97(6) above.
The exception provided by this section applies only to the extent that the value of the new securities immediately after their issue does not exceed the value of the old securities immediately before the issue of the new securities.
A person whose business is or includes the provision of clearance services for the purchase and sale of chargeable securities or relevant securities (an “operator”) may, with the approval of the Board, elect that stamp duty and stamp duty reserve tax shall be chargeable in accordance with this section in connection with those clearance services.
An election under subsection (1) above—
shall come into force on such date as may be notified to the operator by the Board in giving their approval; and
shall continue in force unless and until it is terminated in accordance with the following provisions of this section.
If and so long as an election under subsection (1) above is in force, stamp duty or stamp duty reserve tax (as the case may require) shall, in connection with the clearance services to which the election relates, be chargeable in relation to— as it would be chargeable apart from sections 70, 90(4) and (5) and 96 above.
a transfer ... falling within section 70(1) or 96(1) above,
an agreement falling within section 90(4) above by virtue of section 96(1) above, or
an agreement falling within section 90(5) above,
Where stamp duty or stamp duty reserve tax is chargeable by virtue of subsection (3) above in relation to a transfer ... or agreement, sections 70, 90(4) and (5) and 96 above shall not have effect in relation to that transfer ... or agreement.
Nothing in subsection (3) or (4) above affects the application of section 70 or 96 above in relation to a transfer falling within section 70(1) or 96(1) above by the operator or his nominee to, or to a nominee of, another operator in relation to whom no election under subsection (1) above is for the time being in force.
The Board may require the operator, as a condition of the approval of his election under subsection (1) above, to make and maintain such arrangements as they may consider satisfactory—
for the collection of stamp duty reserve tax chargeable in accordance with this section, and
for complying, or securing compliance, with the provisions of this Part and of regulations under section 98 below, so far as relating to such tax.
Where the operator is not resident in the United Kingdom and has no branch or agency in the United Kingdom, the Board may require him, as a condition of the approval of his election under subsection (1) above, to appoint and, so long as the election remains in force, maintain a tax representative.
A person shall not be an operator’s tax representative under this section unless that person—
has a business establishment in the United Kingdom, and
is approved by the Board.
A person who is at any time an operator’s tax representative under this section— as if the obligations and liabilities imposed on the operator were imposed jointly and severally on the tax representative and the operator.
shall be entitled to act on the operator’s behalf for the purposes of stamp duty and stamp duty reserve tax in connection with the clearance services to which the operator’s election under subsection (1) above relates,
shall secure (where appropriate by acting on the operator’s behalf) the operator’s compliance with and discharge of the obligations and liabilities to which the operator is subject, in connection with the clearance services to which the operator’s election under subsection (1) above relates, by virtue of legislation relating to stamp duty or stamp duty reserve tax (including obligations and liabilities arising before he became the operator’s tax representative), and
shall be personally liable in respect of any failure to secure the operator’s compliance with or discharge of any such obligation or liability, and in respect of anything done for purposes connected with acting on the operator’s behalf,
An election under subsection (1) above may be terminated—
by not less than thirty days’ notice given by the operator to the Board or by the Board to the operator; or
if there is or has been a breach of a condition of the approval of the election imposed by virtue of subsection (6) or (7) above, by a notice—
given by the Board to the operator,
taking effect on the giving of the notice or at such later time as may be specified in the notice, and
stating that it is given by reason of the breach of condition.
Where an election under subsection (1) above is terminated, section 96 above shall have effect as if chargeable securities of the same amounts and kinds as are, immediately before the termination, held by the operator or his nominee in connection with the provision of the clearance services, had, immediately after the termination, been transferred to the operator or, as the case may be, to the nominee by a transfer falling within subsection (1) of that section.
In this section “relevant securities” has the same meaning as in section 70 above.
Nothing in section 70(9) or 97(1) above has effect to prevent a charge to stamp duty or stamp duty reserve tax arising—
on a transfer to which subsection (5) above applies, or
on a deemed transfer under subsection (11) above.
There is to be no charge to tax under section 93 or 96 in respect of an exempt capital-raising transfer.
For the purposes of subsection (1), a transfer of chargeable securities is an “exempt capital-raising transfer” if the transfer is in the course of capital-raising arrangements.
In this section, “capital-raising arrangements” means arrangements pursuant to which chargeable securities are issued by a company for the purpose of raising new capital.
A transfer of chargeable securities is not prevented from being an exempt capital-raising transfer by reason only of a delay in transferring the chargeable securities where—
a person (“the transferor”) acquires the chargeable securities—
before capital-raising arrangements are entered into, or
in the course of capital-raising arrangements,
the transferor is subject to a restriction that has the effect of preventing the transfer of the chargeable securities in the course of the capital-raising arrangements, and
the transfer is made as soon as reasonably practicable after the time at which the restriction ceases to have effect.
There is to be no charge to tax under section 93 or 96 in respect of an exempt listing transfer.
For the purposes of subsection (1), a transfer of chargeable securities issued by a company is an “exempt listing transfer” if—
it is a transfer in the course of qualifying listing arrangements, and
those arrangements do not affect the beneficial ownership of the chargeable securities.
In this section, “listing arrangements” means arrangements pursuant to which chargeable securities, or depositary receipts for chargeable securities, are listed on a recognised stock exchange.
For the purposes of this section, listing arrangements are “qualifying” if, immediately before the first transfer of chargeable securities in the course of the listing arrangements, no chargeable securities in the company or depositary receipts for chargeable securities in the company are listed on the recognised stock exchange to which the listing arrangements relate.
A transfer of chargeable securities is not prevented from being an exempt listing transfer by reason only of a delay in transferring the chargeable securities where—
a person (“the transferor”) acquires the chargeable securities before qualifying listing arrangements are entered into,
the transferor is subject to a restriction that has the effect of preventing the transfer of the chargeable securities in the course of the qualifying listing arrangements, and
the transfer is made as soon as reasonably practicable after the time at which the restriction ceases to have effect.
Section 1005 of the Income Tax Act 2007 (meaning of “recognised stock exchange”, “listed” etc) applies in relation to this section as it applies in relation to the Income Tax Acts.
There is to be no charge to tax under section 93 or 96 in respect of a transfer of shares in a company which are held by the company (whether in accordance with section 724 of the Companies Act 2006 (treasury shares) or otherwise).
There shall be no charge to tax under section 93 or 96 above where securities are transferred between a depositary receipt system and a clearance system.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A transfer between a depositary receipt system and a clearance system means a transfer—
from (or to) a company which at the time of the transfer falls within section 67(6) above, and
to (or from) a company which at that time falls within section 70(6) above.
This section does not apply to a transfer from a clearance system (that is, from such a company as is mentioned in subsection (2)(b) above) if at the time of the transfer an election is in force under section 97A above in relation to the clearance services for the purposes of which the securities are held immediately before the transfer.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
On and after the passing of this Act, the tax charged under the Capital Transfer Tax Act 1984 (in this Part of this Act referred to as “the 1984 Act”) shall be known as inheritance tax and, accordingly, on and after that passing,—
the 1984 Act may be cited as the Inheritance Tax Act 1984 ; and
subject to subsection (2) below, any reference to capital transfer tax in the 1984 Act, in any other enactment passed before or in the same Session as this Act or in any document executed, made, served or issued on or before the passing of this Act or at any time thereafter shall have effect as a reference to inheritance tax.
Subsection (1)(b) above does not apply where the reference to capital transfer tax relates to a liability arising before the passing of this Act.
In the following provisions of this Part of this Act, any reference to tax except where it is a reference to a named tax is a reference to inheritance tax and, in so far as it occurs in a provision which relates to a time before the passing of this Act, includes a reference to capital transfer tax.
The 1984 Act shall have effect subject to the amendments in Part I of Schedule 19 to this Act, being amendments— and amendments making provisions consequential on or incidental to the matters referred to above and to sections 102 and 103 below.
removing liability for tax on certain transfers of value where the transfer occurs at least seven years before the transferor’s death;
providing for one Table of rates of tax;
abolishing exemptions for mutual transfers;
making provision with respect to the amounts of tax to be charged on transfers occurring before the death of the transferor;
making provision with respect to the application of relief under Chapter I (business property) and Chapter II (agricultural property) of Part V of the 1984 Act to such transfers; and
reducing the period during which the values transferred by chargeable transfers are aggregates from ten years to seven;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
in subsection (5) after the word "is", in the second place where it occurs, there shall be inserted "(or proves to be)" and at the end there shall be added "and, in the case of a disposal which, being a potentially exempt transfer, proves to be a chargeable transfer, all necessary adjustments shall be made, whether by the discharge or repayment of capital gains tax or otherwise"; and
in subsection (6)(a) for the words "three years" there shall be substituted "seven years".
Part I of Schedule 19 to this Act has effect, subject to Part II of that Schedule, with respect to transfers of value made, and other events occcurring, on or after 18th March 1986.
The transitional provisions in Part II of Schedule 19 to this Act shall have effect.
Subject to subsections (5), (6) and (7A) below, this section applies where, on or after 28th March 1986, an individual disposes of any property by way of gift and either— and in this section “the relevant period” means a period ending on the date of the donor’s death and beginning seven years before that date or, if it is later, on the date of the gift.
possession and enjoyment of the property is not bona fide assumed by the donee at or before the beginning of the relevant period; or
at any time in the relevant period the property is not enjoyed to the entire exclusion, or virtually to the entire exclusion, of the donor and of any benefit to him by contract or otherwise;
If and so long as— the property is referred to (in relation to the gift and the donor) as property subject to a reservation.
possession and enjoyment of any property is not bona fide assumed as mentioned in subsection (1)(a) above, or
any property is not enjoyed as mentioned in subsection (1)(b) above,
If, immediately before the death of the donor, there is any property which, in relation to him, is property subject to a reservation then, to the extent that the property would not, apart from this section, form part of the donor’s estate immediately before his death, that property shall be treated for the purposes of the 1984 Act as property to which he was beneficially entitled immediately before his death.
If, at a time before the end of the relevant period, any property ceases to be property subject to a reservation, the donor shall be treated for the purposes of the 1984 Act as having at that time made a disposition of the property by a disposition which is a potentially exempt transfer.
This section does not apply if or, as the case may be, to the extent that the disposal of the property by way of gift is an exempt transfer by virtue of any of the following provisions of Part II of the 1984 Act,—
section 18 (transfers between spouses or civil partners) , except as provided by subsections (5A) and (5B) below;
section 20 (small gifts);
section 22 (gifts in consideration of marriage or civil partnership);
section 23 (gifts to charities);
section 24 (gifts to political parties);
section 25 (gifts for national purposes, etc);
section 24A (gifts to housing associations);
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
section 27 (maintenance funds for historic buildings); ...
section 28 (employee trusts); and
section 28A (employee-ownership trusts).
This section does not apply if the disposal of property by way of gift is made under the terms of a policy issued in respect of an insurance made before 18th March 1986 unless the policy is varied on or after that date so as to increase the benefits secured or to extend the term of the insurance; and, for this purpose, any change in the terms of the policy which is made in pursuance of an option or other power conferred by the policy shall be deemed to be a variation of the policy.
Subsection (5)(a) above does not prevent this section from applying if or, as the case may be, to the extent that—
the property becomes settled property by virtue of the gift,
by reason of the donor’s spouse or civil partner (“the relevant beneficiary”) becoming beneficially entitled to an interest in possession in the settled property, the disposal is or, as the case may be, is to any extent an exempt transfer by virtue of section 18 of the 1984 Act in consequence of the operation of section 49 of that Act (treatment of interests in possession),
at some time after the disposal, but before the death of the donor, the relevant beneficiary’s interest in possession comes to an end, and
on the occasion on which that interest comes to an end, the relevant beneficiary does not become beneficially entitled to the settled property or to another interest in possession in the settled property.
If a policy issued as mentioned in subsection (6) above confers an option or other power under which benefits and premiums may be increased to take account of increases in the retail price index (as defined in section 8(3) of the 1984 Act) or any similar index pecified in the policy, then, to the extent that the right to exercise on or before 1st August 1986, the exercise of that option or power before that date shall be disregarded for the purposes of subsection (6) above.
If or, as the case may be, to the extent that this section applies by virtue of subsection (5A) above, it has effect as if the disposal by way of gift had been made immediately after the relevant beneficiary’s interest in possession came to an end.
Schedule 20 to this Act has effect for supplementing this section.
For the purposes of subsections (5A) and (5B) above—
section 51(1)(b) of the 1984 Act (disposal of interest in possession treated as coming to end of interest) applies as it applies for the purposes of Chapter 2 of Part 3 of that Act; and
references to any property or to an interest in any property include references to part of any property or interest.
This section does not apply if—
the disposal of property by way of gift took place before 30 October 2024,
the property became settled property by virtue of the disposal and remained settled property at all times after the disposal and before the relevant time,
immediately before 30 October 2024, the property was excluded property for the purposes of the 1984 Act by virtue of section 48(3) or (3A) (as it had effect at that time), and
immediately before the relevant time, the property—
was situated outside the United Kingdom and was not property to which paragraph 2 or 3 of Schedule A1 to the 1984 Act applied (overseas property with value attributable to UK residential property or UK agricultural property), or
was a holding in an authorised unit trust or a share in an open-ended investment company (within the meaning, in either case, of the 1984 Act).
In subsection (7A), “the relevant time” means—
if the property ceases to meet the condition in subsection (2) at any time before the donor’s death, that time;
otherwise, the time of the donor’s death.
In subsection (7A)(c), “for the purposes of the 1984 Act” includes for the purposes only of Chapter 3 of Part 3 of that Act (ten-year anniversary charges etc) because of the operation of section 81 of that Act (property moving between settlements).
Subject to subsection (2) below, if, in determining the value of a person’s estate immediately before his death, account would be taken, apart from this subsection, of a liability consisting of a debt incurred by him or an incumbrance created by a disposition made by him, that liability shall be subject to abatement to an extent proportionate to the value of any of the consideration given for the debt or incumbrance which consisted of—
property derived from the deceased; or
consideration (not being property derived from the deceased)given by any person who was at the time entitled to, or amongst whose resources there were at any time included, any property derived from the deceased.
If, in the case where the whole or part of the consideration given for a debt or incumbrance consisted of such consideration as is mentioned in subsection (1)(b) above, it is shown that the value of the consideration given, or of that part thereof, as the case may be, exceeded that which could have been rendered available by application of all the property derived from the deceased, other than such (if any) of that property—
as is included in the consideration given, or
as to which it is shown that the disposition of which it, or the property which it represented, was the subject matter was not made with reference to, or with a view to enabling or facilitating, the giving of the consideration or the recoupment in any manner of the cost thereof, no abatement shall be made under subsection (1) above in respect of the excess.
In subsections (1) and (2) above “property derived from” means, subject to subsection (4) below, any property which was the subject matter of a dispostition made by the deceased, either by himself alone or in concert or by arrangement with any other person or which represented any of the subject matter of such a dispostition, whether directly or indirectly, and whether by virtue of on or more intermediate dispostitions.
If the dispostition first-mentioned in subsection (3) above was not a transfer of value and it is shown that the disposition was not part of associated operations which included— that first-mentioned dispostition shall be left out of account for the purposes of subsections (1) to (3) above.
a disposition by the deceased, either alone or in concert or by arrangement with any other person, otherwise than for full consideration in money or money’s worth paid to the deceased for his own use or benefit; or
a dispostition by any other person operating to reduce the value of the property of the deceased,
If, before a person’s death but on or after 18th March 1986, money or money’s worth is paid or applied by him— the 1984 Act shall have effect as if, at the time of the payment or application, the person concerned had made a transfer of value equal to the money or money’s worth and that transfer were a potentially exempt transfer.
in or towards the satisfaction or discharge of a debt or incumbrance in the case of which subsection (1) above would have effect on his death if the debt or incumbrance had not been satisfied or discharged, or
in reduction of debt or incumbrance in the case of which that subsection has effect on his death,
Any reference in this section to a debt is a reference to a debt incurred on or after 18th March 1986 and any reference to an incumbrance created by a disposition is a reference to an incumbrance created by an disposition made on or after that date; and in this section “subject matter” includes, in relation to any disposition, any annual or periodical payment made or payable under or by virtue of the disposition
In determining the value of a person’s estate immediately before his death, no account shall be taken (by virtue of section 5 of the 1984 Act) of any liability arising under or in connection with a policy of life insurance issued in respect of an insurance made on or after 1st July 1986 unless the whole of the sums assured under that policy form part of that person’s estate immediately before his death.
Subsection (2) below applies where—
an individual is beneficially entitled to an interest in possession in settled property,
either—
the individual became beneficially entitled to the interest in possession before 22nd March 2006, or
the individual became beneficially entitled to the interest in possession on or after 22nd March 2006 and the interest is an immediate post-death interest, a disabled person's interest or a transitional serial interest or falls within section 5(1B) of the 1984 Act, and
the interest in possession comes to an end during the individual's life.
For the purposes of— the individual shall be taken (if, or so far as, he would not otherwise be) to dispose, on the coming to an end of the interest in possession, of the no-longer-possessed property by way of gift.
section 102 above, and
Schedule 20 to this Act,
In subsection (2) above “the no-longer-possessed property” means the property in which the interest in possession subsisted immediately before it came to an end, other than any of it to which the individual becomes absolutely and beneficially entitled in possession on the coming to an end of the interest in possession.
For the purposes of the 1984 Act the Board may by regulations make such provision as is mentioned in subsection (2) below with respect to transfers of value made, and other events occurring, on or after 18th March 1986 where—
a potentially exempt transfer proves to be a chargeable transfer and, immediately before the death of the transferor, his estate includes property acquired by him from the transferee otherwise than for full consideration in money or money’s worth;
an individual disposes of property by a transfer of value which is or proves to be a chargeable transfer and the circumstances are such that subsection (3) or subsection (4) of section 102 above applies to the property as being or having been property subject to a reservation;
in determining the value of a person’s estate immediately before his death, a liability of his to any person is abated as mentioned in section 103 above and, before his death, the deceased made a transfer of value by virtue of which the estate of that other person was increased or by virtue of which property becomes comprised in a settlement of which that other person is a trustee; or
the circumstances are such as may be specified in the regulations for the purposes of this subsection, being circumstances appearing to the Board to be similar to those referred to in paragraphs (a) to (c) above.
The provision which may be made by regulations under this section is provision for either or both of the following,—
treating the value transferred by a transfer of value as reduced by reference to the value transferred by another transfer of value ; and
treating the whole or any part of the tax paid or payable on the value transferred by a transfer of value as a credit against the tax payable on the value transferred by another transfer of value.
The power to make regulations under this section shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the Commons House of Parliament.
This section applies where an individual disposes of an interest in land by way of gift on or after 9th March 1999.
At any time in the relevant period when the donor or his spouse or civil partner enjoys a significant right or interest, or is party to a significant arrangement, in relation to the land—
the interest disposed of is referred to (in relation to the gift and the donor) as property subject to a reservation; and
section 102(3) and (4) above shall apply.
Subject to subsections (4) and (5) below, a right, interest or arrangement in relation to land is significant for the purposes of subsection (2) above if (and only if) it entitles or enables the donor to occupy all or part of the land, or to enjoy some right in relation to all or part of the land, otherwise than for full consideration in money or money’s worth.
A right, interest or arrangement is not significant for the purposes of subsection (2) above if—
it does not and cannot prevent the enjoyment of the land to the entire exclusion, or virtually to the entire exclusion, of the donor; or
it does not entitle or enable the donor to occupy all or part of the land immediately after the disposal, but would do so were it not for the interest disposed of.
A right or interest is not significant for the purposes of subsection (2) above if it was granted or acquired before the period of seven years ending with the date of the gift.
Where an individual disposes of more than one interest in land by way of gift, whether or not at the same time or to the same donee, this section shall apply separately in relation to each interest.
With respect to transfers of value made on or after 18th March 1986, after section 39 of the 1984 Act there shall be inserted the following section—
This section applies where an individual disposes, by way of gift on or after 9th March 1999, of an undivided share of an interest in land.
At any time in the relevant period, except when subsection (3) or (4) below applies—
the share disposed of is referred to (in relation to the gift and the donor) as property subject to a reservation; and
section 102(3) and (4) above shall apply.
This subsection applies when the donor—
does not occupy the land; or
occupies the land to the exclusion of the donee for full consideration in money or money’s worth.
This subsection applies when—
the donor and the donee occupy the land; and
the donor does not receive any benefit, other than a negligible one, which is provided by or at the expense of the donee for some reason connected with the gift.
In section 105 of the 1984 Act (relevant business property) the following shall be substituted for subsection (4)(a)—.
At the end of that section there shall be inserted—
Subsections (1) and (2) above apply in relation to transfers of value made, and otehr events occurring, on or after the day of the Stock Exchange reforms.
The Board may by regulations provided that section 105(7) of the 1984 Act (as inserted by subsection (2) above) shall have effect—
as if the reference to The Stock Exchange in paragraph (a) were to any recognised investment exchange (within the meaning given by section 285(1)(a) of the Financial Services and Markets Act 2000) or to any of those exchanges specified in the regulations, and
as if the reference to the Council of Stock Exchange in paragraph (b) were to the investment exchange concerned.
The Board may by regulations amend section 105 of the 1984 Act so as to secure that section 105(3) does not apply to any property if the business concerned is of such description as is set out in the regulations; and the regulations may include such incidental and consequential provisions as the Board think fit.
Regulations under subsection (4) or (5) above shall apply in relation to transfers of value made, and other events occurring, on or after such day, after the Stock Exchange reforms, as is specified in the regulations.
The power to make regulations under subsection (4) and (5) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the Commons House of Parliament.
In this section “the day of the Stock Exchange reforms” means trhe day on which the rule of The Stock Exhcange that prohibits a person from carrying on business as both a broker and a jobber is abolished .
In sections 102A and 102B above “the relevant period” has the same meaning as in section 102 above.
An interest or share disposed of is not property subject to a reservation under section 102A(2) or 102B(2) above if or, as the case may be, to the extent that the disposal is an exempt transfer by virtue of any of the provisions listed in section 102(5) above.
In applying sections 102A and 102B above no account shall be taken of— in circumstances where the occupation, or occupation pursuant to the arrangement, would be disregarded in accordance with paragraph 6(1)(b) of Schedule 20 to this Act.
occupation of land by a donor, or
an arrangement which enables land to be occupied by a donor,
The provisions of Schedule 20 to this Act, apart from paragraph 6, shall have effect for the purposes of sections 102A and 102B above as they have effect for the purposes of section 102 above; and any question which falls to be answered under section 102A or 102B above in relation to an interest in land shall be determined by reference to the interest which is at that time treated as property comprised in the gift.
Where property other than an interest in land is treated by virtue of paragraph 2 of that Schedule as property comprised in a gift, the provisions of section 102 above shall apply to determine whether or not that property is property subject to a reservation.
Sections 102 and 102A above shall not apply to a case to which section 102B above applies.
Section 102A above shall not apply to a case to which section 102 above applies.
In section 234 of the 1984 Act (interest in instalments) the following shall be substituted for subsection (3)(c)—
At the end of that section there shall be inserted—
Subsections (1) and (2) above apply in relation to chargeable transfers made, and other events occurring, on or after the day of The Stock Exchange reforms.
The Board may by regulations provide that section 234(4) of the 1984 Act (as inserted by subsection (2) above) shall have effect—
as if the reference to The Stock Exchange in paragraph (a) were to any recognised investment exchange (within the meaning given by section 285(1)(a) of the Financial Services and Markets Act 2000) or to any of those exchanges specified in the regulations, and
as if the reference to the Council of The Stock Exchange in paragraph (b) were to the investment exchange concerned.
The Board may by regulations amend section 234 of the 1984 Act so as to secure that companies of a description set out in the regulations fall within section 234(3)(c); and the regulations may include such incidental and consequential provisions as the Board think fit.
Regulations under subsection (4) or (5) above shall apply in relation to chargeable transfers made, and by other events occurring, on or after such day, after the day of The Stock Exchange reforms, as is specified in the regulations.
The power to make regulations under subsection (4) or (5) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the Commons House of Parliament.
In this section “the day of The Stock Exchange reforms” has the same meaning as in section 106 above.
For the purposes of the enactments relating to oil taxation, land lying between the landward boundary of the territorial sea and the shoreline of the United Kingdom (as defined below) shall be treated as part of the bed of the territorial sea of the United Kingdom and any reference in those enactments to the territorial sea or the subsoil beneath it shall be construed accordingly.
Any reference to the United Kingdom in the enactments relating to oil taxation, where that reference is a reference to a geographical area, shall be treated as a reference to the United Kingdom exclusive of the land referred to in subsection (1) above and of any waters for the time being covering that land.
In this section—
“the landward boundary of the territorial sea” means the line for the time being ordered by Her Majesty in Council to be the baseline from which the breadth of the territorial sea is measured; and
“the shoreline of the United Kingdom” means, subject to subsection (4) below, the high-water line along the coast, including the coast of all islands comprised in the United Kingdom.
In the case of waters adjacent to a bay, as defined in the Territorial Waters Order in Council 1964, the shoreline means—
if the bay has only one mouth and the distance between the high-water lines of the natural entrance points of the bay does not exceed 5,000 metres, a straight line joining those high-water lines;
if, because of the presence of islands, the bay has more than one mouth and the distances between the high-water lines of the natural entrance points of each mouth added together do not exceed 5,000 metres, a series of straight lines across each of the mouths drawn so as to join those high-water lines; and
if neither paragraph (a) nor paragraph (b) above applies, a straight line 5,000 metres in length drawn from high-water line to high-water line within the bay in such a manner as to enclose the maximum area of water that is possible with a line of that length.
If, by virtue of this section, it becomes necessary at any time to establish the high-water line at any place, it shall be taken to be the line which, on the current Admiralty chart showing that place, is depicted as “the coastline”, and for this purpose,—
an Admiralty chart means a chart published under the superintendence of the Hydrographer of the Navy;
if there are two or more Admiralty charts of different scales showing the place in question and depicting the coastline, account shall be taken only of the largest scale chart; and
subject to paragraph (b) above, the current Admiralty chart at any time is that most recently published before that time.
In this section “the enactments relating to oil taxation” means Part I of the Oil Taxation Act 1975 and any enactment which is to be construed as one with that Part.
This section shall be deemed to have come into force on 1st April 1986.
Where an election is made under this section before 1st January 1994 and accepted by the Board, the market value for the purposes of the Oil Taxation Acts of any light gases to which the election applies shall be determined, not in accordance with paragraphs 2, 2A and 3 of Schedule 3 to the principal Act (value under a notional contract), but by reference to a price formula specified in the election; and, in relation to any such light gases, any reference to market value in any other provision of the Oil Taxation Acts shall be construed accordingly.
No election may be made under this section in respect of light gases which are “ethane” as defined in subsection (6)(a) of section 134 of the Finance Act 1982 (alternative valuation of ethane used for petrochemical purposes) if the principal purpose for which the gases are being or are to be used is that specified in subsection (2)(b) of the said section 134 (use for petrochemical purposes).
Subject to subsection (4) below, an election under this section applies only to light gases—
which, during the period covered by the election, are either disposed of otherwise than in sales at arm’s length or relevantly appropriated; and
which are not subject to fractionation between the time at which they are so disposed of or appropriated and the time at which they are applied or used for the purposes specified in the election.
In any case where,— the market value of those light gases at the time referred to in paragraph (a) above shall be determined as if they were gases to which the election applies.
at a time during the period covered by an election, a market value falls to be determined for light gases to which subsection (4)(b) or (5)(d) of section 2 of the principal Act applies (oil stocks at the end of chargeable periods), and
after the expiry of the chargeable period in question, the light gases are disposed of or appropriated as mentioned in subsection (3) above,
Schedule 18 to the Finance Act 1982 (which applies to elections under section 134 of that Act relating to ethane used or to be used for petrochemical purposes) shall have effect for supplementing this section but subject to the modifications in Schedule 21 to this Act (in which “the 1982 Schedule” means the said Schedule 18).
This section shall be construed as one with Part I of the principal Act and in this section—
“light gases” means oil consisting of gas of which the largest component by volume over any chargeable period is methane or ethane or a combination of those gases and which—
results from the fractionation of gas before it is disposed of or appropriated as mentioned in subsection (3)(a) above, or
before being so disposed of or appropriated, is not subjected to initial treatment or is subjected to initial treatment which does not include fractionation;
“the principal Act” means the Oil Taxation Act 1975; and
“the Oil Taxation Acts” means Part I of the principal Act and any enactment which is to be construed as one with that Part.
In this section “fractionation” means the treatment of gas in order to separate gas of one or more kinds as mentioned in paragraph 2A(3) of Schedule 3 to the principal Act; and for the purposes of subsection (6)(a) above,—
the proportion of methane, ethane or a combination of the two in any gas shall be determined at a temperature of 15[2B]dgC and at a pressure of one atmosphere; and
any component other than methane, ethane or liquified petroleum gas shall be disregarded.
Section 8 of the Oil Taxation Act 1983 (qualifying assets) shall have effect, and be deemed always to have had effect, subject to the amendments in subsections (2) and (3) below.
In subsection (3) (which determines the oil field to which are attributable tariff receipts or disposal receipts referable to a qualifying asset) after the word “above”, both where it occurs in paragraph (c) and also in the words following paragraph (c), there shall be inserted “and subsection (3A) below”.
After subsection (3) there shall be inserted the following subsection—
Subsection (3A) of section 8 of this Act applies for the purposes of sub-paragraph (1) above as it applies for the purposes of subsection (3)(c) of that section.
The Broadcasting Act 1981 shall have effect with respect to additional payments payable by programme contractors under that Act subject to the amendments made by Part I of Schedule 22 to this Act.
The transitional provisions made by Part II of that Schedule shall have effect.
This section shall be deemed to have come into force on 1st April 1986.
In section 4(1) of the National Loans Act 1968 (which provides that the aggregate of any commitments of the Public Works Loan Commissioners in respect of undertakings to grant local loans and any amount outstanding in respect of the principal of such loans shall not exceed £28,000 million or such other sum not exceeding £35,000 million as the Treasury may specify by order) for the words “£28,000 million” and “£35,000 million” there shall be substituted respectively “£42,000 million” and “£50,000 million”.
—At the end of section 3 of the Exchange Equalisation Account Act 1979 (investment of the funds of the Exchange Equalisation Account) there shall be added the following subsection—
This Act may be cited as the Finance Act 1986.
In this Act “the Taxes Act” means the Income and Corporation Taxes Act 1970.
Part II of this Act, so far as it relates to income tax, shall be construed as one with the Income Tax Acts, so far as it relates to corporation tax, shall be construed as one with the Corporation Tax Acts and, so far as it relates to capital gains tax, shall be construed as one with the Capital Gains Tax Act 1979.
Part III of this Act shall be construed as one with the Stamp Act 1891.
Part V of this Act, other than section 100, shall be construed as one with the Capital Transfer Tax Act 1984.
The enactments and Orders specified in Schedule 23 to this Act are hereby repealed to the extent specified in the third column of that Schedule, but subject to any provision at the end of any Part of that Schedule.
Description of vehicle Rate of duty £ Hackney carriages 52·50 with an additional £1·05 for each person above 20 (excluding the driver) for which the vehicle has seating capacity.
Plated gross weight of vehicle Rate of duty 1. 2. 3. 4. 5. Exceeding Not exceeding Two axle vehicle Three axle vehicle Four or more axle vehicle tonnes tonnes £ £ £ 12 13 210 170 170 13 14 280 175 175 14 15 350 175 175 15 17 475 180 175 17 19 240 175 19 21 320 180 21 23 420 245 23 25 720 330 25 27 465 27 29 665 29 30·49 1,090
Plated train weight of tractor unit Rate of duty 1. 2. 3. 4. 5. Exceeding Not exceeding For a tractor unit to be used with semi-trailers with any number of axles For a tractor unit to be used only with semi-trailers with not less than two axles For a tractor unit to be used only with semi-trailers with not less than three axles tonnes tonnes £ £ £ 12 14 235 215 215 14 16 290 220 220 16 18 330 220 220 18 20 385 220 220 20 22 435 270 220 22 23 465 300 220 23 25 530 365 225 25 26 530 405 265 26 28 530 500 345 28 29 555 555 390 29 31 765 765 495 31 33 1,115 1,115 780 33 34 1,230 1,230 1,150 34 36 1,405 1,405 1,405 36 38 1,580 1,580 1,580
Plated train weight of tractor unit Rate of duty 1. 2. 3. 4. 5. Exceeding Not exceeding For a tractor unit to be used with semi-trailers with any number of axles For a tractor unit to be used only with semi-trailers with not less than two axles For a tractor unit to be used only with semi-trailers with not less than three axles tonnes tonnes £ £ £ 12 14 215 215 215 14 20 220 220 220 20 22 270 220 220 22 23 300 220 220 23 25 365 220 220 25 26 405 225 220 26 28 500 230 225 28 29 555 270 230 29 31 765 325 240 31 33 1,115 495 250 33 34 1,140 725 315 34 36 1,205 1,035 475 36 38 1,390 1,390 710
Section 3(7).
In the Vehicles (Excise) Act 1971 (in this Part of this Schedule referred to as “the 1971 Act”), section 2A (power to modify duration of licences and rates of duty) as set out in paragraph 5 of Schedule 7 to that Act (transitional provisions) shall be amended as follows. In subsection (1) after paragraph (a) there shall be inserted the following paragraph—. In subsection (2), in paragraph (a) of the proviso, for the words “other than one of twelve months” there shall be substituted the words “of a fixed number of months other than twelve or for a period of less than a month”.
“tower wagon” means a goods vehicle—
In section 7 of the 1971 Act (miscellaneous exemptions from duty) after subsection (3) there shall be inserted the following subsection—
Section 16 of the 1971 Act (trade licences) shall be amended as follows. In subsection (1) (issue of trade licences)— After subsection (1) there shall be inserted the following subsection— In subsection (3) (which specifies the cases in which regulations may allow a vehicle to be used under a trade licence to carry a load) after paragraph (b) there shall be inserted the following paragraph—. After subsection (4) there shall be inserted the following subsections— Subsection (5) (fees) shall be amended as follows— and a person shall be treated for the purposes of paragraph (a) above
In section 17(2) of the 1971 Act (surrender of licences) as set out in paragraph 13 of Part I of Schedule 7 to the Act, paragraph (a) and, in paragraph (b), the words from the beginning to “class” shall be omitted.
Section 23 of the 1971 Act (regulations with respect to the transfer and identification of vehicles) shall be amended as follows—
in paragraph (f) (replacement documents) the words “and as to the fee payable in prescribed circumstances in respect of any replacement” shall be omitted; and
in the section as set out in paragraph 20 of Part I of Schedule 7 to the Act in subsection (1)(e) (replacement books) the words “and for the fee to be paid on the issue of a new registration book” shall be omitted.
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in paragraph (f) (replacement documents) the words "and as to the fee payable in prescribed circumstances in respect of any replacement" shall be omitted; and
in the section as set out in paragraph 20 of Part I of Schedule 9 to the Act in subsection (1)(e) (replacement books) the words "and for the fee to be paid on the issue of a new registration book" shall be omitted.
Section 5.
Section 93 of the Customs and Excise Management Act 1979 (warehousing regulations) shall be amended in accordance with paragraphs 2 to 7 below.
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The following shall be inserted after subsection (2)(e)—.
The following shall be substituted for subsection (2)(g) (business records)—
In this subsection ”relevant business or activity’ means, in relation to an occupier or proprietor, any business or activity of his which includes occupation of a warehouse or (as the case may be) proprietorship of goods in a warehouse or goods which have been in or are to be deposited in a warehouse, where the goods are of a kind in which the proprietor trades or deals.
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The following shall be substituted for subsection (7) (interpretation)—
In consequence of the amendments made by the preceding provisions of this Schedule, the following provisions of section 15 of the Alcoholic Liquor Duties Act 1979 (which relate to regulations about distillers’ warehouses) shall cease to have effect—
subsections (6A) and (6B), and
the words “restriction or requirement” in subsection (7) and in subsection (8).
Section 6.
In section 1 (general betting duty) in subsection (1) for the words “Great Britain” there shall be substituted “the United Kingdom”. In subsection (3) of that section after the words “Act 1963” there shall be inserted the words “or Article 37 of the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985”.
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In section 9 (prohibitions for protection of revenue) for the words “Great Britain”, wherever they occur, there shall be substituted “the United Kingdom”. In subsection (3)(a) of that section the words “Northern Ireland or” and “of the Parliament of Northern Ireland or, as the case may be,” shall be omitted.
In section 12(4) (interpretation of provisions relating to betting duties)—
“betting office licence”— “bookmaker”— and (in either case) the expression ”bookmaking’ shall be construed accordingly; “bookmaker’s permit”—
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the words from “and ”betting office licence”’to the end shall be omitted.
In section 17(1) (charge of bingo duty) for the words “Great Britain” there shall be substituted “the United Kingdom”.
In section 19(2) (bingo played in more than one place)—
for the words “Great Britain”, in both places where they occur, there shall be substituted “the United Kingdom”; and
the words “Northern Ireland or” and the words “the Parliament of Northern Ireland or, as the case may be,” shall be omitted.
”United Kingdom’ includes the territorial waters of the United Kingdom;
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In section 35, for subsection (3) (extent) there shall be substituted— Subsection (4) of that section shall be omitted.
In Schedule 1 (betting duties) .... In paragraph 15 of that Schedule—
In Schedule 3 in paragraph 2(1) (small-scale bingo) after the words “Act 1968” there shall be inserted the words “or under Chapter II of Part III of the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985”. In paragraph 5 of that Schedule (small-scale amusements provided commercially) in sub-paragraph (1) after paragraph (a) there shall be inserted the following paragraph—. In paragraph 10(2) of that Schedule (registration of bingo-promoters) after the words “Act 1968” there shall be inserted the words “or under Chapter II of Part III of the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985”.
In section 287(1)(a) of the Companies Act (Northern Ireland) 1960 (preferential payments), for head (iv) there shall be substituted the following head—.
In Article 19(a) of the Bankruptcy Amendment (NorthernIreland) Order 1980 (preferential payments), for head (v) there shall be substituted the following head—.
The Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985 shall be amended as follows. In Article 7, after paragraph (4), there shall be inserted the following paragraph—. In Article 61, after paragraph (4) there shall be inserted the following paragraph—. In Article 174 (registration of licences, etc)— In the following provisions, namely— any reference to the sub-divisional commander of the police sub-division shall be construed as including a reference to the Collector of Customs and Excise for the area, and any reference to the police sub-division shall be construed as including a reference to the area for which the Collector is responsible.
Any regulations made under Schedule 1 (betting duties) to the Betting and Gaming Duties Act 1981, in so far as they have effect immediately before the betting commencement date, shall have effect on and after that date in relation to Northern Ireland as if— . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
In section 101 of the Customs and Excise Management Act 1979 (grant of excise licences)—
in subsection (1), for the words “the appropriate duty” there shall be substituted “any appropriate duty”; and
in subsection (3), for the words “taken out” there shall be substituted “held” and for the words “in any one licence year” there shall be substituted “at any one time”.
In sections 102(1) and 104(3) of the Customs and Excise Management Act 1979 (payment for and transfer of excise licences), for the words “the duty” there shall be substituted “any duty”.
Section 12 of the Alcoholic Liquor Duties Act 1979 (distillers’ licences) shall be amended in accordance with this paragraph. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At the end of subsection (5) there shall be added the words “and where the largest still so used on any premises in respect of which a licence is held is of less than that capacity, the Commissioners may revoke the licence or attach to it such conditions as they see fit to impose”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
In Schedule 3 to the Hydrocarbon Oil Duties Act 1979 (subjects for regulations under section 21 of that Act), in paragraphs 2, . . . and 18 (which relate to licences for the production etc. of hydrocarbon oil, petrol substitutes and road fuel gas respectively) for the words “Fixing the date of expiration of any such licence” there shall be substituted “Specifying the circumstances in which any such licence may be surrendered or revoked”.
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This Schedule has effect to determine the consideration referred to in subsection (7) of section 9 of this Act in respect of any one vehicle; and in this Schedule—
“the principal section” means that section;
“the prescribed accounting period” means that in respect of supplies in which the consideration is to be determined; and
“the individual” means the individual to whom those supplies are treated as made.
. . .Where the prescribed accounting period is a period of three months, the consideration appropriate to any vehicle is that specified in relation to a vehicle of the appropriate description in the second column of Table A below. . . .Where the prescribed accounting period is a period of one month, the consideration appropriate to any vehicle is that specified in relation to a vehicle of the appropriate description in the third column of Table A below. Description of vehicle (Type of engine and cylinder capacity in cubic centimetres) 3 month period 1 month period £ £ Diesel engine 2000 or less 145 48 More than 2000 187 62 Any other type of engine 1400 or less 160 53 More than 1400 but not more than 2000 202 67 More than 2000 300 100
The Treasury may by order taking effect from the beginning of any prescribed accounting period beginning after the order is made substitute a different Table for either of the Tables set out above.
Where, by virtue of subsection (8) of the principal section, subsection (7) of that section has effect as if, in the prescribed accounting period, supplies of fuel for private use made in respect of two or more vehicles were made in respect of only one vehicle, the consideration appropriate shall be determined as follows— For the purposes of sub-paragraph (1)(b) above, the relevant fraction in relation to any vehicle is that which the part of the prescribed accounting period in which fuel for private use was supplied in respect of that vehicle bears to the whole of that period.
In the case of a vehicle having an internal combustion engine one or more reciprocating pistons, its cubic capacity for the purposes of Tables A and B above is the capacity of its engine as calculated for the purposes of the Vehicles (Excise) Act 1971 or the Vehicles (Excise) Act (Northern Ireland) 1972. In the case of a vehicle not falling within sub-paragraph (1) above, its cubic capacity shall be such as may be determined for the purposes of Tables A and B above by order by the Treasury.
In the principal section "qualifying expenditure", in relation to a chargeable period of a charity, means, subject to sub-paragraph (3) below, expenditure incurred in that period for charitable purposes only. For the purposes of the principal section (and sub-paragraph (1) above), where expenditure which is not actually incurred in a particular chargeable period properly falls to be charged against the income, of that chargeable period as being referable to commitments (whether or not of a contractual nature) which the charity has entered into before or during that period, it shall be treated as incurred in that period. A payment made (or to be made) to a body situated outside the United Kingdom shall not be qualifying expenditure by virtue of this Part of this Schedule unless the charity concerned has taken such steps as may be reasonable in the circumstances to ensure that the payment will be applied for charitable purposes.
Investments specified in any of the following paragraphs of this Part of this Schedule are qualifying investments for the purposes of the principal section.
Any investment falling within Part I, Part II, apart from paragraph 13 (mortgages etc.), or Part III of Schedule I to the Trustee Investments Act 1961.
Any investment in a common investment fund established under section 22 of the Charities Act 1960 or section 25 of the Charities Act (Northern Ireland) 1964 or in any similar fund established for the exclusive benefit of charities by or under any enactment relating to any particular charities or class of charities.
Any interest in land, other than an interest held as security for a debt of any description.
Shares in, or securities of, a company which are quoted on a recognised stock exchange (within the meaning of section 535 of the Taxes Act), or which are dealt in on the Unlisted Securities Market.
Units, or other shares of the investments subject to the trusts, of a unit trust scheme within the meaning of the Financial Services Act 1986. Until the passing of the Financial Services Act 1986, the reference in sub-paragraph (1) above to that Act shall have effect as a reference to the Prevention of Fraud (Investments) Act 1958.
Deposits with a recognised bank or licensed institution (within the meaning of the Banking Act 1979) in respect of which interest is payable at a commercial rate. A deposit mentioned in sub-paragraph (1) above is not a qualifying investment if it is made as part of an arrangement under which a loan is made by the recognised bank or licensed institution to some other person.
Certificates of deposit as defined in section 55(3) of the Finance Act 1968.
Any loan or other investment as to which the Board are satisfied, on a claim made to them in that behalf, that the loan or other investment is made for the benefit of the charity and not for the avoidance of tax (whether by the charity or any other person). The reference in sub-paragraph (1) above to a loan includes a loan which is secured by a mortgage or charge of any kind over land.
For the purposes of the principal section, a loan which is not made by way of investment is a qualifying loan if it consists of—
a loan made to another charity for charitable purposes only; or
a loan to a beneficiary of the charity which is made in the course of carrying out the purposes of the charity; or
money placed on a current account with a recognised bank or licensed institution (within the meaning of the Banking Act 1979) otherwise than as part of such an arrangement as is mentioned in paragraph 8(2) above; or
any other loan as to which the Board are satisfied, on a claim made to them in that behalf, that the loan is made for the benefit of the charity and not for the avoidance of tax (whether by the charity or any other person).
This part of this Schedule applies in the circumstances specified in subsection (6) of the principal section; and in this Part of this Schedule—
"the primary period" means the chargeable period of the charity concerned in which there is such an excess as is mentioned in that subsection;
"unapplied non-qualifying expenditure" means so much of the excess referred to in that subsection as does not exceed the non-qualifying expenditure of the primary period; and
"earlier period", in relation to an amount of unapplied nonqualifying expenditure, means any chargeable period of the charity concerned which ended not more than six years before the end of the primary period.
So much of the unapplied non-qualifying expenditure as is not shown by the charity to be the expenditure of non-taxable sums received by the charity in the primary period shall be treated in accordance with paragraph 14 below as non-qualifying expenditure of earlier periods. In sub-paragraph (1) above "non-taxable sums" means donations, legacies and other sums of a similar nature which, apart from any provision of the enactments conferring exemption from tax, are not within the charge to tax.
Where, in accordance with paragraph 13 above, an amount of unapplied non-qualifying expenditure (in this paragraph referred to as "the excess expenditure") falls to be treated as non-qualifying expenditure of earlier periods.— Where there is more than one earlier period to which the excess expenditure can be attributed in accordance with sub-paragraph (1) above, it shall be attributed to later periods in priority to earlier periods. In so far as any of the excess expenditure cannot be attributed to earlier periods in accordance with this paragraph, it shall be disregarded for the purposes of subsection (6) of the principal section (and this Part of this Schedule).
All such adjustments shall be made, whether by way of the making of assessments or otherwise, as are required in consequence of the provisions of this Part of this Schedule.
Section 39.
The Treasury may make regulations providing that an individual who invests under a plan shall be entitled to relief from income tax and capital gains tax in respect of the investments. The regulations shall set out the conditions subject to which plans are to operate and the extent to which investors are to be entitled to relief from tax. In particular, the regulations may—
The regulations may include provision that in prescribed circumstances— The regulations may include provision that an investor under a plan or the plan manager concerned (depending on the terms of the regulations) shall account to the Board for tax from which relief has been given in circumstances such that the investor was not entitled to it. The regulations may include provision adapting, or modifying the effect of, any enactment relating to income tax or to capital gains tax in order to— The regulations may provide that a person who is, or has at any time been, either an investor under a plan or a plan manager— The regulations may include provision generally for the purpose of bringing plans into existence, and generally for the purpose of the administration of plans and the administration of income tax, corporation tax and capital gains tax in relation to them. The words "Regulations under Schedule 8 to the Finance Act 1986" shall be added at the end of each column in the Table in section 98 of the Taxes Management Act 1970 (penalties for failure to furnish information etc.).
The power to make regulations under this Schedule shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons. In this Schedule "prescribed" means prescribed by the regulations.
Section 40.
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In paragraph 2(7)(b), after "5" there shall be inserted "5A, 5B, 5C".
In paragraph 2A—
in sub-paragraph (1)(a), for the words from "from" to the end there shall be substituted the words "to be carried on by the company or by any subsidiary of the company and from which it is intended that a qualifying trade (to be so carried on) will be derived; or";
in sub-paragraph (2) for the words from "at the time" to "by it; or" there shall be substituted the words "by the company or by any subsidiary of the company on the date on which the shares are issued, or begins so to be carried on immediately thereafter, and from which it is intended that a qualifying trade (to be so carried on) will be derived; or";
in sub-paragraph (3), after the word "company" there shall be inserted the words "or (as the case may be) subsidiary"; and
in sub-paragraph (4), the words "and the words 'by the company' shall be omitted" shall be added at the end.
After paragraph 2A there shall be inserted the following paragraph— This paragraph has effect in relation to shares issued at any time after the passing of" this Act.
An individual who is at any time performing duties which are treated by virtue of section 184(3)(a) of the Taxes Act (Crown employees serving overseas) as performed in the United Kingdom shall be treated, for the purposes of this paragraph, as resident and ordinarily resident in the United Kingdom at that time. This paragraph shall have effect in relation to shares issued on or after 6th April 1986.
Paragraph 5 shall be amended as follows. In sub-paragraph (1) the words "Subject to paragraph 5A below" shall be inserted at the beginning. Where a company has one or more qualifying subsidiaries, it shall not be a qualifying company if the qualifying trade or trades carried on by the company and its subsidiaries, taken as a whole, are not carried out wholly or mainly in the United Kingdom Sub-paragraphs (8) to (11) shall cease to have effect.
The following paragraphs shall be inserted after paragraph 5—
Paragraph 6 shall be amended as follows. The trade must not at any time in the relevant period consist of one or more of the following activities if that activity amounts, or those activities when taken together amount, to a substantial part of the trade— A trade shall not be treated as failing to comply with this paragraph by reason only of its consisting of letting ships, other than oil rigs or pleasure craft, on charter if— but where any of the requirements mentioned in paragraphs (a) to (d) above are not satisfied in relation to any lettings of such ships, the trade shall not thereby be treated as failing to comply with this paragraph if those lettings and any other activity of a kind falling within paragraph 6(2) above do not, when taken together, amount to a substantial part of the trade. The conditions are that— but this sub-paragraph shall have effect, in relation to any letting between the company in question and its subsidiary, or between it and another company of which it is a subsidiary or between it and a company which is a subsidiary of the same company of which it is a subsidiary, as if paragraph (c) were omitted. For the purposes of sub-paragraph (2)(b) above— For the purposes of this paragraph a person has a controlling interest in a trade— For the purposes of sub-paragraph (5) above there shall be attributed to any person any rights or powers of any other person who is an associate of his. References in this paragraph to a trade shall be construed without regard to so much of the definition of "trade" in section 526 (5) of the Taxes Act as relates to adventures or concerns in the nature of trade; but the foregoing provisions do not affect the construction of references in sub-paragraph (2)(g) or (5) above to a trade carried on by a person other than the company and those references shall be construed as including references to any business, profession or vocation. The Treasury may by order made by statutory instrument amend this paragraph in such manner as they consider expedient. Any order under sub-paragraph (8) above shall be subject to annulment in pursuance of a resolution of the Commons House of Parliament. In this paragraph— Sub-paragraph (2) above, so far as it relates to oil extraction, has effect in relation to shares issued at any time after the passing of this Act.
Paragraph 7 shall be amended as follows. Where an option, the exercise of which would bind the grantor to purchase any shares, is granted to an individual during the relevant period, the individual shall not be entitled to any relief in respect of the shares to which the option relates. In sub-paragraph (2), for the words "company shall" there shall be substituted the words "company, and any option of the kind mentioned in sub-paragraph (1A) above, shall", and after the word "given", in each place, there shall be inserted the words "(and not withdrawn)". In sub-paragraph (2A) the words "(and not withdrawn)" shall be inserted after the word "given" and the words "(subject to subparagraph (2) above)" shall be inserted after the words "class shall". For the purposes of this paragraph and of Chapter II as applied by this paragraph— The amendment made by sub-paragraph (4) above, which is enacted for the avoidance of doubt, shall be deemed to have been incorporated in Schedule 5 to the Finance Act 1983 as originally enacted but otherwise this paragraph has effect in relation to options granted at any time after 18th March 1986.
Paragraph 8 shall be amended as follows. In sub-paragraph (1), the words "Subject to paragraph 7 above" shall be inserted at the beginning. Subject to sub-paragraph (3) below, section 58(2) to (4) and (6) to (9) of Chapter II shall apply but— Where relief to which an individual is entitled in respect of eligible shares is reduced by virtue of this paragraph, effect shall be given to the reduction by apportioning it, as between the eligible shares held by him, in such a way as appears to the inspector, or on an appeal to the Commissioners concerned, to be just and reasonable. The amendment made by sub-paragraph (2) above, which is enacted for the avoidance of doubt, shall be deemed to have been incorporated in Schedule 5 to the Finance Act 1983 as originally enacted.
Paragraph 10 shall be amended as follows. In sub-paragraph (1)(b), after "thereby" there shall be inserted the words "withdrawn or reduced by virtue of paragraph 7 above or". Where relief to which an individual is entitled in respect of eligible shares is reduced by virtue of this paragraph, effect shall be given to the reduction by apportioning it as between the eligible shares held by him in such a way as appears to the inspector, or on an appeal to the Commissioners concerned, to be just and reasonable.
After paragraph 10 there shall be inserted the following paragraph—
For the purposes of the provisions of the Taxes Management Act 1970 relating to appeals against decisions on claims, the refusal of the inspector to authorise the issue of a certificate under sub-paragraph (2) above shall be taken to be a decision refusing a claim made by the company.
In paragraph 14(2)(a), for the words "or 10(1)" there shall be substituted the words "10(1) or 16A".
After paragraph 15 there shall be inserted the following paragraph—
Paragraph 16 shall be amended as follows. Where— any gain or loss which accrues to him on that disposal shall not be a chargeable gain or (as the case may be) allowable loss for the purposes of capital gains tax. In sub-paragraph (3) after the word "given" in both places, there shall be inserted the words "(and not withdrawn)". Where section 44 of the Act of 1979 (disposals between husband and wife to be on a no gain/no loss basis) has applied to any eligible shares disposed of by an individual to his or her spouse ("the transferee"), sub-paragraph (1) above shall apply in relation to the subsequent disposal of the shares by the transferee to a third party. Where section 85 (exchange of securities for those in another company) or 86 (reconstruction or amalgamation involving issue of securities) of the Act of 1979 would, but for this subparagraph, apply in relation to eligible shares in respect of which an individual has been given relief, that section shall apply only if the relief is withdrawn.
After paragraph 16 there shall be inserted the following paragraph—. Sub-paragraphs (1) to (3) of the inserted paragraph 16A have effect in relation to reorganisations occurring at any time after 18th March 1986 and sub-paragraph (5) of that paragraph has effect in relation to disposals made at any time after that date.
A qualifying company may, in the relevant period, have one or more subsidiaries if— The conditions are— The conditions shall not be regarded as ceasing to be satisfied by reason only of the subsidiary or the qualifying company being wound up, or dissolved without winding up, if— The conditions shall not be regarded as ceasing to be satisfied by reason only of the disposal by the qualifying company or (as the case may be) by another subsidiary, within the relevant period, of all its interest in the subsidiary if it is shown that the disposal is for bona fide commercial reasons and not part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax. For the purposes of this paragraph—
In paragraph 2(9), for the words "to (8A)" there shall be substituted the words "and (8)". In paragraph 18(4), for the words "section 65(2)(c) of Chapter II" there shall be substituted the words "paragraph 17(lA)(e) above".
After paragraph 19 there shall be inserted the following paragraph—.
Paragraph 20 shall be amended as follows. In sub-paragraph (2) the following definitions shall be inserted at the appropriate places— For the purposes of this Schedule, the market value at any time of any asset shall be taken to be the price which it might reasonably be expected to fetch on a sale at that time in the open market free from any interest or right which exists by way of security in or over it. References in this Schedule to relief given to an individual in respect of eligible shares, and to the withdrawal of such relief, include respectively references to relief given to him in respect of those shares at any time after he has disposed of them and references to the withdrawal of such relief at any such time. Any reference in paragraph 2 above, as modified by paragraph 2B above, to any licence being held by, or granted to, any person shall be read as including a reference to such a licence being held by, or (as the case may be) granted to, that person together with one or more other persons. The Treasury may by order made by statutory instrument amend any of the definitions set out in sub-paragraph (2) above which relate to licences under the Petroleum (Production) Act 1934 or under the Petroleum (Production) Act (Northern Ireland) 1964. Any order under sub-paragraph (6) above shall be subject to annulment in pursuance of a resolution of the Commons House of Parliament.
In the Taxes Management Act 1970 the following section shall be inserted after section 47A—
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Paragraph 15A(2) of Schedule 5 to the Finance Act 1983
Paragraph 15A(1) of Schedule 5 to the Finance Act 1983
Section 252 of the Taxes Act (company reconstructions without change of ownership) shall be amended as follows. After subsection (3) (successor entitled to carry forward predecessor's loss) there shall be inserted— In subsection (8) (apportionment of receipts or expenses in case of partial change) for the words from "any", in the second place where it occurs, to the end there shall be substituted "such apportionments of receipts, expenses, assets or liabilities shall be made as may be just." In subsection (9) (determination of manner of apportionment) for "sum" in each place where it appears there shall be substituted "item".
The following shall be inserted at the end of section 253 of the Taxes Act (company reconstructions: supplemental)—
Where an amount for which a company is entitled to relief by virtue of section 252(3) of the Taxes Act (company reconstructions: successor's entitlement to carry forward predecessor's loss) is reduced by virtue of section 252(3A) of that Act, the part of the amount in respect of which, by reason of the reduction, there is no relief shall for the purposes of this paragraph be taken to consist— In sub-paragraph (5A) above 'the predecessor' has the same meaning as in section 252 of the Taxes Act.
Where a person who is an entertainer or sportsman of a prescribed description performs an activity of a prescribed description in the United Kingdom (a relevant activity), this Schedule shall apply if he is not resident in the United Kingdom in the year of assessment in which the relevant activity is performed.
Where a payment is made (to whatever person) and it has a connection of a prescribed kind with the relevant activity, the person by whom it is made shall on making it deduct out of it a sum representing income tax and shall account to the Board for the sum. The sum mentioned in sub-paragraph (1) above shall be such as is calculated in accordance with prescribed rules but shall in no case exceed the relevant proportion of the payment concerned; and "relevant proportion" here means a proportion equal to the basic rate of income tax for the year of assessment in which the payment is made. Where a transfer is made (to whatever person) and it has a connection of a prescribed kind with the relevant activity, the person by whom it is made shall account to the Board for a sum representing income tax. The sum mentioned in sub-paragraph (3) above shall be such as is calculated in accordance with prescribed rules but shall in no case exceed the relevant proportion of the value of what is transferred; and References in this paragraph and in the following provisions of this Schedule to a payment include references to a payment by way of loan of money. References in this paragraph and in the following provisions of this Schedule to a transfer do not include references to a transfer of money but, subject to that, include references to a temporary transfer (as by way of loan) and to a transfer of a right (whether or not a right to receive money). This paragraph shall not apply to payments or transfers of such a kind as may be prescribed.
Regulations may— The words "Regulations under paragraph 3 of Schedule 11 to the Finance Act 1986" shall be added at the end of each column in the Table in section 98 of the Taxes Management Act 1970 (penalties for failure to furnish information etc.).
Where in accordance with paragraphs 2 and 3 above a person pays a sum to the Board, they shall treat it as having been paid on account of a liability of another person to income tax or corporation tax; and the liability and the other person shall be such as are found in accordance with prescribed rules. Where the sum exceeds the liability concerned, the Board shall pay such of the sum as is appropriate to the other person mentioned in sub-paragraph (1) above. Where no liability is found as mentioned in sub-paragraph (1) above, the Board shall pay the sum to the person to whom the relevant payment or transfer was made; and here "the relevant payment or transfer" means the payment or transfer to which paragraph 2 above applies and which gave rise to the payment of the sum concerned to the Board. In construing references to a sum in sub-paragraphs (1) to (3) above, anything representing interest shall be ignored.
No obligation as to secrecy imposed by statute or otherwise shall preclude the Board or an authorised officer of the Board from disclosing to any person who appears to the Board to have an interest in the matter information which may be relevant to determining whether paragraph 2 above applies to a payment or transfer.
Where a payment is made (to whatever person) and it has a connection of the prescribed kind with the relevant activity, the activity shall be treated for the purposes of the Tax Acts as performed in the course of a trade, profession or vocation exercised by the entertainer or sportsman within the United Kingdom, to the extent that (apart from this paragraph) it would not be so treated. This paragraph shall not apply unless the payment is one to which paragraph 2 above applies. This paragraph shall not apply where the relevant activity is performed in the course of an office or employment. References in this paragraph to a payment include references to a transfer.
Where a payment is made to a person who fulfils a prescribed description but is not the entertainer or sportsman, and the payment has a connection of the prescribed kind with the relevant activity.— Regulations may provide for the deduction, in computing any profits or gains of the entertainer or sportsman arising from the payment, of expenses incurred by other persons in relation to the payment. Regulations may provide that any liability to tax (whether of the entertainer or sportsman or of another person) which would, apart from this paragraph, arise in relation to the payment shall not arise or shall arise only to a prescribed extent. This paragraph shall not apply unless the payment is one to which paragraph 2 above applies. This paragraph shall not apply in such circumstances as may be prescribed. References in this paragraph to a payment include references to a transfer.
Where income tax is chargeable under Case I or Case II of Schedule D on the profits or gains arising from payments (made to whatever person) and the payments have a connection of the prescribed kind with relevant activities of the entertainer or sportsman, such tax shall be charged— Regulations may— References in sub-paragraph (2)(a) and (c) above to a trade, profession or vocation of the entertainer or sportsman include references to that first mentioned in sub-paragraph (1)(a) above as well as to any other exercised by him. This paragraph shall not apply in the case of a payment unless it is one to which paragraph 2 above applies. References in this paragraph to a payment include references to a transfer.
A payment to which paragraph 2(1) above applies shall be treated for the purposes of the Tax Acts as not diminished by the sum mentioned in paragraph 2(1). Regulations may provide that for the purposes of the Tax Acts the value of what is transferred by a transfer to which paragraph 2(3) above applies shall be calculated in accordance with prescribed rules. In particular, the rules may include provision for the calculation of an amount representing the actual worth of what is transferred, for that amount to be treated as a net amount corresponding to a gross amount from which income tax at the basic rate has been deducted, and for the gross amount to be taken to be the value of what is transferred.
Regulations may make provision generally for giving effect to this Schedule.
In this Schedule "prescribed" means prescribed by regulations. Regulations under this Schedule may make different provision for different cases or descriptions of case. The power to make regulations under this Schedule shall be exercisable by the Treasury by statutory instrument subject to annulment in pursuance of a resolution of the Commons House of Parliament.
This Schedule shall have effect for the year 1987—88 and subsequent years of assessment.
Section 46.
This paragraph applies where a payment is made to an employer out of funds which are or have been held for the purposes of a scheme which is or has at any time been an exempt approved scheme. An amount equal to 40 per cent, of the payment shall be recoverable by the Board from the employer. This paragraph applies whether or not the payment is made in pursuance of Part II of this Schedule. Paragraph 4 of Schedule 5 to the Finance Act 1970 (charge to tax on payments to employer) shall not apply to a payment to which this paragraph applies or would apply apart from sub-paragraph (5) or (6) below. This paragraph does not apply to a payment to the extent that, if this paragraph had not been enacted, the employer would have been exempt, or entitled to claim exemption, from income tax or corporation tax in respect of the payment. This paragraph does not apply where the employer is a charity; and "charity" here has the same meaning as in section 360 of the Taxes Act. This paragraph does not apply to any payment of any prescribed description. This paragraph does not apply to a payment made before the scheme became an exempt approved scheme. References in this paragraph to a payment include references to a transfer of assets or other transfer of money's worth. In this paragraph "exempt approved scheme" means an exempt approved scheme within the meaning given by section 21(1) of the Finance Act 1970. This paragraph applies to a payment made after 18th March 1986 unless made as mentioned in sub-paragraph (12) or (13) below. This paragraph does not apply to a payment made in pursuance of the winding-up of the scheme where the winding-up commenced on or before 18th March 1986. This paragraph does not apply to a payment made in pursuance of an application which—
In relation to an amount recoverable as mentioned in paragraph 1(2) above, regulations may make any of the provisions mentioned in sub-paragraph (2) below; and for this purpose the amount shall be treated as if it were— The provisions are— For the purpose of giving effect to any provision mentioned in sub-paragraph (2)(a) or (b) above the words "Regulations under paragraph 2 of Schedule 12 to the Finance Act 1986" shall be added at the end of each column in the Table in section 98 of the Taxes Management Act 1970 (penalties for failure to furnish information etc.). For the purpose of giving effect to any other provision mentioned in sub-paragraph (2) above, regulations under this paragraph may include provision applying (with or without modifications) provisions of the enactments relating to income tax and corporation tax. Subject to any provision of regulations under this paragraph— If the employer is a company and a payment to which paragraph 1 above applies is made at a time not otherwise within an accounting period of the company, an accounting period of the company shall for the purposes of sub-paragraph (1)(b) above be treated as beginning immediately before the payment is made.
In this Part of this Schedule "prescribed" means prescribed by regulations. The power to make regulations under this Part of this Schedule shall be exercisable by the Treasury by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.
The Board may make regulations providing for this Part of this Schedule to apply, as from a prescribed date, in relation to any exempt approved scheme of a prescribed kind. The Board may make regulations providing for prescribed provisions of this Part of this Schedule to apply, as from a prescribed date, in prescribed circumstances, and subject to any prescribed omissions or modifications, in relation to any exempt approved scheme of another prescribed kind. In this Part of this Schedule— The power to make regulations under this paragraph shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.
The administrator of a scheme in relation to which this Part of this Schedule applies shall, in prescribed circumstances and at a prescribed time, either produce to the Board a written valuation such as is mentioned in sub-paragraph (2) below or give to the Board a certificate such as is mentioned in sub-paragraph (3) below. The valuation must be a valuation of the assets held for the purposes of the scheme and the liabilities of the scheme, must be determined in accordance with prescribed principles and fulfil prescribed requirements, and must be signed by a person with qualifications of a prescribed kind. The certificate must state whether or not the value of the assets (as determined in accordance with prescribed principles) exceeds the value of the liabilities (as so determined) by a percentage which is more than the prescribed maximum, must be in a prescribed form, and must be signed by a person with qualifications of a prescribed kind. Paragraph 5 of Schedule 12 to the Finance Act 1986
Subject to paragraph 7(4) below, where a valuation produced under paragraph 5 above shows, or a certificate given under that paragraph states, that the value of the assets exceeds the value of the liabilities by a percentage which is more than the prescribed maximum, the administrator of the scheme shall within a prescribed period submit to the Board for their approval proposals which comply with subparagraph (2) below. The proposals must be proposals for reducing (or, subject to paragraph (b) below, eliminating) the excess in a way or ways set out in the proposals and falling within sub-paragraph (3) below; and they must be such as to secure that— Subject to sub-paragraph (4) below, the permitted ways of reducing or eliminating the excess are— In prescribed circumstances sub-paragraph (3) above shall apply subject to such omissions or modifications as may be prescribed. Subject to paragraph 7(4) below, if the administrator of the scheme fails to submit proposals to the Board within the period mentioned in sub-paragraph (1) above, or if proposals submitted to them within that period are not approved by the Board within a further prescribed period, paragraph 10 below shall apply.
Where a valuation has been produced under paragraph 5 above, the Board may serve on the administrator of the scheme a notice requiring him to furnish the Board, within a prescribed period, with such particulars relating to the valuation as may be specified in the notice. Where a certificate has been given under paragraph 5 above, the Board may serve on the administrator of the scheme a notice requiring him to produce to the Board, within a prescribed period, a written valuation such as is mentioned in paragraph 5(2) above. Where a valuation has been produced in compliance with a notice served under sub-paragraph (2) above, the Board may serve on the administrator of the scheme a further notice requiring him to furnish the Board, within a prescribed period, with such particulars relating to the valuation as may be specified in the notice. Where a notice is served on the administrator of a scheme under sub-paragraph (1) or (2) above, paragraph 6(1) and (5) above shall cease to apply. Paragraph 7 of Schedule 12 to the Finance Act 1986
Where particulars have been furnished under paragraph 7 above, or a valuation has been produced under that paragraph, the Board shall, within a prescribed period, serve on the administrator of the scheme a notice— For the purposes of sub-paragraph (1)(b) above, the relevant time is the time specified in the valuation produced under paragraph 5 or 7 above as the time by reference to which the values of the assets and liabilities are determined. Where— the administrator of the scheme shall within a prescribed period submit to the Board for their approval proposals which comply with paragraph 6(2) to (4) above. If the administrator of the scheme fails to submit proposals to the Board within the period mentioned in sub-paragraph (3) above, or if proposals submitted to them within that period are not approved by the Board within a further prescribed period, paragraph 10 below shall apply.
Where proposals are submitted to the Board under paragraph 6(1) or 8(3) above and they approve them within the further prescribed period mentioned in paragraph 6(5) or 8(4) above, the administrator of the scheme shall carry out the proposals within the period mentioned in paragraph 6(2) above. If the administrator fails to carry out the proposals within that period, paragraph 10 below shall apply.
Where this paragraph applies the Board may specify a percentage equivalent to the fraction— For the purposes of this paragraph the relevant time is the time specified— as the time by reference to which the values of the assets and liabilities are determined. Where a percentage has been so specified— Sub-paragraphs (5) to (8) below shall apply where a percentage has been so specified, securities are transferred in the relevant period, and the transferor or transferee is such that, if he became entitled to any interest on them, exemption could be allowed under section 21(2) of the Finance Act 1970. Paragraph 32(1) and (2) of Schedule 23 to the Finance 1985 (accrued income scheme) shall not apply. Where, in consequence of sub-paragraph (5) above, section 73(2)(a) or (3)(b) of the 1985 Act applies, the sum concerned shall be treated as reduced by an amount equal to the specified percentage of itself. Where, in consequence of sub-paragraph (5) above, section 73(2)(b) or (3)(a) of the 1985 Act applies, the relief concerned shall be treated as reduced by an amount equal to the specified percentage of itself. For the purposes of section 74(5) of the 1985 Act, the amount of interest falling to be reduced by the amount of the allowance shall be treated as the amount found after applying section 21(2) of the Finance Act 1970. In sub-paragraphs (4) to (8) above expressions which also appear in Chapter IV of Part II of the 1985 Act have the same meanings as in that Chapter. In this paragraph "the relevant period" means the period beginning at the relevant time and ending when it is proved to the satisfaction of the Board that the value of the assets (as determined in accordance with prescribed principles) exceeds the value of the liabilities (as so determined) by a percentage which is no more than the prescribed maximum.
The Board may make regulations providing that an appeal may be brought against a notice under paragraph 8(1)(b) above as if it were notice of the decision of the Board on a claim made by the administrator of the scheme concerned. Regulations under this paragraph may include— The power to make regulations under this paragraph shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.
Section 55.
In this Schedule— Any reference in this Schedule to mineral deposits is a reference to mineral deposits of a wasting nature and, in the case of a mineral asset which consists of or includes an interest in or right over mineral deposits or land, the asset shall not be regarded as situated in the United Kingdom unless the deposits or land are or is so situated. Any reference in this Schedule to assets representing any expenditure includes, in relation to expenditure on mineral exploration and access, any results obtained from any search, exploration or inquiry upon which the expenditure was incurred. Any reference in this Schedule to a chargeable period or its basis period is a reference to a chargeable period or, as the case may be, basis period beginning (or treated by virtue of section 55 of this Act as beginning) on or after 1st April 1986.
Chapter VI of Part I of the Capital Allowances Act 1968 (miscellaneous and general) applies for the purposes of this Schedule as if it were included in Chapter III of that Part. In section 77(4) of that Act, any reference to a specific provision of that Act includes a reference to Parts II to IV of this Schedule. In section 87(1) of that Act, at the end of the definition of "mineral deposits" there shall be added "and, for this purpose, geothermal energy, whether in the form of aquifers, hot dry rocks or otherwise, shall be treated as a natural deposit". The provisions of this Schedule apply in relation to a share in an asset of any description as, by virtue of the application of section 87(4) of that Act, they apply to a part of an asset; and, for the purposes of those provisions, a share in an asset of any description shall be deemed to be used for the purposes of a trade so long as, and only so long as, the asset is used for those purposes. In the following provisions— any reference to the Capital Allowances Act 1968 or to Part I thereof includes a reference to Part III of this Schedule.
For the purposes of this Schedule, expenditure incurred for the purposes of a trade by a person about to carry it on shall be treated as if it had been incurred by him on the first day on which he does carry it on. Without prejudice to sub-paragraph (1) above, pre-trading expenditure on machinery or plant and pre-trading exploration expenditure shall be treated for the purposes of Part III of this Schedule as incurred on the first day on which the person who incurred the expenditure carries on a trade of mineral extraction.
Subject to sub-paragraphs (2) to (5) below, in relation to a person carrying on a trade of mineral extraction, the following capital expenditure is qualifying expenditure, namely.— Where expenditure falling within sub-paragraph (1)(a) above is incurred by any person before he begins to carry on a trade of mineral extraction, it shall not be qualifying expenditure except to the extent that paragraph 5 or paragraph 6 below provides. Part IV of this Schedule shall have effect to limit in certain cases the amount of expenditure which is qualifying expenditure. Except as provided by paragraph 5 below, expenditure on the provision of machinery or plant or on any asset which has been treated for any chargeable period as machinery or plant is not qualifying expenditure. The following expenditure is not qualifying expenditure by virtue of this paragraph— Where a person carrying on a trade of mineral extraction incurs expenditure on seeking any planning permission necessary to enable any mineral exploration and access to be undertaken at any place or any mineral deposits to be worked and that permission is not granted, the expenditure shall be treated for the purposes of this Schedule as expenditure on mineral exploration and access; and in this sub-paragraph "seeking", in relation to planning permission, includes not only making any necessary application but also pursuing any appeal against a refusal of permission. In so far as any provision of this Schedule or of any other enactment is expressed to be about expenditure falling within subparagraph (1)(a) above or sub-paragraph (1)(b) above— shall be treated as falling within sub-paragraph (1)(b) above and not within sub-paragraph (1)(a) above.
This paragraph applies where— Where this paragraph applies and there is such an excess of expenditure as is referred to in sub-paragraph (3) below, then, for the purposes of this Schedule the person concerned shall be treated as incurring qualifying expenditure equal to that excess on the first day on which he begins to carry on a trade of mineral extraction; and that qualifying expenditure is in this Schedule referred to as pre-trading expenditure on machinery or plant. Subject to sub-paragraph (4) below, the excess referred to in subparagraph (2) above is the amount by which the capital expenditure referred to in sub-paragraph (1) above exceeds any sale, insurance, salvage or compensation moneys resulting from the event mentioned in paragraph (d) of that sub-paragraph. If, in a case where this paragraph applies, the mineral exploration and access at the source in connection with which the machinery or plant was used ceased before the first day referred to in sub-paragraph (2) above, any capital expenditure which was incurred more than six years before that day shall be left out of account in determining the amount of any excess under sub-paragraph (3) above.
This paragraph applies to capital expenditure which— Where this paragraph applies to any capital expenditure and the mineral exploration and access is continuing at the source in question at the time when the person concerned begins to carry on a trade of mineral extraction, so much of the expenditure as exceeds any relevant capital sum received by him is qualifying expenditure. Where this paragraph applies to any capital expenditure and the mineral exploration and access has ceased at the source in question before the time when the person concerned begins to carry on a trade of mineral extraction, so much of that expenditure as was incurred within the six years ending at that time and exceeds any relevant capital sum received by him shall be treated as qualifying expenditure incurred on the first day on which he begins to carry on that trade. In relation to capital expenditure to which this paragraph applies, a relevant capital sum is a capital sum— Expenditure which is qualifying expenditure by virtue of subparagraph (2) or sub-paragraph (3) above is in this Schedule referred to as pre-trading exploration expenditure.
Subject to sub-paragraphs (2) and (3) below, expenditure incurred by a person carrying on a trade of mineral extraction outside the United Kingdom and consisting of contributions of capital sums to the cost of— is by virtue of this paragraph qualifying expenditure. Expenditure incurred by any person as mentioned in sub-paragraph (1) above is not qualifying expenditure unless— Sub-paragraph (1) above does not apply—
Where a person who has ceased to carry on a trade of mineral extraction incurs expenditure on the restoration of the site of a source to the working of which that trade related and all or any of that expenditure— so much of that expenditure as falls within paragraphs (a) to (c) above and does not exceed the net cost of the restoration of the site shall be qualifying expenditure by virtue of this paragraph and shall be treated as incurred by him on the last day on which he carried on that trade. Any reference in this paragraph to the site of a source includes a reference to land used in connection with the working of the source. In this paragraph "restoration" includes landscaping and— For the purpose of this paragraph, the net cost to any person of the restoration of the site of a source is the excess, if any, of expenditure falling within paragraphs (a) to (c) of sub-paragraph (1) above over any receipts which— As respects the person by whom is incurred any expenditure which is qualifying expenditure by virtue of this paragraph.— All such adjustments shall be made, whether by way of discharge or repayment of tax or otherwise, as may be required in consequence of the preceding provisions of this paragraph.
Allowances shall be made in accordance with this paragraph to a person who carries on a trade of mineral extraction in respect of qualifying expenditure incurred by him for the purposes of that trade. Subject to sub-paragraph (4) below, for the chargeable period related to the incurring of the expenditure, there shall be made to the person incurring it an allowance equal to the appropriate percentage of the excess (if any) of that expenditure over any disposal receipts which he is required to bring into account by reference to that expenditure for that chargeable period. Subject to sub-paragraph (4) below, for each of the chargeable periods following that related to the incurring of the expenditure, there shall be made to the person incurring it an allowance equal to the appropriate percentage of the excess (if any) of that expenditure over the aggregate of— For a chargeable period for which, in accordance with paragraph 12 below, a balancing allowance falls to be made to any person in respect of any expenditure, sub-paragraph (2), or, as the case may be, sub-paragraph (3) above shall have effect with the omission of the words "the appropriate percentage of. Subject to sub-paragraph (6) below, in relation to expenditure which is qualifying expenditure falling within paragraph 4, paragraph 7 or paragraph 8 above, other than expenditure falling within paragraph 4(1)(b), the appropriate percentage is 25 and, in relation to all other qualifying expenditure, the appropriate percentage is 10. If a chargeable period or its basis period is part only of a year or if the period is a year of assessment but the trade has been carried on for part only of it, the percentage appropriate under sub-paragraph (5) above shall be correspondingly reduced.
In any case where— he shall bring into account as a disposal receipt in respect of that expenditure for the chargeable period related to the disposal or, as the case may be, cessation the disposal value of any asset falling within paragraph (b) above. If, at any time after a mineral asset has been acquired by any person, it begins to be used (by him or any other person) in a way which constitutes development but is neither existing permitted development nor development for the purposes of a trade of mineral extraction carried on by him, the asset shall be treated as having permanently ceased, immediately before that time, to be used by him for the purposes of that trade; and for the purposes of this subparagraph, "existing permitted development" means— and sub-paragraph (3) of paragraph 16 below applies for the purposes of this sub-paragraph as it applies for the purposes of sub-paragraph (2) of that paragraph. Subject to paragraph 18 below, subsections (6) and (7) of section 44 of the Finance Act 1971 (disposal value of machinery or plant) shall apply to determine the disposal value of any asset falling within subparagraph (1) above, substituting a reference to that asset for any reference in those subsections to machinery or plant. In any case where— he shall bring into account as a disposal receipt in respect of that expenditure for the chargeable period related to the receipt of that capital sum so much of it as is reasonably attributable to the expenditure.
If, for any chargeable period for which a person is required to bring into account a disposal receipt in respect of qualifying expenditure incurred by him, the aggregate of— exceeds the expenditure concerned, there shall be made on him a charge (in this Part of this Schedule referred to as a "balancing charge"). In relation to any qualifying expenditure, the amount on which a balancing charge is made for a chargeable period shall be whichever is the less of— In relation to any chargeable period, the net amount of the allowances made to any person for earlier chargeable periods under paragraph 9 above in respect of expenditure incurred by him means the total of those allowances less the total of the amounts on which balancing charges have been made on him for earlier chargeable periods, being charges arising by reason of his bringing into account disposal receipts in respect of that expenditure.
For the chargeable period related to the permanent discontinuance of a trade of mineral extraction, any allowance to which the person carrying on that trade is entitled under paragraph 9 above in respect of qualifying expenditure incurred by him for the purposes of that trade shall be a balancing allowance. If in any chargeable period or its basis period a person carrying on a trade of mineral extraction permanently ceases to work particular mineral deposits (and sub-paragraph (1) above does not apply in respect of that period) any allowance to which he is entitled for that chargeable period under paragraph 9 above in respect of— shall be a balancing allowance. Where a person carrying on a trade of mineral extraction is for the time being entitled to two or more mineral assets which at any time were comprised in a single mineral asset or were otherwise derived from a single mineral asset, sub-paragraph (2) above shall not apply until such time as he permanently ceases to work the deposits comprised in all the mineral assets concerned taken together and, for this purpose, where a mineral asset relates to, but does not actually consist of mineral deposits, the deposits to which the asset relates shall be treated as comprised in the asset. If, in a case where sub-paragraph (1) of paragraph 10 above applies, neither sub-paragraph (1) nor sub-paragraph (2) above has effect in relation to the expenditure referred to in sub-paragraph (1)(a) of that paragraph, then for the chargeable period related to the disposal or cessation referred to in sub-paragraph (1)(b) of that paragraph, any allowance in respect of that expenditure shall be a balancing allowance. In relation to pre-trading expenditure on machinery or plant and pre-trading exploration expenditure falling within paragraph 6(3) above, any allowance under paragraph 9 above shall be a balancing allowance. If in any chargeable period or its basis period a person who has incurred qualifying expenditure on mineral exploration and access (including pre-trading exploration expenditure falling within paragraph 6(2) above) gives up the search, exploration or inquiry to which the expenditure related and does not carry on then or subsequently a trade of mineral extraction which consists of or includes the working of any mineral deposits to which the mineral exploration and access related, any allowance to which he is entitled for that chargeable period under paragraph 9 above in respect of that expenditure shall be a balancing allowance. In any case where— then, without prejudice to sub-paragraph (1) above, any allowance to which he is entitled for that chargeable period under paragraph 9 above in respect of that expenditure shall be a balancing allowance. If in any chargeable period or its basis period any of the following events occurs in relation to assets representing any qualifying expenditure, namely— any allowance to which that person is entitled for that chargeable period under paragraph 9 above in respect of that expenditure shall be a balancing allowance.
For the purposes of this Part of this Schedule, where a person is carrying on a trade of mineral extraction, qualifying expenditure incurred by him in connection with that trade (whether before or after the trade began to be carried on) on mineral exploration and access shall be taken to be incurred for the purposes of the trade.
The net cost to a person of the demolition of an asset representing qualifying expenditure shall, for the purposes of this Part of this Schedule, be added to that qualifying expenditure in determining the amount of any balancing allowance or balancing charge for the chargeable period related to the demolition of the asset. The cost or net cost to a person of the demolition of any asset shall not, if sub-paragraph (1) applies to it, be treated for the purposes of this Schedule as expenditure incurred in respect of any other asset by which that asset is replaced. Any reference in this paragraph to the net cost of the demolition of any asset is a reference to the excess (if any) of the cost of the demolition over any moneys received for the remains of the asset.
All allowances and charges falling to be made under this Part of this Schedule to or on any person shall be made to or on him in taxing his trade of mineral extraction.
In so far as capital expenditure falling within paragraph 4(1)(b) above consists of expenditure on the acquisition of an interest in land (whether in the United Kingdom or elsewhere) and that land includes a source of mineral deposits, so much of that expenditure as is equal to the undeveloped market value of the interest shall not constitute qualifying expenditure. In relation to the acquisition of an interest in land, the undeveloped market value means the consideration which at the time of the acquisition the interest might reasonably be expected to fetch on a sale in the open market on the assumptions— In the application of sub-paragraph (2) above to the acquisition of an interest in land outside the United Kingdom.— In any case where— then at the time referred to in paragraph (c) above, the person who incurred the expenditure referred to in paragraph (a) above shall be treated as having incurred qualifying expenditure falling within paragraph 4(1 )(b) above equal to the unrelieved value of the buildings or structures referred to in paragraph (b) above. In sub-paragraph (4) above "the unrelieved value" of buildings or structures falling within paragraph (b) thereof means the value of those buildings or structures determined as at the date of the acquisition of the interest in land (and without regard to any value properly attributable to the land on which the buildings or structures stand) less the excess of any allowances over balancing charges which the person treated by sub-paragraph (4) above as incurring expenditure has received in respect of the buildings or structures or assets therein under— References in the preceding provisions of this paragraph to the time of the acquisition of an interest in land are not affected by paragraph 3 of this Schedule.
In any case where— the expenditure shall be treated for the purposes of this Schedule as reduced by so much of those deductions as would have been excluded by subsection (5) of the said section 134 if the person concerned had been entitled to an allowance under paragraph 9 above (or, as the case may be, section 60 of the Capital Allowances Act 1968) for the previous chargeable periods referred to in sub-paragraph (b) above.
a person incurs capital expenditure falling within paragraph 4(1 )(b) above on the acquisition of an asset which is or includes an interest in land, and
for chargeable periods previous to the chargeable period for which he first becomes entitled in respect of the expenditure to an allowance under paragraph 9 above, the person incurring the expenditure has been allowed, in respect of that land, any deductions under section 134 of the Taxes Act (deductions where premiums etc. taxable),
Where a disposal receipt to be brought into account in respect of any expenditure for a chargeable period would, apart from this paragraph, be the disposal value of an interest in land (determined as mentioned in paragraph 10 (3) above), only so much of that disposal value as exceeds the undeveloped market value of the interest shall constitute a disposal receipt for the purposes of Part III of this Schedule. Sub-paragraphs (2) and (3) of paragraph 16 above shall apply to determine the undeveloped market value of an interest for the purposes of this paragraph as they would apply in relation to an acquisition of that interest at the time the disposal value falls to be determined.
Subject to sub-paragraph (2) below, paragraph 20 below applies where a person carrying on a trade of mineral extraction (in this paragraph referred to as "the buyer") incurs capital expenditure in acquiring an asset (in this paragraph referred to as "the purchased asset") from another person in circumstances falling within sub-paragraph (3) below. This paragraph and paragraph 20 below have effect subject to paragraph 22 below, and neither this paragraph, paragraph 20 nor paragraph 22 below applies if— Subject to sub-paragraph (5) below, the circumstances referred to in sub-paragraph (1) above are— and, in a case where the purchased asset is a mineral asset situated in the United Kingdom, the reference in paragraph (b) above to a time prior to the buyer's acquisition does not include any time earlier than 1st April 1986. In this paragraph "the previous trader" means— and, subject to sub-paragraphs (5) and (6) below, any reference in paragraph 20 below to the previous trader's qualifying expenditure is a reference to so much of the expenditure incurred by him on the acquisition or bringing into existence of the purchased asset as constituted his qualifying expenditure for the purposes of this Schedule. Any reference in sub-paragraphs (3) and (4) above to the purchased asset includes a reference— Where the previous trader in fact incurred expenditure on the acquisition or bringing into existence of one or more assets from which the purchased asset is derived, so much of that expenditure as was qualifying expenditure of his for the purposes of this Schedule and as it is just and reasonable to attribute to the purchased asset shall be taken to be the previous trader's qualifying expenditure.
In this paragraph "the buyer's expenditure" means the capital expenditure incurred by him as mentioned in paragraph 19(1) above, less any amount of that expenditure which, by virtue of paragraph 16 above, does not constitute qualifying expenditure. If the previous trader did not become entitled to an allowance or liable to a balancing charge in respect of his qualifying expenditure, so much of the buyer's expenditure as does not exceed the amount of the previous trader's qualifying expenditure shall be the buyer's qualifying expenditure in respect of the acquisition of the purchased asset. If the previous trader became entitled to an allowance or liable to a balancing charge in respect of his qualifying expenditure, so much of the buyer's expenditure as does not exceed the residue of the previous trader's qualifying expenditure shall be the buyer's qualifying expenditure in respect of the acquisition of the purchased asset. In relation to the previous trader's qualifying expenditure, the residue referred to in sub-paragraph (3) above is that expenditure— For the purposes of sub-paragraph (4) above, where the previous trader's qualifying expenditure is an amount attributed to the purchased asset on a just and reasonable basis in accordance with paragraph 19(6) above, any allowances and any balancing charge made by reference to a greater amount of expenditure shall be apportioned on the like basis. In this paragraph—
This paragraph applies where, in a case falling within subparagraph (1) of paragraph 19 above.— Where this paragraph applies— In this paragraph "the previous trader" and "the purchased asset" have the same meaning as in paragraphs 19 and 20 above, and "the buyer's expenditure" has the same meaning as in paragraph 20 above.
Where a person carrying on a trade of mineral extraction (in this paragraph referred to as "the buyer") incurs capital expenditure falling within paragraph 4(1)(b) above in acquiring a Petroleum Act licence or any interest in such a licence, only so much of that expenditure as does not exceed the corresponding expenditure of the original licensee shall be the buyer's qualifying expenditure. In this paragraph a "Petroleum Act licence" means a licence under the Petroleum (Production) Act 1934 or the Petroleum (Production) Act (Northern Ireland) 1964 authorising the winning of oil, as denned in section 1 of the Oil Taxation Act 1975; and in relation to such a licence, "the original licensee" means the person to whom the licence was granted under the enactment in question. In relation to the acquisition of a Petroleum Act licence "the corresponding expenditure" of the original licensee is the amount of the payment made by him (whether before or after the passing of this Act) to the Secretary of State or, in Northern Ireland, to the Department of Economic Development for the purpose of obtaining the licence, and, in relation to an interest in such a licence, that corresponding expenditure is such portion of the amount of that payment as it is just and reasonable to attribute to that interest.
Subject to sub-paragraph (2) below, this paragraph applies where a company (in this paragraph referred to as "the transferee") acquires a mineral asset from another company (in this paragraph referred to as "the transferor") and either— This paragraph does not apply— but, subject to paragraph (a) above, this paragraph applies notwithstanding anything in paragraph 2 of the said Schedule 7. Subject to sub-paragraph (4) below, so much (if any) of the capital expenditure incurred by the transferee on the acquisition of the mineral asset as exceeds the capital expenditure incurred by the transferor on the acquisition of the mineral asset by him shall be left out of account for the purposes of this Schedule (and, accordingly, if the transferee is carrying on a trade of mineral extraction, shall not be qualifying expenditure). Where the mineral asset acquired by the transferee consists of an interest or right granted by the transferor in a mineral asset acquired by him, the reference in sub-paragraph (3) above to the capital expenditure incurred by the transferor on the acquisition of the mineral asset by him shall be construed as a reference to so much of that expenditure as, on a just apportionment, is referable to the interest or right granted by the transferor. If the transferee is carrying on a trade of mineral extraction and the expenditure incurred by him on the acquisition of the mineral asset is expenditure falling within paragraph 16 above, any reference in that paragraph to the time of the acquisition of the interest in land is a reference to the time it was acquired by the transferor or, if there is a sequence of two or more acquisitions each of which falls within subparagraph (1) above, the time at which the interest was acquired by the company which was the transferor under the earliest of those acquisitions. If, in a case where sub-paragraph (5) above applies, there is a sequence of two or more acquisitions each of which falls within subparagraph (1) above.—
Where a person incurs expenditure on mineral exploration and access and, without having carried on a trade of mineral extraction, he sells any assets representing that expenditure, then, if the person who acquires the assets carries on such a trade, only so much of the price paid by him for the assets as does not exceed the amount of the seller's expenditure which is represented by the assets shall be qualifying expenditure for the purposes of this Schedule.
In section 14(1) of the Capital Allowances Act 1968 after the words "of this Act" there shall be inserted "or Schedule 13 to the Finance Act 1986". In section 93 of that Act (scientific research: prevention of double allowances) at the end of subsection (1) there shall be inserted "and no allowance under Schedule 13 to the Finance Act 1986 shall be made in respect of any expenditure if it is expenditure in respect of which such a deduction may be allowed." In paragraph 4 of Schedule 7 to that Act (election as to sales where one party has control of the other) at the end of sub-paragraph (2) there shall be added—
In section 134 of the Taxes Act (deductions where premiums etc. are taxable) at the end of subsection (5) there shall be added the words "and the reference in this subsection to an allowance under section 60 of the Capital Allowances Act 1968 includes a reference to an allowance under Part III of Schedule 13 to the Finance Act 1986 in respect of expenditure falling within paragraph 4(1)(b) of that Schedule".
In section 174(8) of the Taxes Act for the words "Chapter III of Part I of the Capital Allowances Act 1968" there shall be substituted "Schedule 13 to the Finance Act 1986" and for the words "that Act" there shall be substituted "the Capital Allowances Act 1968".
In section 56 of the Finance Act 1985 (time when capital expenditure is incurred) at the end of subsection (1) and after the amendment made by section 57(10) of this Act there shall be added and.
Section 55.
In this Schedule— In relation to any item of old expenditure "outstanding balance" means, subject to the following provisions of this paragraph.— In determining the residue of expenditure mentioned in paragraph (a) of sub-paragraph (2) above, it shall be assumed that, in the chargeable period or its basis period referred to in that paragraph, no asset representing expenditure which is qualifying expenditure for the purposes of section 57 of the 1968 Act is sold, demolished or destroyed. In determining, in relation to the chargeable period referred to in paragraph (a) of sub-paragraph (2) above, the excess mentioned in paragraph (b) of that sub-paragraph—
This paragraph applies to expenditure— If the person incurring the expenditure so elects, expenditure to which this paragraph applies shall be treated for the purposes of the principal section and Schedule 13 to this Act as not being new expenditure and the old code of allowances shall continue to apply to it until 31st March 1987. An election under this paragraph— and if different parts of the expenditure are incurred at different times, only that part of the expenditure which is first incurred on or after 1st April 1986 shall be taken into account for the purposes of paragraph (b) above. In relation to expenditure to which an election under this paragraph applies—
If there is an outstanding balance in relation to any item of old expenditure, then, subject to the following provisions of this Schedule, for the purposes of the new code of allowances.— If any item of old expenditure was incurred for more than one purpose, then, so far as may be necessary for the application of the new code of allowances, the outstanding balance of that expenditure shall be apportioned to those different purposes in such manner as may be just and reasonable and sub-paragraph (1) above shall apply separately in relation to the apportioned parts as if they were referable to different items of old expenditure.
This paragraph applies to old expenditure— Where this paragraph applies, the new code of allowances shall have effect as if— and the provisions of the new code about disposal receipts shall have effect accordingly in relation to events happening on or after the relevant day.
This paragraph applies to old expenditure incurred on mineral exploration and access. If, immediately before the relevant day, no allowance had been made in respect of the expenditure under the old code of allowances, and on that day the mineral exploration and access at the source in connection with which the expenditure was incurred has not ceased, and either— then, subject to sub-paragraph (3) below, paragraph 5 or paragraph 6 of Schedule 13 to this Act or, as the case may be, subsection (5) of the principal section shall apply as if the expenditure were new expenditure and, if the expenditure was in fact incurred after the person concerned began to carry on a trade of mineral extraction, as if he had not begun to carry on that trade until the relevant day. Where sub-paragraph (2) above applies to any item of old expenditure which, apart from this sub-paragraph, would not fall to be treated as incurred on or after the relevant day, it shall (as new expenditure) be treated for the purposes of the new code of allowances as incurred on the relevant day.
This paragraph applies to old expenditure incurred on the acquisition of a mineral asset. If, immediately before the relevant day, no allowance has been made in respect of the expenditure under the old code of allowances, the expenditure shall be treated for the purposes of the new code of allowances as having been incurred on the relevant day. Nothing in sub-paragraph (2) above shall affect the time as at which, under paragraph 16 of Schedule 13 to this Act, the undeveloped market value of an interest is to be determined. If sub-paragraph (2) above does not apply in relation to an item of old expenditure to which this paragraph applies.—
This paragraph applies to old expenditure which does not fall within paragraph 5 above but which is incurred— If, immediately before the relevant day, no allowance has been made in respect of the expenditure under the old code of allowances, the expenditure shall be treated for the purposes of the new code of allowances as having been incurred on the relevant day.
In any case where— then, in determining the amount on which that charge falls to be made, sub-paragraph (2)(b) of the said paragraph 11 shall have effect as if it referred not only to allowances made as mentioned in sub-paragraph (1)(c) of that paragraph but also, subject to sub-paragraph (2) below, to allowances made in respect of the item of old expenditure under the old code of allowances. Where the qualifying expenditure in respect of which a balancing charge falls to be made represents part only of the outstanding balance of an item of old expenditure, the reference in sub-paragraph (1) above to allowances made in respect of that item shall be construed as a reference to such part of those allowances as it is just and reasonable to apportion to that part of the balance (having regard to the apportionment of the balance under paragraph 3(2) above).
Section 56.
If a person having a major interest in any agricultural or forestry land incurs any capital expenditure on the construction of farmhouses, farm or forestry buildings, cottages, fences or other works, then, during a writing-down period of twenty-five years beginning on the first day of the chargeable period related to the incurring of the expenditure, there shall be made to him, subject to the following provisions of this Schedule, writing-down allowances of an aggregate amount equal to that expenditure. In any case where— the expenditure shall be left out of account for the purposes of this Schedule and, accordingly, any writing-down allowance made in respect of the expenditure under sub-paragraph (1) above shall be withdrawn and all such assessments and adjustments of assessments shall be made as may be necessary to give effect to that withdrawal. In this Schedule a "major interest" in land means— If an interest in land is conveyed or assigned by way of security and subject to a right of redemption, then, so long as such a right subsists, the interest held by the creditor shall be treated for the purposes of this Schedule as held by the person having that right. Any reference in the following provisions of this Schedule to a writing-down allowance is a reference to an allowance under subparagraph (1) above.
No expenditure shall be taken into account for the purposes of this Schedule unless it is incurred for the purposes of husbandry or forestry on the agricultural or forestry land referred to in paragraph 1 above. Where capital expenditure is incurred on a farmhouse, one-third only of that expenditure shall be taken into account for the purposes of this Schedule or, if the accommodation and amenities of the farmhouse are out of due relation to the nature and extent of the farm, such proportion thereof not greater than one-third as may be just. Where capital expenditure is incurred on any asset other than a farmhouse and the asset is to serve partly the purposes of husbandry or forestry and partly other purposes, such apportionment of the expenditure shall be made for the purposes of this Schedule as may be just.
Subject to the provisions of this paragraph, in this Schedule "the relevant interest" means, in relation to any expenditure falling within paragraph 1(1) above, the major interest in the agricultural or forestry land concerned to which the person who incurred the expenditure was entitled when he incurred it. Where, when he incurs expenditure falling within paragraph 1(1) above, a person is entitled to two or more major interests in the agricultural or forestry land concerned, and one of those interests is an interest which is in reversion on all the others, that interest is the relevant interest for the purposes of this Schedule. A major interest shall not cease to be the relevant interest tor the purposes of this Schedule by reason of the creation of any lease (or other interest) to which the interest is subject; and where the relevant interest is a lease which is extinguished— then, unless a new lease of the land concerned is granted to take effect on the extinguishment of the former lease, the interest into which that lease merges shall thereupon become the relevant interest. In the application of this paragraph to Scotland "reversion" means the interest of a landlord in property subject to a lease.
In any case where— the former owner shall not be entitled to an allowance under this Schedule for any chargeable period of his after that related to the acquisition and the new owner shall be entitled to allowances under this Schedule for the chargeable period of his related to the acquisition and for subsequent chargeable periods falling within the writing-down period. If, in a case falling within sub-paragraph (1) above, the date of the acquisition occurs during a chargeable period of the former owner or its basis period, he shall be entitled only to an appropriate portion of an allowance for the chargeable period related to the acquisition and, similarly, if the date of the acquisition occurs during a chargeable period of the new owner or its basis period, he shall be entitled only to an appropriate portion of an allowance for the chargeable period (of his) related to the acquisition. Where the new owner acquires the relevant interest in part only of the land concerned, sub-paragraphs (1) and (2) above shall apply to so much only of the allowance as is properly referable to that part of the land as if it were a separate allowance. Where paragraph 3(3) above applies and the person who owns the interest into which the lease is merged is not the same as the person who owned the lease, the relevant interest shall be treated for the purposes of this Schedule as acquired by the owner of the interest into which the lease is merged. Where the relevant interest is a lease which comes to an end and paragraph 3(3) above does not apply, then, for the purposes of this Schedule.— If, by virtue only of the operation of the preceding provisions of this paragraph and, where appropriate, section 75(2) of the Capital Allowances Act 1968, the total allowances which, apart from this subparagraph, would fall to be made under this Schedule in respect of any expenditure during the writing-down period appropriate to it would be less than the amount of that expenditure, then, for the chargeable period in which that writing-down period ends, the allowance in respect of that expenditure shall be increased to such amount as will secure that the total of the allowances equals the amount of that expenditure. This paragraph has effect subject to the following provisions of this Schedule.
This paragraph applies where expenditure falling within paragraph 1(1) above is expenditure on the construction of a building, fence or other works and, before the building, fence or works comes to be used, the relevant interest is sold. Where this paragraph applies— The expenditure referred to in sub-paragraph (2)(c) above is whichever is the lesser of— Where the relevant interest is sold more than once in circumstances falling within sub-paragraph (1) above, sub-paragraphs (2)(c) and (3) above shall have effect only in relation to the last of those sales.
If, in respect of any expenditure falling within paragraph 1(1) above, a balancing event occurs in a chargeable period or its basis period and, apart from this paragraph, a person would be entitled to a writing-down allowance in respect of that expenditure for the chargeable period related to that event, no such allowance shall be made but an allowance or charge (in this paragraph referred to as a "balancing allowance" or a "balancing charge") shall, in the circumstances mentioned below, be made for that period to or, as the case may be, on the person entitled to the relevant interest immediately before that event occurs. In relation to any expenditure, the amount of any balancing allowance or charge shall be determined in accordance with the following provisions of this paragraph by reference to— If, by virtue of sub-paragraph (2) or sub-paragraph (3) of paragraph 2 above only a portion of any expenditure falls to be taken into account for the purposes of this Schedule, any reference in the following provisions of this paragraph to sale, insurance, salvage or compensation moneys is a reference only to the like portion of those moneys. Where there are no sale, insurance, salvage or compensation moneys or where the residue of the expenditure immediately before the balancing event exceeds those moneys, a balancing allowance shall be made of an amount equal to that residue or, as the case may be, to the excess of it over those moneys. If the sale, insurance, salvage or compensation moneys exceed the residue of the expenditure immediately before the event, a balancing charge shall be made on an amount equal to that excess. Notwithstanding anything in sub-paragraph (5) above, in no case shall the amount on which a balancing charge is made on any person exceed the amount of the writing-down allowances made to him in respect of that expenditure before the balancing event. If a balancing event relates to— the preceding provisions of this paragraph shall apply to so much of the expenditure as is properly attributable to the part of the land, building, fence or other works concerned, as if it were an item of expenditure separate from the rest. This paragraph has effect subject to paragraph 9 below.
Subject to sub-paragraph (2) below, in relation to expenditure (in this paragraph referred to as "the original expenditure") for which, apart from paragraph 6 above, a person (in this paragraph referred to as "the former owner") would be entitled to a writing-down allowance, the following events are balancing events for the purposes of this Schedule— An event falling within sub-paragraph (1) above is not a balancing event for the purposes of this Schedule unless an election is made with respect to that event by notice in writing given to the inspector not more than two years after the end of the chargeable period related to the occurrence of the event. Where, during the writing-down period applicable to the original expenditure, a balancing event falling within sub-paragraph (1)(a) above occurs, the amount of any writing-down allowances to which the new owner is entitled for chargeable periods which, or the basis periods for which, end after the balancing event shall be determined as if— Subject to sub-paragraph (5) below, an election under this paragraph shall be made as follows— No election may be made under this paragraph if any person by whom that election should be made is not within the charge to tax in the United Kingdom; and no election may be made in relation to an acquisition falling within sub-paragraph (1)(a) above if it appears with respect to that acquisition, or with respect to transactions of which that acquisition is one, that the sole or main benefit which (apart from Schedule 7 to the Capital Allowances Act 1968) might have been expected to accrue to the parties or any of them was the obtaining of an allowance, or a greater allowance, under this Schedule.
Any reference in this Schedule to expenditure incurred on the construction of a building does not include any expenditure incurred on the acquisition of, or of rights in or over, any land. Without prejudice to any provision of Part I of the Capital Allowances Act 1968 relating to the apportionment of sale, insurance, salvage or compensation moneys, the sum paid on the sale of the relevant interest in a building, fence or other works or any other sale, insurance, salvage or compensation moneys payable in respect of any building, fence or other works shall, for the purposes of this Schedule, be deemed to be reduced by an amount equal to so much thereof as, on a just apportionment, is attributable to assets representing expenditure other than expenditure in respect of which an allowance can be made under this Schedule.
In its application in relation to any sale which is material for the purposes of this Schedule, Schedule 7 to the Capital Allowances Act 1968 (transactions between connected persons etc.) shall have effect with the omission— For the purposes of this Schedule and the provisions of the Capital Allowances Act 1968 which are relevant to this Schedule, any transfer of the relevant interest (in relation to any expenditure falling within paragraph 1(1) above) otherwise than by way of sale shall be treated as a sale of the interest for a price other than that which it would have fetched if sold on the open market. If Schedule 7 to the Capital Allowances Act 1968 would not, apart from this sub-paragraph, have effect in relation to a transfer treated as a sale by virtue of sub-paragraph (2) above, that Schedule shall have effect in relation to it as if it were a sale falling within paragraph 1(1 )(a) of that Schedule.
This paragraph has effect where— For the purposes of paragraph 6 above the net proceeds to the former owner of the sale— but the net proceeds of sale shall not by virtue of this sub-paragraph be taken to be greater than such amount as will secure that no balancing allowance falls to be made. Where sub-paragraph (2) above operates, in relation to a sale, to deny or reduce a balancing allowance in respect of any expenditure, paragraph 7(3) above shall have effect as if that balancing allowance had been made or, as the case may be, had not been reduced. In this paragraph— Where the terms on which a subordinate interest is granted are varied before the sale of the relevant interest, any capital consideration for the variation shall be treated for the purposes of this paragraph as a premium for the grant of the interest, and the question whether any and, if so, what rent is payable in respect of the interest shall be determined by reference to the terms as in force immediately before the sale.
Except as provided below, any allowance or charge made to or on any person under this Schedule shall be made to or on him in taxing his trade; and any reference in the following provisions of this paragraph to an allowance or charge of any description is a reference to an allowance or charge under this Schedule. Any allowance which falls to be made to a person for a chargeable period in which he is not carrying on a trade shall be made by way of discharge or repayment of tax. Any allowance which, under this paragraph, is to be made by way of discharge or repayment of tax shall be available primarily against agricultural income and forestry income and income which is the subject of a balancing charge. Effect shall be given to a balancing charge to be made on a person for a chargeable period in which he is not carrying on a trade.—
Section 57.
In section 64, subsection (1) (exclusion of first-year allowances etc.) shall be omitted. In subsection (2)(a) of that section— In subsection (6A) of that section for the words "first-year allowance" there shall be substituted "writing-down allowance of an amount determined without regard to section 70(2) of the Finance Act 1982". In subsection (8) of that section (the requisite period) at the beginning there shall be inserted "subject to subsection (8A) below" and for the word "four", in each place where it occurs, there shall be substituted "ten". After subsection (8) of that section there shall be inserted the following subsection—. Subsection (10) of that section shall be omitted. In subsection (11) of that section—
In section 65 (writing-down allowances etc. in case of leased assets) in subsection (1) for the words from the beginning to "leasing" there shall be substituted "Where section 70 of the Finance Act 1982 applies to expenditure on the provision of machinery or plant for leasing". In subsection (6) of that section the words from the beginning to "1971; but" shall be omitted and for the words "that Schedule" there shall be substituted "Schedule 8 to the Finance Act 1971".
Sections 66 and 67 shall be omitted.
In section 68 (joint lessees), at the end of subsection (1) there shall be added "and— In subsection (2) of that section— In subsection (3) of that section— Subsections (4) to (8) of that section shall be omitted.
In section 70, in subsection (1) (application of section to foreign leasing which is not short-term leasing) for the words "not short-term leasing" there shall be substituted "neither short-term leasing nor the leasing of a ship, aircraft or transport container which is used for a qualifying purpose by virtue of subsections (5) to (7) of section 64 of the Finance Act 1980". In subsection (2)(a) of that section (reference to section 65 of the Finance Act 1980) for the words in parenthesis there shall be substituted "(as amended by Part I of Schedule 16 to the Finance Act 1986)". Subsection (3) of that section shall be omitted. In subsection (4) of that section.— In subsection (5) of that section— For subsection (6) of that section there shall be substituted the following subsection— In subsection (7) of that section after the words "Finance Act 1980" there shall be inserted "(as amended by Part I of Schedule 16 to the Finance Act 1986)". In subsection (9) of that section.—
In Schedule 11, paragraphs 3, 5 and 6 shall be omitted.
In this Part of this Schedule— and other expressions have the same meaning as in the principal section. Where new expenditure has been incurred by any person, any reference in this Part of this Schedule to the new expenditure having qualified for a normal writing-down allowance is a reference to the expenditure having fallen to be included, in whole or in part, in that person's qualifying expenditure for any chargeable period for the purposes of subsections (2), (2A) and (3) of section 44 of the Finance Act 1971, as that section has effect with respect to expenditure which does not fall within subsection (1) of the principal section.
Where new expenditure incurred by any person in providing machinery or plant has qualified for a normal writing-down allowance and the machinery or plant is at any time in the requisite period used for the purpose of being leased to a non-resident, otherwise than by permitted leasing.— The excess relief is the excess, if any, of— The unused expenditure is the amount by which the new expenditure incurred in providing the machinery or plant exceeds the allowances referred to in sub-paragraph (2)(a) above. For the purposes of sub-paragraph (2) above, the normal writing-down allowances that were made in respect of new expenditure on any item of machinery or plant shall be determined as if that item were the only item of machinery or plant in relation to which the said section 44 had effect. Where the person to whom any machinery or plant belongs at a time when it is first used for the purpose of being leased to a nonresident, otherwise than by permitted leasing, has acquired it as a result of a transaction which was, or a series of transactions each of which was, between connected persons and a normal writing-down allowance in respect of expenditure on the provision of the machinery or plant has been made to any of those persons— but this sub-paragraph does not apply where section 154(2), section 155(1) or section 252(2) of the Taxes Act or sub-paragraphs (a) and (b) of paragraph 13 of Schedule 8 to the Finance Act 1971 (succession to trades), applied on the occasion of the transaction or transactions in question. Where the person to whom any machinery or plant belongs at such a time as is mentioned in sub-paragraph (5) above acquired it as there mentioned and— this paragraph shall with the necessary modifications apply as it applies where a normal writing-down allowance has been made. If at any time in the requisite period a ship is used for the purpose of being leased to a non-resident, otherwise than by permitted leasing, then, without prejudice to the other provisions of this paragraph.— Section 533 of the Taxes Act (connected persons) applies for the purposes of this paragraph.
Without prejudice to the operation of paragraph 8 above, the provisions of this paragraph have effect where new expenditure is incurred on the provision of machinery or plant which is leased as mentioned in subsection (1) of section 68 of the Finance Act 1980, and any reference in the following provisions of this paragraph to section 68 is a reference to that section. Where, by virtue of subsection (2) of section 68, the whole or part of the new expenditure has qualified for a normal writing-down allowance and, at any time in the requisite period while it is leased as mentioned in that subsection— paragraph 8 above and paragraph 10(2) below shall have effect as if the separate item of machinery or plant referred to in subsection (3)(a) of section 68 had at that time begun to be used for the purpose of being leased to a non-resident, otherwise than by permitted leasing. Where the whole or part of any new expenditure has qualified for a normal writing-down allowance and the machinery or plant is subsequently leased in the requisite period as mentioned in subsection (1) of section 68, sub-paragraph (2) above shall apply as if the whole of the expenditure had qualified for a normal writing-down allowance by virtue only of subsection (2) of that section. Where, by virtue of subsection (2) of section 68, the whole or part of the new expenditure has qualified for a normal writing-down allowance and, at the end of the requisite period, the machinery or plant in question is leased as mentioned in subsection (1) of that section but sub-paragraph (2) above has not had effect, then, if it appears that the extent to which the machinery or plant has been used for the purposes of such a trade or trades as are referred to in that subparagraph is less than that which was taken into account in determining the amount of the new expenditure which qualified for a normal writing-down allowance.—
Where new expenditure is incurred on the provision of machinery or plant and, before the expenditure has qualified for a normal writing-down allowance, it is used for leasing to a non-resident and that leasing is permitted leasing, a claim by a person other than a company for a writing-down allowance which takes account of that expenditure and a return by a company of profits in the computation of which a deduction is made on account of such an allowance shall be accompanied by a certificate to that effect, setting out the description of permitted leasing. If, after any new expenditure has qualified for a normal writing-down allowance, the machinery or plant in question is at any time in the requisite period used for the purpose of being leased to a nonresident, otherwise than by permitted leasing, the person to whom it belongs at that time shall give written notice of that fact to the inspector. Subject to sub-paragraph (6) below, notice under sub-paragraph (2) above shall be given within three months after the end of the chargeable period or its basis period in which the machinery or plant is first used for leasing as mentioned in that sub-paragraph. A certificate or notice given by any person under sub-paragraph (1) or sub-paragraph (2) above by reference to any chargeable period or its basis period shall specify the non-resident to whom the machinery or plant has been leased and shall specify all the items of machinery or plant (if more than one) in respect of which the person in question is required to give a certificate or notice under this paragraph by reference to that period. Subject to sub-paragraph (6) below, where new expenditure is incurred on the provision of machinery or plant which is leased as mentioned in section 68(1) of the Finance Act 1980, the lessor shall, within three months after the end of the chargeable period or its basis period in which the machinery or plant is first so leased, give written notice to the inspector specifying— If, at the end of the three months referred to in sub-paragraph (3) or sub-paragraph (5) above, the person required to give a notice under that sub-paragraph does not know and cannot reasonably be expected to know that any item of machinery or plant in respect of which he is required to give such a notice has been used or leased as mentioned in the sub-paragraph in question, he shall in respect of that item give the notice within thirty days of his coming to know that it has been so used or leased. Paragraph 10 of Schedule 16 to the Finance Act 1986
any mechanically propelled vehicle other than—
Section 62.
Sub-paragraph (1) above does not apply where the annual profits or gains are treated as received by the investment manager of a common investment fund for the time being designated as mentioned in section 413(1) of the Taxes Act (funds in court). Where the income or part of the income derived in a year of assessment from such a common investment fund or its investments consists of interest on securities, the income or part (as the case may be) shall for the purposes of section 413(1)(a) of the Taxes Act be calculated by treating it as the amount it would be apart from section 74(5) of this Act, but reduced by an amount (if any) equal to the excess of A over B. In sub-paragraph (5) above— A is the total amount of allowances to which, by virtue of section 74(4) of this Act, the investment manager of the fund is entitled in the year of assessment in respect of all securities comprised in the fund, and B is the total amount of annual profits or gains which, by virtue of section 74(2) of this Act, he is treated as receiving in the year of assessment in respect of those securities. Paragraph 8 shall be treated as having been enacted with subparagraphs (4) to (6).
Paragraph 15 of that Schedule (transfer of unrealised interest) shall be amended as follows. Section 75 of this Act applies for the purposes of this paragraph as if in subsection (1) the reference to section 73(2)(a) or (3)(a) were to sub-paragraph (2) or (3) above and references to the year of assessment in which the interest period ends were to the year in which the settlement day falls, and as if in subsection (2) the reference to section 73(2)(b) or (3)(b) were to sub-paragraph (4) above. After sub-paragraph (7) there shall be inserted— This paragraph applies where securities are transferred after 18th March 1986.
The following shall be inserted after paragraph 15 of that Schedule— In consequence of sub-paragraph (1) above, in paragraph 4(4) of that Schedule after "14" there shall be inserted ", 15A(8)". The reference in paragraph 15A(6) to a time of transfer is to a time falling after 18th March 1986; and sub-paragraph (2) above applies accordingly. Paragraphs 15B and 15C apply where securities are transferred after 18th March 1986.
The following shall be inserted after paragraph 32 of that Schedule— Paragraph 32A applies where securities are transferred after 18th March 1986. Paragraph 32B applies where interest falls due after 18th March 1986.
In paragraph 43 of that Schedule (manufactured dividends) for paragraph (c) of sub-paragraph (1) there shall be substituted— In sub-paragraphs (2) and (3) of paragraph 43 after the word "contract" (in each place) there shall be inserted the words "mentioned in sub-paragraph (1)(b) above". This paragraph applies where the contract in relation to which the seller is the dividend manufacturer is made after 18th March 1986.
In paragraph 44 of that Schedule (information) in subparagraph (2) for the word "jobber" there shall be substituted the words "market maker". In this paragraph "market maker", in relation to securities, means a person who— Sub-paragraphs (1) and (2) above apply in relation to transactions on or after the day of The Stock Exchange reforms. The Board may by regulations provide that— In sub-paragraph (4) above "recognised investment exchange" means a recognised investment exchange within the meaning of the Financial Services Act 1986. Regulations under sub-paragraph (4) above shall apply in relation to transactions effected on or after such day, after the day of The Stock Exchange reforms, as is specified in the regulations. The power to make regulations under sub-paragraph (4) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons. In this paragraph "the day of The Stock Exchange reforms" means the day on which the rule of The Stock Exchange that prohibits a person from carrying on business as both a broker and a jobber is abolished.
Section 63.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
In section 471 of the Taxes Act (purchase and sale of securities) the following shall be substituted for subsection (6)(c)— Sub-paragraph (1) above applies where the first buyer purchases after 18th March 1986; and section 475(6) of the Taxes Act and paragraph 42 of Schedule 23 to the Finance Act 1985 shall cease to have effect where the first buyer purchases after that date.
In section 472 of the Taxes Act (dealers in securities) the following shall be substituted for subsection (2)— At the end of that section there shall be inserted— This paragraph applies where the subsequent sale is carried out by the first buyer on or after the day of The Stock Exchange reforms.
The Board may by regulations provide for all or any of the following— The regulations shall apply where the subsequent sale is carried out by the first buyer on or after such day, after the day of The Stock Exchange reforms, as is specified in the regulations.
Section 477 of the Taxes Act (manufactured dividends) shall be amended as follows— Sub-paragraph (1) above applies where the contract for the sale of securities is made after 18th March 1986.
Section 477 of the Taxes Act shall also be amended as provided by this paragraph. In subsection (3) for the word "jobber" (in the first place where it occurs) there shall be substituted the words "market maker" and for the word "jobber" (in the second place where it occurs) there shall be substituted the words "market maker in securities of the kind concerned". In subsection (6) the following shall be substituted for the definitions of "broker" and "jobber"—. Sub-paragraphs (2) and (3) above apply where the contract for the sale of securities is made on or after the day of The Stock Exchange reforms. The Board may by regulations provide that section 477(6) (as amended by sub-paragraph (3) above) shall have effect- Regulations under sub-paragraph (5) above shall apply where the contract for the sale of securities is made on or after such day, after the day of The Stock Exchange reforms, as is specified in the regulations.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
In section 25 of the Taxes Management Act 1970 (information: chargeable gains) in subsection (4) for the word “jobber” there shall be substituted the words “market maker”. At the end of section 25 there shall be inserted— Sub-paragraphs (1) and (2) above apply in relation to transactions on or after the day of The Stock Exchange reforms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
In this Schedule “the day of The Stock Exchange reforms” means the day on which the rule of The Stock Exchange that prohibits a person from carrying on business as both a broker and a jobber is abolished. In this Schedule “recognised investment exchange” means a recognised investment exchange within the meaning of the Financial Services Act 1986. Any power to make regulations under this Schedule shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.
Section 101.
After section there shall be inserted the following section—
In section 7 (rates of tax), in subsection (1)— For subsection (2) of that section there shall be substituted the following subsection— In subsection (3) of that section for the words “each of the Tables” there shall be substituted “ Table ”. After subsection (3) of that section there shall be inserted the following subsections—
In section 8 (indexation) in subsection (1) for the words “new Tables for the Tables” there shall be substituted “ a new Table for the Table ”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . In subsection (2) of that section for the word “Tables”, in each place where it occurs, there shall be substituted “ Table ” and for the words “they replace” there shall be substituted “ it replaces ”. In subsection (4) of that section, for the word “Tables” there shall be substituted “ Table ”.
In section 9 (transitional provisions on reduction of tax) for the words “new Tables” there shall be substituted “ a new Table ”.
In section 19 (annual exemption), after subsection (3) there shall be inserted the following subsection—
After section 26 there shall be inserted the following section—
In section 30 (conditionally exempt transfers) after subsection (3) there shall be inserted the following subsections—
In section 31 (designation and undertakings) after subsection (1) there shall be inserted the following subsection— After subsection (4F) of that section there shall be inserted the following subsection—
In section 32 (chargeable events) in subsection (1) after the words “after the transfer” there shall be inserted “ (or, if the transfer was a potentially exempt transfer, after the death of the transferor) ”.
In section 32A (associated properties) in subsection (2) after the words “after the transfer” there shall be inserted “ (or, if the transfer was a potentially exempt transfer, after the death of the transferor) ”.
In section 33 (amount of the charge in relation to conditionally exempt transfers) in subsection (1)(b)— For subsection (2) of that section there shall be substituted the following subsections—. In subsection (7) of that section at the beginning there shall be inserted the words “ Subject to subsection (8) below ”. After that subsection there shall be added the following subsection—
In section 35 (conditional exemption on death before 7th April 1976) in subsection (3) for the words “section 33(7) above, the reference” there shall be substituted “ section 33(7) and (8) above, references ”, and for the words “includes a reference” there shall be substituted “ include references ”.
In section 38 (attribution of value to specific gifts) in subsection (6) after the words “section 5(5) above” there shall be inserted “ or by virtue of section 103 of the Finance Act 1986 ” and at the end of that subsection there shall be added “ and, to the extent that any liability of the transferor is abated under the said section 103, that liability shall be treated as a specific gift ”.
At the end of section 49 (treatment of interests in possession) there shall be added the following subsection— For text see IHTA 1984 s. 49(3).
In section 55 (reversionary interst acquired by beneficiary) at the end of subsection (2) there shall be added “and such a dispostition is not a potentially exempt transfer”.
In section 66 (rate of ten-yearly charge) in subsection (3)(b) for the words “preceding ten years” there shall be substituted “ preceding seven years ”. For paragraph (c) of subsection (3) of that section there shall be substituted—. In subsection (5)(a) of that section for the word “ten” there shall be substituted “ seven ”.
In section 67 (added property etc.) in subsections (3)(b) and (4) for the word “ten” there shall be substituted “ seven ”.
In section 68 (rate before first-year anniversary) in subsection (4)(b) for the word “ten”, in both places where it occurs, there shall be substituted “ seven ”. For paragraph (c) of subsection (4) and for paragraph (c) of subsection (6) of that section there shall be substituted—. In subsection (6)(b) of that section—
In section 78 (conditionally exempt occasions) in subsection (4) for the words from “and the appropriate Table” to the end there shall be substituted “ and the appropriate provision of section 7 for the purposes of section 33(1)(b)(ii) is, if the settlement was created on his death, subsection (1) and, if not, subsection (2). ” In subsection (5) of that section, in the substituted sub-paragraph (ii) for section 33(1)(b), for the words “under the appropriate Table” there shall be substituted “ in accordance with the appropriate provision of section 7 above. ”
At the end of section 98 (effect of alteration of capital of close company etc.) there shall be added the following subsection—
After section 113 there shall be inserted the following sections—
After section 124 there shall be inserted the following sections—
In section 131 (relief in respect of additional tax payable on transfers within three years of death), in subsection (1) for the words from “(by virtue” to “transfer and” there shall be substituted “ because of the transferor’s death within seven years of the transfer, tax becomes chargeable in respect of the value transferred by a potentially exempt transfer or (by virtue of section 7(4) above) additional tax becomes chargeable in respect of the value transferred by any other chargeable transfer and (in either case) ”. In subsection (2) of that section for the words “additional tax” in each place where they occur, there shall be substituted “ the tax or, as the case may be, additional tax ”. After that subsection there shall be inserted the following subsection—
In section 142 (alteration of dispositions taking effect on death) at the end of subsection (5) there shall be added “ or section 102 of the Finance Act 1986 ”.
Sections 148 and 149 (exemptions for mutual transfers) shall not apply if the donee’s transfer (as defined in section 148) is made on or after 18th March 1986.
In section 199 (liability for tax etc. on dispositions by transferor) for subsection (2) there shall be substituted the following subsection—
In section 201 (liability for tax in respect of settled property), in subsection (2) for the words “three years”, in each place where they occur, there shall be substituted “ seven years ”.
In section 204 (limitation of liability), subsection (4) shall be omitted. In subsection (6)(a) of that section, after the word “transferor” there shall be inserted “ or personal representative of the transferor ”. For subsection (7) of that section there shall be substituted the following subsections—
In section 216 (delivery of accounts) in subsection (1) after paragraph (b) there shall be inserted the following paragraphs— In subsection (3) of that section after the words “his death” there shall be inserted “ other than property which would not, apart from section 102(3) of the Finance Act 1986, form part of his estate ”. In subsection (6) of that section after paragraph (a) there shall be inserted the following paragraphs—.
In section 226 (payment: general rules), in subsection (3) for the words “three years”, in each place where they occur, there shall be substituted “ seven years ”. After subsection (3) of that subsection there shall be inserted the following subsections—
In section 227 (payment by instalments) after subsection (1) there shall be inserted the following subsections— In subsection (5) of that section after the words “subsection (1)(b) above” there shall be inserted “ other than a case within subsection (1A) above where the transferee dies before the transferor ”.
In section 233 (interest on unpaid tax) in subsection (2) for paragraphs (a) and (b) there shall be substituted— For substitution see IHTA 1985 s. 233(2)(a) and (b)
In section 236 (application of section 233 in special cases etc.), in subsection (1)(a), for the words “three years”, in each place where they occur, there shall be substituted “ seven years ”. After subsection (1) of that section there shall be inserted the following subsection—
In section 237 (imposition of charge) after subsection (3) there shall be inserted the following subsection—
In section 239 (certificates of discharge) after subsection (2) there shallbe inserted the following subsection—
For Schedule 1 (rates of tax) there shall be substituted—
In Schedule 2 (provisions applying on reduction of tax),— In paragraph (1)(b) of that Schedule for the word “come” there shall be substituted “ comes ”. After paragraph 1 of that Schedule there shall be inserted the following paragraph— In paragraph 2 of that Schedule,— In paragraph 3 of that Schedule, the words “the second of” shall be omitted. In paragraph 4 of that Schedule, the words “the first of” shall be omitted.
In Schedule 4 (maintenance funds for historic buildings etc.) in paragraph 14 (rates of charge) in sub-paragraphs (1) to (3), for the words “under the appropriate Table”, wherever occurring, there shall be substituted “ in accordance with the appropriate provision of section 7 of this Act ”. After sub-paragraph (1) of that paragraph there shall be inserted the following sub-paragraph— In sub-paragraph (6) of that paragraph for the words “ten years” there shall be substituted “ seven years ”. For sub-paragraph (9) of that paragraph there shall be substituted the following sub-paragraph—
In Schedule 6 (transition from estate duty) in paragraph 4(3) after the words “sections 33(7)” there shall be inserted the words “ and (8). ”
Notwithstanding that Part of this Schedule has effect with respect to events occurring on or after 18th March 1986, where a death or other event occurs on or after that date, nothing in that Part shall affect the tax chargeable on a transfer of value occurring before that date. Sub-paragraph (1) above does not authorise the making of a claim under section 149 of the 1984 Act where the donee’s transfer, as defined in section 148 of that Act, occurs on or after 18th March 1986.
Where tax is chargeable under section 32 or section 32A of the 1984 Act by reason of a chargeable event occurring on or after 18th March 1986 and the rate or rates at which it is charged fall to be determined under the provisions of section 33(1)(b)(ii) of the 1984 Act by reference to a death which occurred before that date, those provisions shall apply (subject to paragraph 5 of Schedule 2 to that Act) as if the amendments of section 7 of, and Schedule 1 to, that Act contained in Part I of this Schedule had been in force at the time of the death.
Where tax is chargeable under paragraph 8 of Schedule 4 to the 1984 Act on any occasion on or after 18th March 1986 and the rate at which it is charged falls to be determined under paragraph 14 of that Schedule by reference to a death which occurred before that date, that paragraph shall apply (subject to paragraph 6 of Schedule 2 to the 1984 Act) as if the amendments of section 7 of, and Schedule 2 to, the 1984 Act contained in Part I of this Schedule had been in force at the time of the death.
This paragraph applies if, in the case of a settlement,— For the purpose of determining the rate at which tax is charged on the occasion referred to in sub-paragraph (1)(a) above, it shall be assumed that the last ten-year rate was what that rate would have been if, immediately before the ten-year anniversary referred to in sub-paragraph (1)(c) above, the amendments of sections 66 and 67 of the 1984 Act contained in Part I of this Schedule had been in force. Where this paragraph applies, paragraph 3 of Schedule 2 to the 1984 Act shall have effect as if— In this paragraph “ten-year anniversary” has the same meannig as in Chapter III of Part III of the 1984 Act.
In relation to a death on or after 18th March 1986, paragraph 2 of Schedule 2 to the 1984 Act (provisions applying on reduction of tax) shall have effect, in a case where the chargeable transfer in question was made before 18th March 1986, as if—
references to a reduction included references to a reduction by the substitution of a new Table in Schedule 1 to the 1984 Act; and
the Tble in Schedule 1 to the Act was the first Table in that Schedule.
In relation to a disposal of trees or underwood on or after 18th March 1986, paragraph 4 of Schedule 2 to the 1984 Act shall have effect, in a case where the death in question occurred before 18th March 1986, as mentioned in paragraphs (a) and (b) of paragraph 44 above.
Notwithstanding anything in section 3A of the 1984 Act, a transfer of value which is made on or after 1st July 1986 and which, by virtue of subsection (4) of section 49 of the Finance Act 1975 (transitional provision relating to estate duty deferment in respect of timber etc.), brings to an end of the period during which estate duty is payable on the net moneys received from the sale of timber etc. is not a potentially exempt transfer to the extent that the value transferred is attributable to the land concerned.
Section 102.
In this Schedule— Any reference in this Schedule to a disposal by way of gift is a reference to such a disposal which is made on or after 18th March 1986. This Schedule has effect for the purposes of the principal section and the 1984 Act.
Where the disposal by way of gift and, at any time before the material date, the donee ceases to have possession and enjoyment of any of the property comprised in the gift, then on and after that time the principal section and the following provisions of this Schedule shall apply as if the property, if any, received by the donee in substitution for that property had been comprised in the gift instead of that property (but in addition to any other property comprised in the gift). This paragraph does not apply if the property disposed of by the gift— In sub-paragraph (1) above the reference to the property received by the donee in substitution for property comprised in the gift includes in particular— Where, at a time before the material date, the donee makes a gift of property comprised in the gift to him, or otherwise voluntarily divests himself of such property otherwise than for a consideration in money or money’s worth not less than the value of the property at that time, then, unless he does so in favour of the donor, he shall be treated for the purposes of the principal section and sub-paragraph (1) above as continuing to have possession and enjoyment of that property. For the purposes of sub-paragraph (4) above— Where any shares in or debentures of a body corporate are comprised in a gift and the donee is, as the holder if those shares or debentures, issued with shares in or debentures of the same or any corporate, or granted any right to acquire any such shares or debentures, then, unless the issue or grant is made by way of exchange for the first-mentioned shares or debentures, the shares or debentures so issued, or the right granted, shall be treated for the purposes of the principal section and this Schedule as having been comprised in the gift in addition to any other property so comprised. In sub-paragraph (6) above the reference to an issue being made or right being granted to the donee as the holder of shares or debentures shall be taken to include any case in which an issue or grant is made to him as having been the holder of those shares or debentures, or is made to him in pursuance of an offer or invitation made to him as being or having been the holder of those shares or debentures, or of an offer or invitation in connection with which any preference is given to him as being or having been the holder thereof.
Where either sub-paragraph (3)(c) or sub-paragraph (6) of paragraph 2 above applies to determine, for the purposes of the principal section, the property comprised in a gift made by the donor— For the purposes of sub-paragraph (1) above, there shall be left out of account so much (if any) of the consideration for any shares in debentures of a body corporate, or for the grant of any right to be issued with any shares or debentures, as consists in the capitalisation of reserves of that body corporate, or in the retention by that body corporate, by way of set-off or otherwise, of any property distributable by it, or is otherwise provided directly or indirectly out of the assets or at the expenses of that or any associated body corporate. For the purposes of sub-paragraph (2) above, two bodies corporate shall be deemed to be associated as if one has control of the other or if another person has control of both.
Where there is a disposal by way of gift and the donee dies before the date which is the material date in relation to any property comprised in the gift, paragraphs 2 and 3 above shall apply as if—
he had not dies and the acts of his personal representatives were his acts; and
property taken by another person under his testamentary dispositions or his intestacy (or partial intestacy) were taken under a gift made by him at the time of his death.
This paragraph applies where— Paragraphs 2 to 4 above shall not apply but, subject to the following provisions of this paragraph, the principal section and the following provisions of this Schedule shall apply as if the property comprised in the gift consisted of the property comprised in the settlement on the material date, except in so far as that property neither is, nor represents, nor is derived from, property originally comprised in the gift. Any property which— shall be treated for the purposes of sub-paragraph (2) above as derived from property originally comprised in the gift. If the settlement comes to an end at some time before the material date as respects all or any of the property which, if D had died immediately before that time, would be treated as comprised in the gift,— shall be treated as comprised in the gift (in addition to any other property so comprised). Where, under any trust or power relating to settled property, income arising from that property after the material date is accumulated, the accumulations shall not be treated for the purposes of sub-paragraph (2) above as derived from that property.
Where there is a disposal by way of gift and the property comprised in the gift becomes settled property by virtue of the gift, paragraphs 2 to 4 above shall not apply but, subject to the following provisions of this paragraph, the principal section and the following provisions of this Schedule shall apply as if the property comprised in the gift consisted of the property comprised in the settlement on the material date, except in so far as that property neither is, not represents, nor is derived from, property originally comprised in the gift. If the settlement comes to an end at some time before the material date as respects all or any of the property which, if the donor had dies immediately before that time, would be treated as comprised in the gift,— shall be treated as comprised in the gift (in addition to any other property so comprised). Where property comprised in a gift does not become settled property by virtue of the gift, but is before the material date settled by the donee, sub-paragraphs (1) and (2) above shall apply in relation to property comprised in the settlement as if the settlement had been made by the gift; and for this purpose property which becomes settled property under any testamentary disposition of the donee or on his intestacy (or partial intestacy) shall be treated as settled by him. Where property comprised in a gift becomes settled property either by virtue of the gift or as mentioned in sub-paragraph (3) above, any property which— shall be treated for the purposes of sub-paragraph (1) above as derived from property originally comprised in the gift. Where, under any trust or power relating to settled property, income arising from that property after the material date is accumulated, the accumulations shall not be treated for the purposes of sub-paragraph (1) above as derived from that property.
In determining whether any property which is disposed of by way of gift is enjoyed to the entire exclusion, or virtually to the entire exclusion, of the donor and of any benefit to him by contract or otherwise— Any question whether any property comprised in a gift was at any time enjoyed to the entire exclusion, or virtually to the entire exclusion, of the donor and of the benefit to him shall (so far as that question depends upon the identity of the property) be determind by reference to the property which is at that time treated as property comprised in the gift. In the application of this paragraph to Scotland, references to a chattel shall be construed as references to a corporeal moveable.
Where arrangements are entered into under which— the property comprised in the gift shall be treated for the purposes of the principal section as not enjoyed to the entire exclusion, or virtually to the entire exclusion, of the donor. In sub-paragraph (1) above—
This paragraph applies where there is a disposal by way of gift of property which, in relation to the donor, is at that time— and that property is property subject to a reservation . . . Where this paragraph applies— For the purpose only of determining whether, on the transfer of value which, by virtue of sub-paragraph (1A)(b) above, the donee is assumed to make, the requirement of section 106 or, as the case may be, section 117 of the 1984 Act (minimum period of ownership or occupation) is fulfilled,— Where the property disposed of by way of gift consists of shares or securities falling within paragraph (c) of sub-paragraph (1) above, relief shall not be available by virtue of Chapter II of Part V of the 1984 Act on the material transfer of value unless— and for the purposes only of determining whether, on the transfer of value which, by virtue of sub-paragraph (1A)(b) above, the donee is assumed to make, the requirements of subsection (1) of section 123 of the 1984 Act are fulfilled, it shall be assumed that the requirement in paragraph (b) of that subsection (as to ownership of the shares or securities) is fulfilled. In this paragraph, “the material transfer of value” means, as the case may require,— If the donee dies before the material transfer of value, then, as respects any time after his death, any reference to his personal representatives or, as the case may require, the person (if any) by whom the property, shares or securities concerned were taken under a testamentary dispostition made by the donee or under his intestacy (or partial intestacy).
Section 109.
For any reference in the 1982 Schedule to ethane there shall be substituted a reference to light gases, as defined in section 109 of this Act. Except as provided below, any reference in the 1982 Schedule to section 134 of the Finance Act 1982 shall be construed as a reference to section 109 of this Act.
In paragraph 1 (provisions as to the election), in sub-paragraph (2)(b) for the words “and not exceeding fifteen years” there shall be substituted “or in the case of an election made before 31st December 1986, beginning on 1st July 1986” and for sub-paragraph (2)(d) there shall be substituted—. At the end of that paragraph there shall be inserted the following sub-paragraph—
In paragraph 2 (conditions for acceptance of an election) in sub-paragraph (1) after the words “and (3)” there shall be inserted “and paragraph 2A”. In sub-paragraph (2) of that paragraph, after the words “such that” there shall be inserted “subject to paragraphs 2A and 3A below”.
After paragraph 2 there shall be inserted the following paragraph—
In paragraph 3 (definition of “the relevant contract”in sub-paragraph (1)) in paragraph (a) after the word “and”, in the first place where it occurs, there shall be inserted the words “which, subject to sub-paragraph (3) below” and in the words following paragraph (b) for the words from “is not” onwards, there shall be substituted “which, subject to paragraph 2A(2) above, is not necessarily a contract for the sale of light gases for the purposes specified in the election”. At the end of that paragraph there shall be added the following sub-paragraphs—
After paragraph 3 there shall be inserted the following paragraph—
After paragraph 6 there shall be inserted the following paragraph—
In paragraph 7 (acceptance or rejection of new price formula) in sub-paragraph (2) after the words “paragraph 3” there shall be inserted “and, where appropriate, paragraphs 2A and 3A”; and at the end of paragraph (b) of that sub-paragraph there shall be insertedor ; and for the words from “were specified” onwards there shall be substituted “had been specified in, and at the time of, the election and as if the circumstances giving rise to the new price formula had been in contemplation at that time”. In sub-paragraph (5) of that paragraph, after “6(5)(b)” there shall be inserted “or paragraph 6A(4)”.
In paragraph 8 (appeals) in sub-paragraph (1) after paragraph (d) there shall be inserted the following paragraph—. In sub-paragraph (4)(b) of that paragraph after “6(1)(b)” there shall be inserted “or paragraph 6A”.
In paragraph 9 (returns)—
after “6(1)(b)” there shall be inserted “or paragraph 6A”; and
for the words “section 134(3) of this Act” there shall be substituted “section 109(4) of the Finance Act 1986”; and
in paragraph (b) after “6” there shall be inserted “or paragraph 6A”.
In paragraph 11 (interpretation) sub-paragraph (1) shall be omitted. In sub-paragraph (2) of that paragraph the words from “to an election” to “and any reference” shall be omitted. In sub-paragraph (4) of that paragraph for the words “section 134(2)(a) of this Act” there shall be substituted “section 109(3)(a) of the Finance Act 1986”.
Section 111.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 34 of the Act of 1981 (instalments payable on account by programme contractors in respect of additional payments) shall be amended as follows. In subsection (2)(b) the words from “when the” to the end shall be omitted. For subsection (3) there shall be substituted the following subsection—
Section 35 of the Act of 1981 (provision for supplementing additional payments) shall be amended as follows. In paragraph (a) of subsection (1) the words “or is” shall be inserted after the word “is”, where it last occurs. For paragraph (b) of that subsection there shall be substituted the following paragraph— In subsection (4), for the words “the accounting period to which it relates” there shall be substituted the words “the period of six months beginning with the date on which the programme contractor furnishes to the Authority, in accordance with the terms of his contract as a programme contractor, a copy of his audited accounts for the accounting period to which the order relates”. After subsection (2) there shall be inserted the following subsection—
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
In paragraph 3 of Schedule 4 to the Act of 1981—
in sub-paragraph (1)(a), for the words "relevant income and relevant expenditure" there shall be substituted the words "income and expenditure of any category" and for the words "the profits" there shall be substituted the words "relevant category of profits"; and
in sub-paragraph (1)(b), for the words "the profits" there shall be substituted the words "any category of profits".
In paragraph 4(1) of Schedule 4 to the Act of 1981, after the word "profits", in paragraph (b) there shall be inserted—or.
Without prejudice to the generality of sub-paragraph (1) above, the duty imposed on the Authority by that sub-paragraph includes the duty to impose, so far as is reasonably practicable, such requirements as will enable the Authority to determine the amounts (if any) which, in relation to any programme contractor, are to be treated as relevant second category income and relevant secondary category expenditure by virtue, respectively, of subparagraphs (3) and (5) of paragraph 2B.
Paragraph 9 of Schedule 4 to the Act of 1981 shall be amended as follows. In sub-paragraph (1), the following shall be substituted for the definition of subsidiary—. For the purposes of this Schedule a person shall be taken to be connected with a programme contractor— but does not include any person whose trade consists wholly or mainly of the distribution of programmes by wireless telegraphy or cable. Where the same person falls within more than one category of programme contractor, the definitions of "first category rate" and "second category rate" in section 32(4A) shall not have the effect of applying the lower or lowest rate in respect of all of his first category profits or (as the case may be) all of his second category profits but, subject to section 32(6), those profits shall be apportioned, and the provisions of this Act applied, in such manner as the Authority consider appropriate with a view to securing that the overall amount payable by him by way of additional payments is, as near as may be, equal to the aggregate of the amounts which would be so payable if there were as many separate programme contractors as there are categories of programme contractor within which he falls.
In this paragraph— Any contract between the Authority and a programme contractor which is in force immediately before the passing of this Act shall, until it is varied or superseded by a further contract between them or expires or is otherwise terminated (whichever first occurs) be deemed to be modified by virtue of this Schedule so as— and (subject to paragraph 4 of Schedule 4 to the Act of 1981) any provisions of the contract which provide for arbitration as to any matters contained in the contract in accordance with the existing statutory provisions shall be construed as making the like provision for arbitration in relation to matters deemed to be included in the contract by virtue of this sub-paragraph. Where it appears to the Authority that the new statutory provisions call for the inclusion of additional terms in any such contract, but do not afford sufficient particulars of what those terms should be, the Authority may, after consulting the programme contractor, decide what those terms are to be. This paragraph shall not be taken to have effect in relation to any contract entered into by a programme contractor and any person other than the Authority before the passing of this Act.
This paragraph applies in relation to any accounting period of a programme contractor which begins before 1st April 1986 and ends after 31st March 1986 (“the accounting period”). The additional payments payable by the programme contractor under section 32 of the Act of 1981 in relation to his profits for the accounting period shall be the aggregate of the following amounts— where (taking any odd four days or more as a week) X is the number of weeks in the accounting period falling before 1st April 1986; and Y is the number of weeks in the accounting period falling after 31st March 1986. For the purposes of the application of paragraph 2C of Schedule 4 to the Act of 1981 in relation to losses incurred by the programme contractor during the accounting period, those losses shall be reduced by multiplying them where X and Y have the same meaning as in sub-paragraph (2) above.
Section 114.
Chapter Short title Extent of repeal 1979 c. 4. The Alcoholic Liquor Duties Act 1979. In section 15, subsections (6A) and (6B), in subsection (7) the words “restriction or requirement” and in subsection (8) the words “restriction or requirement”. In section 46(2), the word “accidentally”. 1981 c. 35. The Finance Act 1981. In Schedule 8, paragraphs 2(b) and 14(b). 1985 c. 54. The Finance Act 1985. Section 2.
Chapter Short title Extent of repeal 1971 c. 10 The Vehicles (Excise) Act 1971. In section 23(f), the words from “and as” to “replacement”. In paragraph 13 of Part I of Schedule 7, in the text of section 17(2) as modified, paragraph (a) and, in paragraph (b), the words from the beginning to “class”. In paragraph 20 of Part I of Schedule 7, in the text of section 23 as modified, in subsection (1)(e) the words from “and for” to “book”. 1972 c. 10 (N.I.). The Vehicles (Excise) Act (Northern Ireland) 1972. In section 23(f), the words from “and as” to “replacement”. In paragraph 13 of Part I of Schedule 9, in the text of section 17(2) as modified, paragraph (a) and, in paragraph (b), the words from the beginning to “class”. In paragraph 20 of Part I of Schedule 9, in the text of section 23 as modified, in subsection (1)(e) the words from “and for” to “book”. The repeals in paragraph 13 of Part I of Schedule 7 to the Vehicles (Excise) Act 1971 and paragraph 13 of Part I of Schedule 9 to the Vehicles (Excise) Act (Northern Ireland) 1972 do not have effect with respect to the surrender of licences taken out before 1st January 1987.
Chapter or Number Short title Extent of repeal 1972 c. 11 (N.I.). The Miscellaneous Transferred Excise Duties Act (Northern Ireland) 1972. Part III. In section 72(2), the words from the beginning to “Schedule 2”. Schedules 1 and 2. 1974 c. 30. The Finance Act 1974. Section 2(2) (as it remains in force in relation to Northern Ireland). 1981 c. 63. The Betting and Gaming Duties Act 1981. In section 9(3)(a), the words “Northern Ireland or” and the words “of the Parliament of Northern Ireland or, as the case may be,”. In section 12(4), the words from “and ”betting office licence”’ to the end. In section 19(2) the words “Northern Ireland or” and the words “the Parliament of Northern Ireland or, as the case may be,”. In section 20(2), the definition of “Great Britain”. Section 35(4). 1985 c. 54. The Finance Act 1985. In Schedule 5, paragraph 8. S.I. 1985/1204 (N.I. 11). The Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985. In Schedule 19, paragraphs 11 to 15 and 17.
These repeals—
so far as they relate to general betting duty or pool betting duty, come into force on the betting commencement date (as defined in section 6 of this Act), but do not affect duty in respect of bets made before that date; and
so far as they relate to bingo duty, come into force on the bingo commencement date (as so defined).
Chapter Short title Extent of repeal 1979 c. 4. The Alcoholic Liquor Duties Act 1979. In section 4(3), in the Table, the words “licence year”. Section 12(2) and (3). Section 18(3) and (4). In section 25(1)(b), the words “has in his possession or”. Section 47(3) and (4). Section 48(2) and (3). Section 54(3). Section 55(3). In section 56(1)(a), the word “renewal”. Section 75(3) and (4). Section 81. Section 83. 1979 c. 6. The Matches and Mechanical Lighters Duties Act 1979. Section 2(2) and (3).
Chapter Short title Extent of repeal 1970 c. 10. The Income and Corporation Taxes Act 1970. In section 457(1A), the words from “and does not” to the end. In Schedule 8, paragraph 12. 1972 c. 41. The Finance Act 1972. In section 100(6), the words from “if the limit” to “the relevant income and”. Section 103(1) to (3). Section 107(3). 1974 c. 30. The Finance Act 1974. Section 22(2). Section 37(2). 1977 c. 36. The Finance Act 1977. In section 32(6), paragraph (b), and in paragraph (c) the words “or (b)”. 1980 c. 48. The Finance Act 1980. In Schedule 10, paragraphs 2 and 22. 1983 c. 28. The Finance Act 1983. In Schedule 5, paragraph 5(8) to (11) and paragraph 7(3). 1984 c. 43. The Finance Act 1984. Section 20(1) and (2). 1985 c. 54. The Finance Act 1985. Section 49.
The repeal in section 457(1A) of the Income and Corporation Taxes Act 1970 and the repeal of section 49 of the Finance Act 1985 have effect for the year 1986–87 and subsequent years of assessment.
Subject to section 45(4) of this Act, the repeal in Schedule 8 to the Income and Corporation Taxes Act 1970 does not have effect with respect to any payment which, under section 187(4) of that Act, is treated as income received before 4th June 1986.
The repeal in section 100(6) of the Finance Act 1972 has effect with respect to accounting periods beginning on or after 3rd June 1986.
The repeal of section 107(3) of the Finance Act 1972 has effect where a company ceases to carry on a trade, or part of a trade, after 18th March 1986, subject to the application of section 42(3) of this Act with the words “the repeal does not” substituted for “those amendments do not”.
The repeal of section 22(2) of the Finance Act 1974 has effect for the year 1986–87 and subsequent years of assessment.
The repeals in section 32(6) of the Finance Act 1977 have effect for the year 1984–85 and subsequent years of assessment.
The repeals in Schedule 5 to the Finance Act 1983 have effect in relation to shares issued at any time after 18th March 1986.
The repeals in section 20 of the Finance Act 1984 do not have effect with respect to any financial year ending before 1st April 1986.
Chapter Short title Extent of repeal 1968 c. 3. The Capital Allowances Act 1968. Sections 51 to 66. Section 68. In section 70(3), the words from “and, in the case of” to “direct”. Section 74(6). In section 75(1), the word “61,”. Section 78(3). In section 79(4), the words “ and section 65(1)”. In section 83(1), the words “or section 56”. In section 85(1)(c), the words “other than section 60”. Schedules 5 and 6. In Schedule 7, paragraph 4(2)(c). 1971 c. 68. The Finance Act 1971. Section 52. 1973 c. 51. The Finance Act 1973. Section 31(6)(c). 1978 c. 42. The Finance Act 1978. Section 39. 1985 c. 54. The Finance Act 1985. Section 62.
The repeals of sections 68 and 74(6) of the Capital Allowances Act 1968 and section 39 of the Finance Act 1978 do not have effect with respect to expenditure incurred before 1st April 1986 nor with respect to expenditure under existing contracts, as defined in section 56(2) of this Act.
The remaining repeals, apart from the repeal of section 62 of the Finance Act 1985, have effect subject to the provisions of Schedule 14 to this Act.
Chapter Short title Extent of repeal 1984 c. 43. The Finance Act 1984. In Schedule 13, paragraphs 2 and 3. 1985 c. 54. The Finance Act 1985. Section 67(1).
Chapter Short title Extent of repeal 1970 c. 10. The Income and Corporation Taxes Act 1970. Section 475(6). 1985 c. 54. The Finance Act 1985. In Schedule 23, paragraphs 41 and 42. These repeals have effect in accordance with paragraphs 1(5) and 2(2) of Schedule 18 to this Act.
(1) Reconstructions etc. Chapter Short title Extent of repeal 1927 c. 10. The Finance Act 1927. Section 55. 1928 c. 17. The Finance Act 1928. Section 31. 1928 c. 9 (N.I.). The Finance Act (Northern Ireland) 1928. Section 4. 1936 c. 23 (N.I.). The Finance (Companies’ Stamp Duty) Act (Northern Ireland) 1936. Section 1. 1980 c. 48. The Finance Act 1980. In Schedule 18, paragraph 12(1) and (1A). 1985 c. 54. The Finance Act 1985. Sections 78, 79 and 80. 1986 c. 41. The Finance Act 1986. Section 73. (2) Loan Capital Chapter Short title Extent of repeal 1963 c. 25. The Finance Act 1963. In section 62, subsections (2) and (6). 1963 c. 22. (N.I.). The Finance Act (Northern Ireland) 1963. In section 11, subsections (2) and (5). 1967 c. 54. The Finance Act 1967. Section 29. 1967 c. 20 (N.I.). The Finance Act (Northern Ireland) 1967. Section 6. 1974 c. 30. The Finance Act 1974. In Schedule 11, paragraphs 5 and 15. In Schedule 12, paragraphs 7 and 8. 1976 c. 40. The Finance Act 1976. Section 126. 1980 c. 48. The Finance Act 1980. Section 96. 1981 c. 35. The Finance Act 1981. Section 109. (3) Bearer Letters of Allotment etc. Chapter Short title Extent of repeal 1891 c. 39. The Stamp Act 1891. In Schedule 1, in the heading “Bearer Instrument”, paragraph 2 of the exemptions. (4) Changes in Financial Institutions Chapter or Number Short title Extent of repeal 1920 c. 18. The Finance Act 1920. Section 42. 1961 c. 36. The Finance Act 1961. Section 34. 1961 c. 10 (N.I.). The Finance Act (Northern Ireland) 1961. Section 4. 1973 c. 51. The Finance Act 1973. In Schedule 21, paragraphs 1 and 3. S.I. 1973/1323 (N.I. 18). The Finance (Miscellaneous Provisions) (Northern Ireland) Order 1973. In Schedule 3, paragraphs 1 and 3. 1976 c. 40. The Finance Act 1976. In section 127, in subsection (1) the words “which is executed for the purposes of a stock exchange transaction”, subsections (2) and (3), in subsection (5), the definitions of “jobber” and “stock exchange transaction”, and in subsection (7) the words “and this section”. 1980 c. 48. The Finance Act 1980. Section 100.
The repeals under (1) above have effect in relation to any instrument executed in pursuance of a contract made on or after the day on which the rule of The Stock Exchange that prohibits a person from carrying on business as both a broker and a jobber is abolished.
The repeals under (2) above have effect in relation to any instrument to which section 79 of this Act applies.
The repeals under (4) above have effect as provided by the Treasury by order made by statutory instrument, and different provision may be made for different repeals.
Chapter Short title Extent of repeal 1984 c. 51. The Capital Transfer Tax Act 1984. In section 7(1)(a), the word “appropriate”. Sections 148 and 149. In section 167(2), the words from “and shall not” to the end. Section 204(4). In section 236(3), the words “149”. In Schedule 2, in paragraphs 2 and 4, the words “the first of”, in paragraph 3, the words “the second of”, and paragraph 7.
The repeals of sections 148 and 149 of the Capital Gains Tax Act 1984 and in sections 167 and 236 of, and Schedule 2 to, that Act have effect where the donee’s transfer was made on or after 18th March 1986.
The remaining repeals have effect with respect to transfers of value made, and other events occurring, on or after 18th March 1986.
Chapter Short title Extent of repeal 1981 c. 68. The Broadcasting Act 1981. In section 32(9), the words “to amend subsections (4) and (5)”. In section 34(2)(b), the words from “when the” to the end. In section 35(2)(a) and (b), the word “relevant”. 1984 c. 46. The Cable and Broadcasting Act 1984. Section 40(3). These repeals shall be deemed to have come into force on 1st April 1986.