Finance Act 1971

This paragraph applies to all goods to which section 47 of the Act of 1952 (entry outwards of certain dutiable etc. goods) does not apply. Subject to paragraphs 4 and 13 below, before any goods to which this paragraph applies are exported or shipped for exportation, the exporter shall deliver to the proper officer an entry outwards of the goods under this paragraph. The form of entries under this paragraph, the particulars to be contained therein and the manner of their delivery shall be such as the Commissioners may from time to time direct. Directions under this paragraph may, if the Commissioners think fit, contain provisions authorising the delivery in circumstances specified in the directions of provisional entries under this paragraph, and imposing requirements on persons delivering such entries as to the subsequent delivery of perfected entries, and the obtaining and retention for a specified period of receipts for perfected entries. Where the particulars contained in any entry delivered under this paragraph are in any way incorrect or inaccurate, the person delivering it shall notify the proper officer of any necessary correction within a period of fourteen days beginning with the day of delivery. The Commissioners may give directions under this paragraph imposing on persons specified in the directions requirements as to the giving of information with respect to, and the furnishing of documents in connection with, goods which have been entered under this paragraph but are not exported or shipped for exportation within a specified period beginning with the day of delivery of the entry. Goods shall not be treated by virtue of anything in this paragraph as goods to which section 47 of the Act of 1952 applies.

Directions under section 47 of the Act of 1952 may, if the Commissioners think fit, contain provisions authorising the delivery in circumstances specified in the directions of provisional entries under that section, and imposing requirements on persons delivering such entries as to the subsequent delivery of perfected entries, and the obtaining and retention for a specified period of receipts for perfected entries.

The Commissioners shall have power—

If the Commissioners think fit so to direct, goods within paragraph (c) or (d) of section 47(5) of the Act of 1952 may be shipped for exportation without entry under that section, and goods to which paragraph 1 above applies may be shipped for exportation without entry under that paragraph, if, before shipment, a number assigned under paragraph 3 above to a person concerned in the exportation of the goods, together with such particulars of the goods and other information relating thereto as the directions may require, is furnished in accordance with the directions to a person specified therein. Directions under this paragraph may contain provision enabling the Commissioners to exclude shipments of goods from their operation in particular cases by giving notice to that effect in accordance with the directions.

Section 49 of the Act of 1952 (duty of exporters to deliver specifications of goods not required to be entered under section 47 of the Act) shall apply to any goods which are shipped for exportation without entry under the said section 47 by virtue of directions given under paragraph 4 above, and shall not apply to any goods to which paragraph 1 above applies unless they are shipped for exportation without entry under that paragraph by virtue of directions so given. Where any goods are shipped for exportation without entry by virtue of directions given under paragraph 4 above, the person whose number was furnished in relation to the goods for the purpose of their shipment without entry shall, if it was so furnished with his consent, be the exporter of the goods for the purposes of the said section 49. The Commissioners may give a direction under this paragraph requiring any person delivering a specification under the said section 49 in relation to goods shipped for exportation to obtain a receipt therefor in accordance with the direction and to retain it for a period specified therein. The said section 49 shall be amended as follows— In consequence of the amendment made by sub-paragraph (4)(a) above, section 11(5) of the Finance Act 1966 (application of the said section 49 to goods exported by pipe-line) shall also be amended by substituting for the words “six days ” the words “fourteen days ”.

This paragraph applies to all goods which are required to be entered outwards before shipment for exportation, whether under section 47 of the Act of 1952 or under paragraph 1 above. The Commissioners may make regulations—

The Commissioners may give directions under this paragraph imposing on persons specified in the directions requirements as to the giving of information with respect to, or the furnishing of documents in connection with, goods exported, or intended to be exported, in any such vehicle or container as is specified in the directions, or by such other means, or in accordance with any such commercial procedure, as is so specified.

The Commissioners may give directions under this paragraph providing that, before any goods are shipped for exportation, a number identifying the goods in compliance with the directions is to be given in accordance with the directions by and to such persons as are specified in the directions.

Section 54(1)(c) of the Act of 1952 (under which the Commissioners may make regulations requiring the delivery of a manifest of all cargo carried in an exporting ship) shall be amended by inserting—

Sections 47(2) and 86(3) of the Act of 1952 (goods to be treated as entered when entry signed by proper officer) shall cease to have effect.

If any goods of which entry is required under paragraph 1 of this Schedule are exported or shipped for exportation before delivery of an entry in respect thereof, the exporter shall be liable to a penalty of £100. Any person who fails to comply with sub-paragraph (5) of the said paragraph 1 in the case of any entry shall be liable to a penalty of £10. Any person who, being required by directions given under or by virtue of paragraph 1, 2 or 5 of this Schedule to obtain and retain for a specified period a receipt for any entry or specification, fails to produce a receipt complying with the directions on demand made by a proper officer at any time during that period shall be liable to a penalty of £100. If any person, for the purpose of enabling any goods to be shipped without entry by virtue of directions given under paragraph 4 of this Schedule, furnishes a number other than one for the time being assigned to him under paragraph 3 of this Schedule, then, unless the number is one for the time being assigned to another person under that paragraph and is furnished with that person's consent, he shall be liable to a penalty of £100. Any person who contravenes or fails to comply with any regulations made under this Schedule, or with any directions given under or by virtue of any provision of this Schedule other than paragraph 3, shall be liable to a penalty of £100.

Regulations or directions made or given under any provision of this Schedule may make different provision for different circumstances. Directions given under any such provision may be varied or revoked by subsequent directions thereunder.

The Commissioners may relax any requirement imposed by or under this Schedule as they think fit in relation to any goods.

The provisions of this Schedule shall be treated for all purposes as included in Part II of the Act of 1952. Without prejudice to section 11(4) of the Finance Act 1966 (application of customs Acts to exportation by pipe-line) paragraph 6(2) of this Schedule shall apply to the charging of goods into a pipe-line for exportation as it applies to the putting of goods alongside a ship or aircraft for loading for exportation.

Paragraphs 1, 2, 4 to 8 and 11 of this Schedule shall come into operation on such day as the Commissioners may by order made by statutory instrument appoint, and different days may be so appointed for different paragraphs.

After section 226 of the Taxes Act insert—

For subsection (2) of section 227 of the Taxes Act substitute—

For subsection (3) of section 227 of the Taxes Act substitute—.

In section 228 of the Taxes Act (application of limits on relief to holders of pensionable offices, etc.)—

For section 228(4) of the Taxes Act substitute—

In section 393 of the Taxes Act after subsection (2) insert—.

Nothing in the principal section or this Schedule shall affect relief for a year of assessment before the year 1971-72. Subsection (3) of the principal section shall not authorise the approval of an annuity contract or trust scheme which allows the commutation of an annuity or part of an annuity first becoming payable before 6th April 1971. Paragraph 2 of this Schedule shall have effect as respects amounts carried forward from years before the year 1971-72 as well as respects later years.

References in this Schedule to the wife's earnings are references to any earned income of hers other than—

In charging the income of husband and wife in accordance with section 37 of the Taxes Act (wife's income deemed to be husband's)—

Subject to the following provisions of this paragraph, the reliefs to be given under Chapter II of Part I of the Taxes Act (including the deductions from total income to be made for the purposes of surtax under section 28 of that Act) shall be determined as if the husband and the wife were not married and— Accordingly the reliefs to be given under that Chapter in respect of the income chargeable under either sub-paragraph (a) or sub-paragraph (b) of paragraph 2 above shall not reduce the tax or the income chargeable under the other of those sub-paragraphs. No relief shall be given either to the husband or to the wife under section 6, 7, 9(2), 9(3), 13 or 14 of the Taxes Act. References in Chapter II of Part I of the Taxes Act to the claimant shall be construed as including the wife.

Notwithstanding anything to the contrary in the Income Tax Acts, where any amount is under any provision of those Acts to be deducted from or set off against income in respect of any payments, loss or capital allowance, then— Sub-paragraph (1) above shall not affect the giving of any relief under section 174 of the Taxes Act (carry-back of terminal losses) for a year of assessment for which no election under section 23 of this Act was in force.

Income tax charged on the wife's earnings under paragraph 2(a) above shall, whether or not an application under section 38 of the Taxes Act (separate assessment) is in force, be assessed and recovered as if she were a single woman, and any repayment of tax assessed in pursuance of this paragraph shall be made to her.

Where an application under section 38(2) of the Taxes Act (separate assessment to surtax) is in force then, in addition to any surtax charged under paragraph 2(a) above, so much of the surtax charged under paragraph 2(b) above as is attributable to any income of the wife's shall be assessed on and recovered from her; and for this purpose—

Where subsection (3) of section 39 of the Taxes Act (separate returns in cases of separate assessment) applies for the purposes of subsection (1) and (2) of that section it shall apply also for the purpose of this Schedule ; but subject thereto nothing in this Schedule or in section 23 of this Act shall be taken to affect the provisions of the Taxes Management Act 1970 as to returns.

In relation to the year 1973-74 and subsequent years of assessment the preceding paragraphs of this Schedule shall apply with the omission of the following:—

No first-year allowance shall be made in respect of so much of any expenditure as is taken into account for the purposes of— Provided that the Treasury may from time to time, by order made by statutory instrument, vary as respects expenditure incurred after the passing of this Act, or any description of such expenditure specified in the order, the percentages specified in paragraphs (c) and (d) above or either of them. If any such grant is made after the making of any such allowance, that allowance shall to that extent be withdrawn; and where the amount of any such grant is repaid in whole or in part by the grantee to the grantor, then, to the extent to which it has been so repaid, it shall be deemed never to have been made. All such assessments and adjustments of assessments shall be made as may be necessary to give effect to sub-paragraph (2) above ; and, notwithstanding anything in any other provision, the time within which such an assessment or adjustment may be made shall not expire before the expiry of three years from the end of the chargeable period in which the grant or, as the case may be, repayment is made. This paragraph does not apply to expenditure on the provision of ships.

Expenditure in respect of which a deduction may be allowed under section 91 of the Capital Allowances Act 1968 (which gives a deduction of 100 per cent. in the case of capital expenditure on scientific research) shall be disregarded for all the purposes of Chapter I of Part III of this Act; and where a deduction in respect of any expenditure has been allowed under the said section 91 in taxing a trade carried on by any person, paragraph 7 of this Schedule shall not apply on that person's bringing into use for the purposes of the trade of any machinery or plant representing that expenditure. Section 50 of the said Act of 1968 (effect on allowances under Chapter II of Part I of that Act of allowances in respect of machinery or plant used for exploration or in respect of agricultural or forestry works) shall have effect as if references therein to the said Chapter II included references to Chapter I of Part III of this Act.

Where a person incurs capital expenditure on the provision by purchase of machinery or plant which has been in use for the purposes of a trade carried on by the seller, and— a first-year allowance shall not be made in respect of the expenditure, or if made shall be withdrawn, and there shall be disregarded for the purposes of section 44 of this Act so much (if any) of the expenditure as exceeds the disposal value to be brought into account under that section by reason of the sale. Where a person enters into a contract under which, on the performance thereof, he will or may become the owner of machinery or plant which has been in use for the purposes of a trade carried on by the person to whom the machinery or plant belongs, and— a first-year allowance shall not be made in respect of any expenditure incurred by him under the contract so far as relating to that machinery or plant, or if made shall be withdrawn, and there shall be disregarded for the purposes of section 44 of this Act so much (if any) of the expenditure as exceeds the disposal value to be brought into account under that section by reason of the contract so far as so relating. Where a person, being entitled to the benefit of a contract under which, on the performance thereof, he will or may become the owner of any machinery or plant which has been in use for the purposes of his trade, assigns the benefit of the contract so far as it relates to that machinery or plant to another person, and— a first-year allowance shall not be made in respect of any expenditure incurred by the assignee under the contract so far as so relating, or by way of consideration for the assignment, or if so made shall be withdrawn, and there shall be disregarded for the purposes of section 44 of this Act so much (if any) of the assignee's expenditure as exceeds the disposal value to be brought into account under section 45 of this Act by reason of the assignment. All such assessments and adjustments of assessments shall be made as may be necessary to give effect to the preceding provisions of this paragraph.

Subject to sub-paragraph (2) below, the following provisions shall have effect where a person has incurred capital expenditure on the provision of machinery or plant for the purposes of a trade and, by reason of any event, the machinery or plant ceases to belong to him without having been brought into use for those purposes— Where the event referred to in sub-paragraph (1) above is the assignment of the benefit of a contract— All such assessments and adjustments of assessments shall be made as may be necessary to give effect to the preceding provisions of this paragraph.

A first-year allowance may be made to a person in respect of any machinery or plant notwithstanding that it appears that, during the period during which the machinery or plant will be used for the purposes of a trade carried on by him, it will also be used for other purposes ; but the allowance in any such case shall be so much only of the allowance that would fall to be made if the machinery or plant were to be used only for the purposes of the trade as may be just and reasonable having regard to all the relevant circumstances of the case and, in particular, to the extent to which it appears that the machinery or plant is likely to be used for the said other purposes during that period. Where any machinery or plant is used partly for the purposes of a trade and partly for other purposes, the following provisions of this paragraph shall have effect with respect to the allowances and charges to be made in the case of the trade (hereafter called “the actual trade ”) under section 44 of this Act. If the machinery or plant has been used for the purposes of the actual trade at any time before the beginning of the chargeable period or its basis period in which it is first used partly for those purposes and partly for other purposes, it shall be treated for the purposes of the said section 44 as having permanently ceased to be used for the purposes of the actual trade immediately after the beginning of the said chargeable or basis period. If an allowance under the said section 44 falling by virtue of this paragraph to be made for any chargeable period in the case of the actual trade is not claimed, or is reduced in amount in accordance with a requirement under the proviso to subsection (2) of that section, then, in determining the allowance or charge under that section which would fall to be made for any subsequent chargeable period in the case of the notional trade, any allowance falling to be made in the case of that trade for the first-mentioned chargeable period shall be treated as not claimed or, as the case may require, proportionately reduced.

If it appears that, during the period during which any machinery or plant will be used by a person for the purposes of his trade, sums which— are, or are to be, payable to that person directly or indirectly by the Crown, or by any government or public or local authority (whether in the United Kingdom or elsewhere), or by any other person, then, unless those sums are in respect of, or take account of, part only of the said wear and tear, any expenditure incurred by the first-mentioned person in providing the machinery or plant shall be wholly disregarded for the purposes of Chapter I of Part III of this Act. Where sub-paragraph (1) above would apply to a person's expenditure on the provision of machinery or plant but for the fact that the sums there referred to are in respect of, or take account of, part only of the wear and tear to the machinery or plant, a first-year allowance may be made in respect of the expenditure, but the amount thereof shall be reduced to such extent as may be just and reasonable having regard to all the relevant circumstances of the case. Where sums within sub-paragraph (1) above are paid as mentioned in that sub-paragraph to a person carrying on a trade, but are in respect of, or take account of, part only of the wear and tear to the machinery or plant in respect of which they are paid, the following provisions of this paragraph shall have effect with respect to the allowances and charges to be made in the case of the trade (hereafter called “the actual trade ”) under section 44 of this Act. If the machinery or plant has been used for the purposes of the actual trade at any time before the beginning of the chargeable period or its basis period in which the first such sum is so paid in respect thereof, it shall be treated for the purposes of the said section 44 as having permanently ceased to be used for the purposes of the actual trade immediately after the beginning of the said chargeable or basis period. If an allowance under the said section 44 falling by virtue of this paragraph to be made for any chargeable period in the case of the actual trade is not claimed, or is reduced in amount in accordance with a requirement under the proviso to subsection (2) of that section, then, in determining the allowance or charge under that section which would fall to be made for any subsequent chargeable period in the case of the notional trade, any allowance falling to be made in the case of that trade for the first-mentioned chargeable period shall be treated as not claimed or, as the case may require, proportionately reduced.

Subject to sub-paragraph (2) below, where a person— the said section 44 shall have effect as if that person had incurred capital expenditure on the provision of the machinery or plant for the purposes of the trade in the chargeable period related to its bringing into use for those purposes, the amount of that expenditure being taken as the price which the machinery or plant would have fetched if sold in the open market on the date when it was so brought into use, and the machinery or plant being treated as belonging to that person in consequence of his having incurred that expenditure.

Where for any chargeable period a first-year allowance falls to be made to a person carrying on a trade in respect of expenditure incurred by him on the provision of a new ship, that person may, by notice in writing given to the inspector not later than two years after the end of the period, require the postponement either of the whole allowance or of so much thereof as is specified in the notice. Where a notice has been given under sub-paragraph (1) above in respect of any first-year allowance— All such assessments and adjustments of assessments shall be made as may be necessary to give effect to the provisions of this paragraph. An allowance which is postponed by virtue of this paragraph shall not by reason only of the postponement fall within the references to allowances or amounts carried forward from an earlier year or period in sections 169(4)(d), 174(6) and 259(2) of the Taxes Act (loss relief and group relief).

In paragraphs 10 to 12 below “motor car ” means any mechanically-propelled road vehicle other than one within paragraph (a), (b) or (c) of section 43 of this Act.

The following provisions of this paragraph shall have effect where capital expenditure exceeding £4,000 is incurred, or is treated under any provision of this Schedule as incurred, on the provision of a motor car for the purposes of a trade. It shall be assumed for the purposes of section 44 of this Act— and, subject to sub-paragraphs (3) to (5) below, the allowance or charge under that section which, on these assumptions, would fall to be made for any chargeable period in the case of the separate trade shall be made for that period in the case of the actual trade. If on the assumptions in sub-paragraph (2) above a writing-down allowance would fall to be made for any chargeable period in the case of the separate trade, the amount thereof shall be treated as not exceeding— Where the motor car ceases to be used for the purposes of the actual trade by reason of a transaction to which paragraph 3 of this Schedule applies— If either of the following events occurs in relation to the motor car— neither paragraph 5 nor paragraph 6 of this Schedule shall apply, but, for the chargeable period related to the event and any subsequent period, instead of there being made in the case of the actual trade the allowance or charge which under the preceding provisions of this paragraph would fall to be made for that period in the case of the separate trade, there shall be made so much of that allowance or charge as, in accordance with the said paragraph 5 or 6, would be just and reasonable if it were one falling to be made for that period in the case of the notional trade referred to in that paragraph.

Where capital expenditure exceeding £4,000 is incurred on the provision of a motor car and, by virtue of section 85 of the Capital Allowances Act 1968 as applied by this Schedule, writing-down allowances may be made to a person as if a contribution made by him to the expenditure had been expenditure on the provision of the motor car for the purposes of a trade, the amount of the allowance to be made for any chargeable period—

Where, apart from this paragraph, the amount of any expenditure on the hiring of a motor car the retail price of which when new exceeds £4,000 would be allowed to be deducted in computing for the purposes of tax the profits or gains of any trade, the said amount shall be reduced in the proportion which £4,000, together with one half of the excess, bears to the said retail price.

Where a person (the “successor ”) succeeds to a trade which was until that time carried on by another person (the “predecessor ”) and the two persons are connected with each other within the terms of section 533 of the Taxes Act, those persons may by notice in writing to the inspector elect that the provisions of this paragraph shall have effect; and in that event—

Where any machinery or plant which is in use for the purposes of a trade is demolished, then— In this paragraph any reference to the net cost of the demolition of any machinery or plant is a reference to the excess, if any, of the cost of the demolition over any moneys received for the remains of the machinery or plant.

Section 44 of the Capital Allowances Act 1968 (partnership using property of a partner) shall have effect as if the reference in subsection (1) to Chapter II of Part I of that Act included a reference to Chapter I of Part III of this Act, and as if the references in subsection (2) to section 33 of that Act and an event giving rise to a balancing allowance or balancing charge included references respectively to section 44(5) of this Act and an event requiring any disposal value to be brought into account. In section 45 of the said Act of 1968 (building alterations connected with installation of machinery or plant), the reference to the said Chapter II shall include a reference to the said Chapter I. Section 48 of the said Act of 1968 (successions to trades) shall, with the omission of the proviso to subsection (4) and subsection (6), have effect as if references therein to initial allowances, the said Chapter II, and section 47(1) of that Act included references respectively to first-year allowances, the said Chapter I and section 47(1) of this Act; but, in its application by virtue of this sub-paragraph, the section shall be modified by substituting, for all the words in subsection (2) from “be deemed to be a reference ” to the end of that subsection, the words "be deemed to be a reference to that price or, if it is less than that price, any excess of qualifying expenditure over disposal value which would have been taken into account under section 44 of the Finance Act 1971 for making an allowance for the chargeable period related to the permanent discontinuance of the deceased person's trade if the machinery or plant had had no disposal value." In section 77 of the said Act of 1968 (apportionments etc.) references to Part I of that Act shall include references to the said Chapter I; and the said Chapter I shall be treated as included in the provisions referred to in section 81(2) of that Act (procedure on apportionments etc.). In section 84(1) of the said Act of 1968 (subsidies etc.), the reference to Part I of that Act shall include a reference to the said Chapter I. Section 85(1) of the said Act (allowances in respect of contributions to capital expenditure) shall have effect as if the references therein to initial allowances and writing-down allowances included references respectively to first-year allowances and writing-down allowances under the said Chapter I, but, in its application by virtue of this sub-paragraph, modified by substituting the words “of that asset ” for the words “of a similar asset” ; and, for the purpose of any allowance under the said Chapter I given by virtue of the said section 85(1) in respect of any asset, that asset shall be treated as belonging to the person making the contribution in respect of which the allowance is given at any time when it belongs, or is treated under the said Chapter I as belonging, to the recipient of the contribution.

Where the disposal is of machinery or plant in relation to expenditure on which allowances or charges have been made under Chapter I of Part III of the Finance Act 1971, and neither paragraph 5 (assets used partly for trade purposes and partly for other purposes) nor paragraph 6 (wear and tear subsidies) of Schedule 8 to that Act applies, the capital allowances to be taken into account under this paragraph are to be regarded as equal to the difference between the capital expenditure incurred, or treated as incurred, under that Chapter on the provision of the machinery or plant by the person making the disposal and the disposal value required to be brought into account in respect of the machinery or plant. Any reference in the Capital Allowances Act 1968 to Chapter II of Part I of that Act shall, unless it is in the said Chapter II or in Chapter VI of the said Part I, include a reference to Chapter I of Part III of this Act. In the definition of “capital allowance” in section 526(5) of the Taxes Act, there shall be added at the end “and any allowance under Chapter I of Part III of the Finance Act 1971 ”. In sections 60(3) and 190(3) of the Taxes Act, for the words from “section 28 ” to the end there shall be substituted the words “such relief shall be given under this section as may be just and reasonable having regard to all the relevant circumstances and, in particular, to the extent of the use for the said other purposes ”. In sections 155(8), 174(12), 180(7), 190(1), 227(4), 252(2), 352(4), 485(4) and 528(5)(c) of the Taxes Act, any reference to the Capital Allowances Act 1968, to Part I of that Act, or to Chapter II of that Part, shall include a reference to Chapter I of Part III of this Act. Section 177 of the Taxes Act shall be amended by adding the following subsection after subsection (3)—. Section 492 of the Taxes Act shall be amended by adding the following subsection after subsection (8)— The following shall be substituted for the definition of “anticipated normal working life ” in section 493(6) of the Taxes Act— In paragraph 14(a) of Schedule 8 to the Taxes Act, after the words “section 33 of the Capital Allowances Act 1968 ” there shall be inserted the words “or under Chapter I of Part III of the Finance Act 1971 ”; and in paragraph 14(b) of that Schedule, for the words “Chapter II of Part I of that Act” there shall be substituted the words “Chapter II of Part I of the said Act of 1968 or Chapter I of Part III of the said Act of 1971 ”. In paragraph 9 of Schedule 2 to the Civil Aviation Act 1971, for the words “(which confers” there shall be substituted the words “and Chapter I of Part III of the Finance Act 1971 (which confer ”, and for the words “shall be made under the said Act of 1968 ” there shall be substituted the words “or first-year allowance shall be made under the said Act of 1968 or the said Act of 1971 ”.

Where section 40 of the Capital Allowances Act 1968 applies on a person's replacement of any machinery or plant by other machinery or plant on the provision of which his expenditure is capital expenditure to which Chapter I of Part III of this Act applies, it shall so apply with the substitution of the following for all the words from the beginning of paragraph (a) of subsection (1) to the end of the section—.

In this Schedule “the principal section” means section 55 of this Act.

Where a disposal of land is made on the compulsory acquisition of an interest in the land by an authority possessing compulsory purchase powers and the interest became vested in the acquiring authority before 23rd July 1970 the disposal shall be regarded for the purposes of subsection (2) of the principal section as having been made before that date, whether or not it would be so regarded apart from this paragraph.

Where section 33 of the Finance Act 1965 applied on the acquisition, before 23rd July 1970, of, or of an interest in, any new assets and the adjustment required to be made under subsection (1)(a) or subsection (2)(a) of that section was, by virtue of paragraph 9(5) of Schedule 14 to the Finance Act 1967, required to be computed as mentioned therein, the adjustment required to be made under subsection (1)(b) or (2)(b) of that section shall also be so computed, notwithstanding the repeals made by this Act.

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In this Schedule— Shares shall not be treated for the purposes of this Schedule as being of the same kind unless they are treated as being of the same class by the practice of a recognised stock exchange in the United Kingdom or elsewhere or would be so treated if dealt with on such a stock exchange.

Where no relief from income tax (for a year earlier than 1971-72) has been given in respect of a loss or part of a loss allowable under Case VII the loss or part shall, notwithstanding that the loss accrued before that year, be an allowable loss for the purposes of the capital gains tax, but subject to any restrictions imposed by paragraph 17(3) of Schedule 7 to the Finance Act 1965 (transactions between connected persons).

Any amount which, if income tax were chargeable under Case VII for a year of assessment later than 1970-71, would be so chargeable for such a year by virtue of section 160 (6) of the Taxes Act (remittance basis for individuals not domiciled in the United Kingdom) shall be chargeable to capital gains tax as a gain arising in that year.

Neither section 27(3) of the Finance Act 1965 (gains and losses on certain guaranteed stock disregarded if disposal within exempt price range), nor paragraph 5(2) of Schedule 7 to that Act (conversion of such stock), nor section 41(1) of the Finance Act 1969 (exemption of gilt-edged securities) shall apply in the case of any disposal of securities which occurs within 12 months after their acquisition. Sub-paragraph (1) above shall not exclude the application of the provisions mentioned therein where the person disposing of the securities had acquired them by devolution on death or as legatee or, if they were settled property, on becoming absolutely entitled thereto as against the trustee. Where, in the case of a man and his wife, paragraph 20 of Schedule 7 to the Finance Act 1965 applies in relation to the acquisition of any securities by the one from the other, and the one making the acquisition subsequently disposes of the securities by a disposal to which that paragraph does not apply, he shall be treated for the purposes of sub-paragraph (1) above as if he had acquired the securities when the other did.

Paragraph 2 of Schedule 7 to the Finance Act 1965 (pooling of shares etc.) shall not apply to gilt-edged securities or to securities in the case of which the application of section 27(3) of that Act is excluded by paragraph 4 above and shall, in its application to other assets, have effect subject to paragraph 6 of this Schedule; and paragraphs 22(6) and 26(3) of Schedule 6 to that Act and section 32(5) of the Finance Act 1968 (shares held on 6th April 1965) shall also have effect subject to paragraph 6 of this Schedule.

The following provisions shall apply where securities of the same kind are acquired or disposed of by the same person on the same day and in the same capacity— Where the quantity of the securities so disposed of exceeds the quantity of the securities so acquired, then so far as the excess— it shall be treated, subject to paragraph 7 below, as diminishing a quantity subsequently acquired, and a quantity so acquired at an earlier date rather than one so acquired at a later date.

The following provisions shall apply, subject to paragraph 6(1) above and paragraph 8 below, for the purpose of identifying gilt-edged securities disposed of by any person with securities of the same kind acquired by him in the same capacity, and for determining whether the application of section 27(3) of the Finance Act 1965 to any securities is excluded by paragraph 4 above. Securities disposed of at an earlier date shall be identified before securities disposed of at a later date, and their identification shall have effect also for determining what securities might be comprised in the later disposal. Securities disposed of shall be identified with securities acquired within the twelve months preceding the disposal rather than with securities not so acquired, and with securities so acquired at an earlier date rather than with securities so acquired at a later date.

Where, in the case of a man and his wife living with him, one of them— then, if under the preceding provisions of this Schedule any of the securities disposed of to the husband or wife would be identified with securities acquired within the twelve months preceding the disposal and any of the securities disposed of to the third person with securities not so acquired, the securities disposed of to the third person shall be identified with securities so acquired before any securities disposed of to the husband or wife are so identified. If there is more than one disposal to the wife or husband, or to a third party, the provisions of this paragraph shall be applied to securities disposed of at an earlier date before they are applied to securities disposed of at a later date, and the identification of the securities disposed of at the earlier date shall have effect also for determining what securities might be comprised in the later disposal.

Where a loss accrues to a person from his acquisition and disposal of gilt-edged securities and he re-acquires (in the same capacity) the same securities within one month of the disposal or, if the re-acquisition is not through a stock exchange, within six months of the disposal, that loss shall not be deductible except from a chargeable gain accruing to him on the disposal of the securities re-acquired. Where a person disposes of gilt-edged securities and afterwards acquires gilt-edged securities of the same kind within the period referred to in sub-paragraph (1) above, he shall be treated for the purposes of that sub-paragraph as re-acquiring the securities disposed of (or such quantity of them as does not exceed the quantity acquired) but so that— In the case of a man and his wife living with him the preceding provisions of this paragraph shall, with the necessary modifications, apply also where a loss on the disposal accrues to one of them and the acquisition after the disposal is made by the other.

Subject to section 45(5) of the Finance Act 1965 and sub-paragraph (2) below, where an asset is disposed of and acquired under a contract the time at which the disposal and acquisition is made is the time the contract is made (and not, if different, the time at which the asset is conveyed or transferred). If the contract is conditional (and, in particular, if it is conditional on the exercise of an option) the time at which the disposal and acquisition is made is the time when the condition is satisfied.

Where an interest in land is acquired, otherwise than under a contract, by an authority possessing compulsory purchase powers the time at which the disposal and acquisition is made is the time at which the compensation for the acquisition is agreed or otherwise determined (variations on appeal being disregarded for this purpose) or, if earlier (but after 20th April 1971), the time when the authority enter on the land in pursuance of their powers.

In section 270 of the Income and Corporation Taxes Act 1970—

In section 271(4) of the Income and Corporation Taxes Act 1970 after the word “disposal” there shall be inserted the words " and the asset consists of securities of a description specified in section 41(8) of the Finance Act 1969 “and for the words ” the preceding provisions of this section “there shall be substituted the words ” the provisions of Schedule 10 to the Finance Act 1971 applying to such securities ".

In this Schedule “the principal section ” means section 57 of this Act.

Where, in the case of any individual, subsection (1) of the principal section applies in any year of assessment, or would apply if there were any, or sufficient, capital gains accruing to him, then if any allowable losses accrued to him in that year, they shall be treated for the purpose of applying section 20(4) of the Finance Act 1965 (deduction of allowable losses) in any subsequent year as reduced by the amount of the chargeable gains accruing to him in the year in which the losses accrued. Where in any year of assessment in which a married woman is living with her husband there is in the case of one but not in the case of the other an excess of allowable losses over chargeable gains the excess shall be treated for the said purpose as reduced by the amount by which the other's chargeable gains exceed the other's allowable losses.

In computing for the purposes of the principal section the amount or value of the consideration for a disposal made by any person there shall be deducted the incidental costs to him of making the disposal.

Where by virtue of section 29(1)(b) of the Finance Act 1970 (taxation of mineral royalties) a chargeable gain is treated as accruing to any person in any year of assessment the amount thereof shall be treated for the purposes of the principal section as consideration for a disposal made by him in that year.

If the consideration for any disposal is payable by instalments over a period exceeding eighteen months and beginning not earlier than the time when the disposal is made, then, for the purposes of the principal section, such part only of the consideration as is payable in the year of assessment in which the disposal is made shall be taken into account for that year, but any part payable in a subsequent year of assessment shall be deemed to be a consideration for a disposal made in that subsequent year.

Paragraph 14(5) of Schedule 6 to the Finance Act 1965 (consideration brought into account without discount etc.) shall apply for the purposes of the principal section as it applies for the computation under that Schedule.

Paragraph 14(2)(a) of Schedule 7 to the Finance Act 1965 (consideration for option) shall apply for the purposes of the principal section as it applies for the computation of chargeable gains.

For the purposes of the principal section the consideration for a disposal shall be disregarded if, under any provision— Where a disposal satisfies the following conditions, namely— then, if, apart from the disposal and any other disposal satisfying those conditions, the principal section would apply it shall, notwithstanding the disposal, apply for the purpose of determining whether any or what tax is chargeable in respect of disposals not satisfying those conditions but shall not affect the tax chargeable in respect of disposals satisfying those conditions.

Where by virtue of section 24 of the Finance Act 1965 a disposal is deemed to occur on the death (before 31st March 1971) of an individual, the consideration for that disposal shall be disregarded for the purposes of the principal section so far as that section relates to the tax chargeable apart from the death, but this paragraph shall not affect the tax chargeable in respect of the disposal deemed to occur on the death.

For subsection (1) of section 24 of the Finance Act 1965 there shall be substituted the following subsection:—.

At the end of subsection (9) of that section (construction of references to assets of which the deceased was competent to dispose) there shall be added the words “and include references to his severable share in any assets to which, immediately before his death, he was beneficially entitled as a joint tenant ”.

Notwithstanding section 22(4) of the Finance Act 1965 no chargeable gain shall accrue to any person on his making a disposal by way of donatio mortis causa.

In section 45(1) of the Finance Act 1965, in the definition of “legatee ”, for the words from “and a donatio ” to “gift” there shall be substituted the words " and a person taking under a donatio mortis causa shall be treated (except for the purposes of section 24 of this Act) as a legatee and his acquisition as made at the time of the donor's death ".

In sub-paragraph (2) of paragraph 20 of Schedule 7 to the Finance Act 1965 (which makes exceptions to the rule that neither a gain nor a loss accrues on a disposal between husband and wife) the following shall be substituted for paragraph (b)—.

Where, by virtue of subsection (3) of section 25 of the Finance Act 1965, the assets forming part of any settled property are deemed to be disposed of and re-acquired by the trustee on the occasion when a person becomes absolutely entitled thereto as against the trustee, then, if that occasion is the termination of a life interest (within the meaning of that section) by the death of the person entitled to that interest—

In section 25(4) of the Finance Act 1965 (notional disposal of all assets of settled property on termination of life interest in all or part of settled property) for the words “all the assets forming part of the settled property, except any which at that time cease to be settled property” there shall be substituted the words “the whole or a corresponding part of each of the assets forming part of the settled property and not ceasing at that time to be settled property ” and for the words “their market value ” there shall be substituted the words " the whole or a corresponding part of the market value of the asset. "

For the purposes of this subsection a life interest which is a right to part of the income of settled property shall be treated as a life interest in a corresponding part of the settled property

Where the said section 25(4) applies on the death of the person entitled to the life interest referred to therein, no chargeable gain shall accrue on the disposal deemed to be made under that section.

Subsections (3) and (4) of section 25 of the Finance Act 1965 shall apply, where an annuity which is not a life interest within the meaning of that section is terminated by the death of the annuitant, as they apply on the termination of a life interest by the death of the person entitled thereto.

Where a life interest (within the meaning of section 25 of the Finance Act 1965) in settled property is terminated by the death of a person on whose death estate duty falls to be charged on the property by virtue of section 2(1)(b) of the Finance Act 1894, then—

In section 25 of the Finance Act 1965 the following shall be inserted after subsection (4)—

Section 31(3)(b) of the Finance Act 1965 (concession on certain notional disposals of settled property) shall not apply in relation to a disposal on which by virtue of this Schedule no chargeable gain or allowable loss accrues to the trustee.

After section 25 of the Finance Act 1965 there shall be inserted the following section:— Section 42(3) of the Finance Act 1966 shall cease to have effect.

For section 26 of the Finance Act 1965 there shall be substituted the following section:—

In paragraph 10(2)(b) of Schedule 10 to the Finance Act 1966 for the words “disposed of by the deceased ” there shall be substituted the words “acquired by the persons on whom they devolve ”.

In paragraph 4 of Schedule 12 to the Finance Act 1968—

In paragraphs 11, 12, 14 and 15 of this Schedule references to estate duty include references to estate duty leviable under the law of Northern Ireland.