Finance Act 1987

SCHEDULES

SCHEDULE 1 U.K. Vehicles Excise Duty

Part I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F1 U.K.

Textual Amendments

F1 Sch. 1 Pts. I, II para. 3 repealed by Finance Act 1990 (c. 29, SIF 107:2), s. 132, Sch. 19 Pt. II (in relation to licences taken out after 20.3.1990)

Part II U.K. Recovery Vehicles

Interpretation U.K.

1 In this Part of this Schedule—

• “the 1971 Act” means the M1 Vehicles (Excise) Act 1971; and

• “the 1972 Act” means the M2 Vehicles (Excise) Act (Northern Ireland) 1972.

Marginal Citations

M1 1971 c. 10.

M2 1972 c. 10 (N.I.).

2 At the end of Part I of Schedule 3 to each of the 1971 Act and the 1972 Act there shall be added—

“8 (1) In this Schedule “recovery vehicle” means, subject to the provisions of this paragraph, a vehicle which is either constructed or permanently adapted primarily for the purposes of lifting, towing and transporting a disabled vehicle or for any one or more of those purposes.

(2) Subject to sub-paragraph (3) below, a vehicle which is constructed or permanently adapted as mentioned in sub-paragraph (1) above shall not be a recovery vehicle if at any time it is used for any purpose other than—

(a) the recovery of a disabled vehicle;

(b) the removal of a disabled vehicle from the place where it became disabled to premises at which it is to be repaired or scrapped;

(c) the removal of a disabled vehicle from premises to which it was taken for repair to other premises at which it is to be repaired or scrapped; and

(d) carrying any load other than fuel and other liquids required for its propulsion and tools and other articles required for the operation of or in connection with apparatus designed to lift, tow or transport a disabled vehicle.

(3) At any time when a vehicle is being used for purposes specified in paragraphs (a) and (b) of sub-paragraph (2) above, the following uses shall be disregarded in determining whether the vehicle is a recovery vehicle—

(a) use for the carriage of any person who immediately before a vehicle became disabled, was the driver of or a passenger in that vehicle;

(b) use for the carriage of any goods which, immediately before a vehicle became disabled, were being carried in the disabled vehicle; and

(c) use for any purpose prescribed for the purposes of this paragraph.”

3 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F2

Textual Amendments

F2 Sch. 1 Pts. I, II para. 3 repealed by Finance Act 1990 (c. 29, SIF 107:2), s. 132, Sch. 19 Pt. II (in relation to licences taken out after 20.3.1990)

4 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F3

Textual Amendments

F3 Sch. 1 Pt. II para. 4 repealed by Finance Act 1989 (c. 26, SIF 107:2), s. 187(1), Sch. 17 Pt. II (in relation to licences taken out after 14.3.1989)

Exclusion of recovery vehicles from trade licences U.K.

5 In section 16 of the 1971 Act (trade licences)—

(a) in subsection (1)(i) the words from “and all recovery vehicles” to “that business” shall be omitted;

(b) in paragraph (a) of the proviso to subsection (1) the words from “except” to “disabled vehicle” shall be omitted;

(c) in subsection (3) paragraph (b) shall be omitted and at the end of paragraph (e) there shall be added the words “other than a trailer which is for the time being a disabled vehicle”; and

(d) in subsection (8) the definition of “recovery vehicle shall” be omitted.

F4 6 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F4 Sch. 1 para. 6 repealed (1.10.1991) by Finance Act 1991 (c. 31, SIF 107:2), ss. 10, 123, Sch. 19 Pt.IV; S.I. 1991/2021, art.2.

Part III U.K. Miscellaneous Amendments

Introductory U.K.

7 In this Part of this Schedule—

• “the 1971 Act” means the M3 Vehicles (Excise) Act 1971; and

• “the 1972 Act” means the M4 Vehicles (Excise) Act (Northern Ireland) 1972.

Marginal Citations

M3 1971 c. 10.

M4 1972 c. 10 (N.I.).

Additional liability for evasion of duty U.K.

8 In section 9(3) of the 1971 Act (circumstances in which additional liability for keeping unlicensed vehicle not to be payable) paragraphs (b) and (c) (vehicles not used or kept on a public road and vehicles not chargeable with duty) shall be omitted.

F5 9 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F5 Sch. 1 para. 9 repealed (1.10.1991) by Finance Act 1991 (c. 31, SIF 107:2), ss. 10, 123, Sch. 19 Pt. IV; S.I. 1991/2021, art.2.

10 In section 18A(7) of the 1971 Act (circumstances in which additional liability in relation to alteration of vehicle or its use not be payable)—

(a) for paragraph (b) (vehicle neither used nor kept on public road) there shall be substituted the word “or”; and

(b) paragraph (d) (vehicle not chargeable with duty) and the word “or” immediately preceding it shall be omitted.

F6 11 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F6 Sch. 1 para. 11 repealed (1.10.1991) by Finance Act 1991 (c. 31, SIF 107:2), ss. 10, 123, Sch. 19 Pt. IV; S.I. 1991/2021, art.2.

12 In Part I of Schedule 7 to the 1971 Act (transitional modifications)—

(a) in paragraph 7, paragraph (b)(ii) shall be omitted and in paragraph (b)(iii) for the words “paragraphs (c) and (d)” there shall be substituted the words “paragraph (d)”; and

(b) in paragraph 17A, paragraph (b)(ii) shall be omitted and in paragraph (b)(iii) for the words “paragraphs (c) and (d)” and “paragraph (d)” there shall be substituted respectively the words “paragraph (c)” and “that paragraph”.

F7 13 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F7 Sch. 1 para. 13 repealed (1.10.1991) by Finance Act 1991 (c. 31, SIF 107:2), ss. 10, 123, Sch. 19 Pt. IV; S.I. 1991/2021, art.2.

Offences relating to trade licences U.K.

14 In section 16(7) of the 1971 Act (offences relating to trade licences) after the words “keeping on a road” there shall be inserted “in any circumstances other than such circumstances as may have been prescribed under paragraph (c) of the proviso to subsection (1) above”.

F8 15 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F8 Sch. 1 para. 15 repealed (1.10.1991) by Finance Act 1991 (c. 31, SIF 107:2), ss. 10, 123, Sch. 19 Pt.IV; S.I. 1991/2021, art.2.

Regulations concerning transfer etc. of vehicles U.K.

16 (1) Section 23 of the 1971 Act (regulations with respect to the transfer and identification of vehicles) shall be amended as follows.

(2) In paragraph (e) (inspection and surrender of registration documents) after the word “inspection” there shall be inserted the word “, transfer”.

(3) In that section as set out in paragraph 20 of Part I of Schedule 7 to the Act—

(a) in subsection (1)(c) (requirements on person to whom vehicle transferred to furnish particulars) after the word “person” there shall be inserted the words “by whom or”; and

(b) in subsection (1)(d) (issue, surrender etc. of registration books) before the word “surrender” there shall be inserted the word “transfer”.

(4) Regulation 12(1) of the M5 Road Vehicles (Registration and Licensing) Regulations 1971 shall have effect on and after the day on which this paragraph comes into force as if sub-paragraph (3) above had been in force when that regulation was made.

Marginal Citations

M5 S.I. 1971/450.

F9 17 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F9 Sch. 1 para. 17 repealed (1.10.1991) by Finance Act 1991 (c. 31, SIF 107:2), ss. 10, 123, Sch. 19 Pt. IV; S.I. 1991/2021, art.2.

Increase of certain penalties for offences under regulations U.K.

18 (1) Section 37 of the 1971 Act (regulations) shall be amended as follows.

(2) For paragraph (a) of subsection (3) (fine of level 3 on the standard scale on conviction for offences against certain regulations) there shall be substituted—

“(a) in the case of regulations prescribed for the purposes of this paragraph, of regulations made under section 24 or of a contravention or failure to comply with requirements imposed in pursuance of section 23(a) above, level 3 on the standard scale;”;

(3) After that subsection there shall be inserted—

“(3A) The prescribing of regulations for the purposes of subsection (3)(a) above shall not affect the punishment for a contravention of or a failure to comply with those regulations before they were so prescribed.”.

(4) For subsection (3) of that section as set out in paragraph 24 of Part I of Schedule 7 to the Act there shall be substituted—

“(3) Any person who contravenes or fails to comply with anyregulations under this Act (other than regulations under section 2(5), 11(3), 14, 20 or 24) shall be guilty of an offence and liable on summary conviction—

(a) in the case of regulations prescribed for the purposes of this paragraph, to a fine not exceeding level 3 on the standard scale; and

(b) in any other case, to a fine not exceeding level 2 on the standard scale.

(3A) Regulations under section 14, 20 or 24 above may provide that a person who contravenes or fails to comply with any specified provision of the regulations shall be guilty of an offence and a person guilty of such an offence shall be liable on summary conviction—

(a) in the case of regulations under section 14 or 20, to a fine not exceeding level 1 on the standard scale; and

(b) in the case of regulations under section 24, to a fine not exceeding level 3 on the standard scale.

(3B) The prescribing of regulations for the purposes of sub-section (3)(a) above shall not affect the punishment for a contravention of or failure to comply with those regulations before they were so prescribed.”

F10 19 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F10 Sch. 1 para. 19 repealed (1.10.1991) by Finance Act 1991 (c. 31, SIF 107:2), ss. 10, 123, Sch. 19 Pt.IV; S.I. 1991/2021, art.2.

Dishonoured cheques U.K.

20 U.K. In subsection (3) of section 102 of the M6 Customs and Excise Management Act 1979 (penalty for failure to deliver up excise licence following dishonour of cheque) after paragraph (a) there shall be inserted the following paragraph—

“(aa) where the licence is a licence under the Vehicles (Excise) Act 1971, a penalty of whichever is the greater of—

(i) level 3 on the standard scale, or

(ii) an amount equal to five times the annual rate of duty that was payable on the grant of the licence or would have been so payable if it had been taken out for a period of twelve months.”

Marginal Citations

M6 1979 c. 2.

F11 21 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F11 Sch. 1 para. 21 repealed (1.10.1991) by Finance Act 1991 (c. 31, SIF 107:2), ss. 10, 123, Sch. 19 Pt. IV; S.I. 1991/2021, art.2.

Section 19(2).

SCHEDULE 2 U.K. Amendments of Value Added Tax Act 1983

Supplies received from abroad U.K.

1 Section 7 of the principal Act (reverse charge on supplies received from abroad) shall be amended as follows—

(a) in paragraph (b) of subsection (1), for the words “taxable person” there shall be substitiuted “person (in this section referred to as “the recipient”)”;

(b) in subsection (1), in the words following paragraph (b) for the words “as if the taxable person” there shall be substituted “as if the recipient”;

(c) in subsections (3) and (4) for the words “taxable person” there shall be substituted “recipient”; and

(d) in subsection (3) for the words “the allowance” there shall be substituted “any allowance”.

F12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.K.

2

Textual Amendments

F12 Sch. 2 para. 2 repealed by Finance Act 1990 (c. 29, SIF 40:2), s. 132, Sch. 19 Pt. III Note 3

Transfers of going concerns U.K.

3 In section 33 of the principal Act (transfers of going concerns), after subsection (1) there shall be inserted—

“(1A) Where the transferee is liable to be registered by virtue of paragraph 1(1)(b) of Schedule 1 to this Act at the time the business is transferred, paragraph 4(2) of that Schedule shall not apply but the Commissioners shall register him with effect from that time.”.

Appeals U.K.

4 In section 40(1) of the principal Act (appeals) for paragraph (d) there shall be substituted—

“(d) the proportion of input tax allowable under section 15 above”.

SCHEDULES 3–6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F13 U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F13 Schs. 3–6 repealed by Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), s. 844, Sch. 31

Section 56.

SCHEDULE 7 U.K. Stamp Duty Reserve Tax

1 U.K. Part IV of the Finance Act 1986 F14 shall be amended in accordance with the following provisions of this Schedule.

Textual Amendments

F14 1986 c. 41.

Principal charge U.K.

2 (1) In section 87, after subsection (7) there shall be inserted — U.K.

“(7A) Where there would be no charge to tax under this section 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 shall have effect as if such separate agreements had been made.

(7B) 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.”.

(2) This paragraph shall be deemed always to have had effect.

Renounceable letters of allotment, etc. U.K.

3 (1) In section 88(3)(a), after the words “subsection (2)” there shall be inserted the words “the words 'the expiry of the period of two months beginning with' and”. U.K.

(2) This paragraph shall have effect in relation to agreements made on or after 1st August 1987.

Market makers in options U.K.

4 (1) In section 89, after subsection (1) there shall be inserted —

“(1A) 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 in the ordinary course of his business as a market maker in securities consisting of related quoted options; and in this subsection —

(a) “quoted options” means options quoted on The Stock Exchange, and

(b) “related quoted options” means quoted options to buy or sell securities of the kind transferred.”

(2) This paragraph shall be deemed always to have had effect.

Clearance services U.K.

5 (1) In section 90, for subsection (5) there shall be substituted — U.K.

“(5) 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.

(6) A person is within this subsection if his business is exclusively that of holding shares, stock or other marketable securities —

(a) 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

(b) 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 .”

(2) This paragraph shall be deemed always to have had effect.

Commencement Information

I1 1891 c. 39.

Charities etc. U.K.

6 (1) In section 90, at the end there shall be added — U.K.

“(7) Section 87 above shall not apply as regards an agreement to transfer securities to —

(a) a body of persons established for charitable purposes only, or

(b) the trustees of a trust so established, or

(c) the Trustees of the National Heritage Memorial Fund, or

(d) the Historic Buildings and Monuments Commission for England.”

(2) This paragraph shall be deemed always to have had effect.

Interest on tax repayments U.K.

7 (1) In section 92, after subsection (4) there shall be inserted — U.K.

“(4A) Interest paid under subsection (2) above shall not constitute income for any tax purposes.”

(2) This paragraph shall be deemed always to have had effect.

Section 58.

SCHEDULE 8 U.K. Securities, Other Business Property and Agricultural Property

1 U.K. In section 10 of the 1984 Act (dispositions not intended to confer gratuitous benefit) in subsection (2) for the words from “shares” to “stock exchange” there shall be substituted “ unquoted shares or unquoted debentures ”.

2 U.K. In section 98 of the 1984 Act (effect of alterations of capital, etc.) in subsection (1)—

(a) in paragraph (a) for the words from “shares” onwards there shall be substituted “ quoted shares or quoted securities ”;

(b) in paragraph (b) for the words from “shares” onwards there shall be substituted “ unquoted shares in or unquoted debentures of a close company ”; and

(c) for the words “shares or debentures not so quoted” there shall be substituted “ unquoted shares or unquoted debentures ”.

3 U.K. In section 100 of the 1984 Act (alterations of capital where participators are trustees) in subsection (1)(c) for the words from “shares” onwards there shall be substituted “ unquoted shares in or unquoted securities of the close company ”.

4 U.K. In section 104 of the 1984 Act (relief for business property) in subsection (1)(a) for the words “or (b)” there shall be substituted “ (b) or (bb) ”.

5 (1) Section 105 of the 1984 Act (relevant business property) shall be amended as follows.

(2) In subsection (1) after the words “sections 106, 108,” there shall be inserted “109A” and for paragraph (c) there shall be substituted the following paragraphs—

“(bb) unquoted shares in a company which do not fall within paragraph (b) above and which immediately before the transfer satisfied the condition specified in subsection (1A) below;

(c) unquoted shares in a company which do not fall within paragraph (b) or paragraph (bb) above”.

(3) After subsection (1) there shall be inserted the following subsections—

“(1A) The condition referred to in subsection (1)(bb) above is that the shares (either by themselves or together with other shares or securities owned by the transferor) gave the transferor control of powers of voting on all questions affecting the company as a whole which if exercised would have yielded more than 25 per cent. of the votes capable of being exercised on them; and shares shall be taken to satisfy this condition if, together with any shares which are related property within the meaning of section 161 below, they would have been sufficient to give the transferor such control.

(1B) Subsections (3) and (4) of section 269 below have effect in relation to subsection (1A) above as they have effect in relation to subsection (1) of that section.”

(4) After subsection (2) there shall be inserted the following subsection—

“(2A) Shares of a company do not fall within subsection (1)(bb) above if—

(a) they would not have been sufficient, without other property, to satisfy the condition specified in subsection (1A) above immediately before the transfer; and

(b) their value is taken by virtue of section 176 below to be less than the value previously determined.”

6 In section 107 of the 1984 Act (replacements) in subsection (4)—

(a) for the words “section 105(1)(bb)(c)” there shall be substituted “section 105(1)(bb) or (c)”; and

(b) after the words “section 106 above” there shall be inserted “and section 109A below”.

7 After section 109 of the 1984 Act there shall be inserted the following section—

“109A Additional requirement in case of minority shareholdings.

Shares in a company do not fall within subsection (1)(bb) of section 105 above unless the condition specified in subsection (1A) of that section was satisfied—

(a) throughout the two years immediately preceding the transfer, or

(b) where section 108 or section 109 above applies and the transferor owned the shares for a period of less than two years immediately preceding the transfer, throughout that lesser period.”

8 (1) In section 113A of the 1984 Act (application of relief for business property to transfers made within seven years before death of transferor) in subsection (3) at the beginning of paragraph (b) there shall be inserted the words “ except to the extent that the original property consists of shares or securities to which subsection (3A) below applies ”. U.K.

(2) After subsection (3) of that section there shall be inserted the following subsection—

“(3A) This subsection applies to shares or securities—

(a) which were quoted at the time of the chargeable transfer referred to in subsection (1) or subsection (2) above; or

(b) which fell within paragraph (b) of section 105(1) above in relation to that transfer and were unquoted throughout the period referred to in subsection (3)(a) above.”

9 U.K. In section 124A of the 1984 Act (application of agricultural relief to transfers within seven years before death of transferor) in subsection (6) for the words following paragraph (b) there shall be substituted “ his period of ownership of the original property shall be treated as including his period of ownership of the shares. ”

10 U.K. In section 136 of the 1984 Act (transactions of close companies) in subsection (1)(b) for the words “shares quoted on a recognised stock exchange” there shall be substituted “ quoted shares ” and for the words “shares in or debentures of the company which are not so quoted” there shall be substituted “ unquoted shares in or unquoted debentures of the company ”.

11 U.K. In section 140(2) of the 1984 Act (market value for purposes of Chapter IV of Part IV) in paragraph (b) for the words from “shares” to “exchange” there shall be substituted “ unquoted shares ”.

12 (1) In section 168 of the 1984 Act (unquoted shares and securities) in subsection (1) before the word “securities” where it first occurs, there shall be inserted “ unquoted ”. U.K.

(2) Subsection (2) of that section shall be omitted.

13 (1) In section 178 of the 1984 Act (sale of shares etc. from deceased’s estate) in subsection (1), in the definition of “qualifying investments”, for the words from “at the date” to “exchange” there shall be substituted “ are quoted at the date of the death in question ”. U.K.

(2) In subsection (2) of that section—

(a) after the words “quotation on a recognised stock exchange” there shall be inserted “ or dealing in the Unlisted Securities Market ”, and

(b) the words “on a recognised stock exchange”, in the second place where they occur, shall be omitted.

14 U.K. In section 180 of the 1984 Act (effect of purchases) in subsection (3) after the word “exchange” there shall be inserted “ or separately dealt in on the Unlisted Securities Market ”.

15 (1) In section 227 of the 1984 Act (payment by instalments) for subsection (1A) there shall be substituted the following subsection— U.K.

“(1A) Subsection (1) above does not apply to—

(a) tax payable on the value transferred by a potentially exempt transfer which proves to be a chargeable transfer, or

(b) additional tax becoming payable on the value transferred by any chargeable transfer by reason of the transferor’s death within seven years of the transfer,except to the extent that the tax is attributable to the value of property which satisfies one of the conditions specified in subsection (1C) below and, in the case of property consisting of unquoted shares or unquoted securities, the further condition specified in section 228(3A) below.”

(2) In subsection (1B) of that section for the words “subsection (1A) above” there shall be substituted “ this section ”.

(3) After subsection (1B) of that section there shall be inserted the following subsection—

“(1C) The conditions referred to in subsection (1A) above are—

(a) that the property was owned by the transferee throughout the period beginning with the date of the chargeable transfer and ending with the death of the transferor (or, if earlier, the death of the transferee), or

(b) that for the purposes of determining the tax, or additional tax, due by reason of the death of the transferor, the value of the property is reduced in accordance with the provisions of Chapter I or Chapter II of Part V of this Act by virtue of section 113B or section 124B above.”

16 (1) In section 228 of the 1984 Act (shares etc. within section 227) in subsection (1) for the words “not falling under paragraph (a) above and not quoted on a recognised stock exchange”, in each place where they occur, there shall be substituted “ which do not fall under paragraph (a) above and are unquoted ”. U.K.

(2) After subsection (3) of that section there shall be inserted the following subsection—

“(3A) The further condition referred to in section 227(1A) above is that the shares or securities remained unquoted throughout the period beginning with the date of the chargeable transfer and ending with the death of the transferor (or if earlier, the death of the transferee).”

17 U.K. In section 272 of the 1984 Act (general interpretation) after the definition of “purchaser” there shall be inserted—

““quoted”, in relation to any shares or securities, means quoted on a recognised stock exchange or dealt in on the Unlisted Securities Market and “unquoted”, in relation to any shares or securities, means neither so quoted nor so dealt in”.

18 (1) In Schedule 20 to the M7 Finance Act 1986 (gifts with reservation) paragraph 8 (agricultural and business property) shall be amended as follows. U.K.

(2) In sub-paragraph (1) for the word “Where” there shall be substituted “ This paragraph applies where ” and the words from “then” onwards shall be omitted.

(3) After sub-paragraph (1) there shall be inserted the following sub-paragraph—

“(1A) Where this paragraph applies—

(a) any question whether, on the material transfer of value, any shares or securities fall within paragraph (b) or paragraph (bb) of section 105(1) of the 1984 Act (which specify shares and securities qualifying for 50 per cent. relief) shall be determined, subject to the following provisions of this paragraph, as if the shares or securities were owned by the donor and had been owned by him since the disposal by way of gift; and

(b) subject to paragraph (a) above, any question whether, on the material transfer of value, relief is available by virtue of Chapter I or Chapter II of Part V of the 1984 Act and, if relief is available by virtue of Chapter II, what is the appropriate percentage for that relief, shall be determined, subject to the following provisions of this paragraph, as if, so far as it is attributable to the property comprised in the gift, that transfer were a transfer of value by the donee.”

(4) In sub-paragraph (2) for the words “sub-paragraph (1)” there shall be substituted “ sub-paragraph (1A)(b) ”.

(5) In sub-paragraph (3)—

(a) for the words “that sub-paragraph shall not apply” there shall be substituted “ relief shall not be available by virtue of Chapter II of Part V of the 1984 Act on the material transfer of value ”; and

(b) for the words “by virtue of sub-paragraph (1) above” there shall be substituted “ by virtue of sub-paragraph (1A)(b) above ”.

Marginal Citations

M7 1986 c. 41.

Section 59.

SCHEDULE 9 U.K. Maintenance Funds for Historic Buildings etc.

1 U.K. The following section shall be inserted after section 57 of the M8 Inheritance Tax Act 1984—

“57A Relief where property enters maintenance fund.

(1) Subject to the following provisions, subsection (2) below applies where—

(a) a person dies who immediately before his death was beneficially entitled to an interest in possession in property comprised in a settlement, and

(b) within two years after his death the property becomes held on trusts (whether of that or another settlement) by virtue of which a direction under paragraph 1 of Schedule 4 to this Act is given in respect of the property.

(2) Where this subsection applies, this Act shall have effect as if the property had on the death of the deceased become subject to the trusts referred to in subsection (1)(b) above; and accordingly no disposition or other event occurring between the date of the death and the date on which the property becomes subject to those trusts shall, so far as it relates to the property, be a transfer of value or otherwise constitute an occasion for a charge to tax.

(3) Where property becomes held on trusts of the kind specified in paragraph (b) of subsection (1) above as the result of proceedings before a court and could not have become so held without such proceedings, that paragraph shall have effect as if it referred to three years instead of two.

(4) Subsection (2) above shall not apply if—

(a) the disposition by which the property becomes held on the trusts referred to in subsection (1)(b) above depends on a condition or is defeasible; or

(b) the property which becomes held on those trusts is itself an interest in settled property; or

(c) the trustees who hold the property on those trusts have, for a consideration in money or money’s worth, acquired an interest under a settlement in which the property was comprised immediately before the death of the person referred to in subsection (1)(a) above or at any time thereafter; or

(d) the property which becomes held on those trusts does so for a consideration in money or money’s worth, or is acquired by the trustees for such a consideration, or has at any time since the death of the person referred to in subsection (1)(a) above been acquired by any other person for such a consideration.

(5) If the value of the property when it becomes held on the trusts referred to in subsection (1)(b) above is lower than so much of the value transferred on the death of the person referred to in subsection (1)(a) as is attributable to the property, subsection (2) above shall apply to the property only to the extent of the lower value.

(6) For the purposes of this section, a person shall be treated as acquiring property for a consideration in money or money’s worth if he becomes entitled to it as a result of transactions which include a disposition for such consideration (whether to him or another) of that or other property.”.

Marginal Citations

M8 1984 c. 51.

2 U.K. At the end of paragraph 3 of Schedule 4 to the 1984 Act there shall be added—

“(5A) In the case of property which, if a direction is given under paragraph 1 above, will be property to which paragraph 15A below applies, sub-paragraph (1)(b) above shall have effect as if for the reference to the settlor there were substituted a reference to either the settlor or the person referred to in paragraph 15A(2).”.

3 U.K. After paragraph 15 of that Schedule there shall be inserted—

“ Maintenance fund following interest in possession U.K.

15A (1) In relation to settled property to which this paragraph applies, the provisions of this Part of this Schedule shall have effect with the modifications set out in the following sub-paragraphs.

(2) This paragraph applies to property which become property to which paragraph 8 above applies on the occasion of a transfer of value which was made by a person beneficially entitled to an interest in possession in the property, and which (so far as the value transferred by it was attributable to the property)—

(a) was an exempt transfer by virtue of the combined effect of either—

(i) sections 27 and 57(5) of this Act, or

(ii) sections 27 and 57A of this Act, and

(b) would but for those sections have been a chargeable transfer;

and in the following sub-paragraphs “the person entitled to the interest in possession” means the person above referred to.

(3) Paragraph 9(2) shall have effect as if for the reference to the settlor there were substituted a reference to either the settlor or the person entitled to the interest in possession.

(4) Paragraph 10 shall not apply if the person entitled to the interest in possession had died at or before the time when the property become property to which paragraph 8 above applies; and in any other case shall have effect with the substitution in sub-paragraph (1) of the following words for the words from “on becoming”—

(a) on becoming property to which the person entitled to the interest in possession is beneficially entitled, or

(b) on becoming—

(i) property to which that person’s spouse is beneficilly entitled, or

(ii) property to which that person’s widow or widower is beneficially entitled if that person has died in the two years preceding the time when it becomes such property;

but paragraph (b) above applies only where the spouse, widow or widower would have become beneficially entitled to the property on the termination of the interest in possession had the property not then become property to which paragraph 8 above applies.

(5) Paragraph 11 shall not apply.

(6) Sub-paragraphs (1) to (3) of paragraph 14 shall have effect as if for the references to the settlor there were substituted references to the person entitled to the interest in possession.

(7) Sub-paragraph (4) of paragraph 14 shall have effect with the insertion after paragraph (b) of the words “and(c) was, in relation to either of those settlements, property to which paragraph 15A below applied,”,

and with the substitution for the words from “settlor shall” onwards of the words “person entitled to the interest in possession shall, if the Board so determine, be construed as references to the person who was the settlor in relation to the current settlement.”.

(8) Sub-paragraph (5) of paragraph 14 shall have effect with the insertion after paragraph (b) of the words “and (c) was, in relation to any of those settlements, property to which paragraph 15A below applied,”,

and with the substitution for the words from “settlor shall” onwards of the words “person entitled to the interest in possession shall, if the Board so determine,be construed as references to any person selected by them who was the settlor in relation to any of the previous settlements or the current settlement.”

(9) Except in a case where the Board have made a determination under sub-paragraph (4) or (5) of paragraph 14, sub-paragraphs (6) and (7) of that paragraph shall have effect as if for the references to the settlor there were substituted references to the person entitled to the interest in possession.

(10) Sub-paragraph (9) of paragraph 14 shall have effect with the substitution for the words “(if the settlement was made on death)” of the words “ (if the person entitled to the interest in possession had died at or before the time when the property became property to which paragraph 8 applies) ”.”

4 U.K. Paragraph 1 above shall have effect in relation to deaths occurring on or after 17th March 1987.

5 U.K. Paragraph 2 above shall have effect in relation to directions given on or after 17th March 1987.

6 U.K. Paragraph 3 above shall have effect where the occasion of the charge or potential charge to tax under paragraph 8 of Schedule 4 to the 1984 Act falls on or after 17th March 1987.

SCHEDULE 10 U.K. Nomination Scheme for Disposals and Appropriation

Modifications etc. (not altering text)

C1 For regulations supplementing and modifying Sch. 10 for certain cases see Part III (under “Petroleum Revenue Tax: nomination scheme for disposals and appropriations”)

Interpretation U.K.

1 (1) In this Schedule— U.K.

• “month” means calendar month;

• “nominal volume” shall be construed in accordance with paragraph 7 below;

• “nominated price” shall be construed in accordance with paragraph 6 below;

• “nominated” means a nomination made in such manner as may be prescribed by regulations made by the Board;

• “proposed sale”, “proposed supply” and “proposed appropriations” shall be construed in accordance with paragraphs (a) to (c) of sub-paragraph (1) of paragraph 2 below;

• “proposed delivery month” shall be construed in accordance with paragraph 3 below;

• “proposed transaction” means one falling within paragraph 2(1) below;

• “regulations made by the Board” means regulations under section 61(8) of this Act; and

• “Treasury regulations” means regulations under 61(7) of this Act.

(2) For the purposes of this Schedule, a particpator’s equity production from an oil field in any month is his share of the oil won from the field which, in that month, is either delivered or relevantly appropriated, other than oil which is delivered to the Secretary of State pursuant to a notice served by him.

[F15 (3) Where an amount of oil is required to be delivered to the Secretary of State pursuant to a notice served by him, any oil which is inadvertently delivered to him in excess of the amount required shall be treated for the purposes of sub-paragraph (2) above as delivered pursuant to the notice.]

Textual Amendments

F15 Finance (No. 2) Act 1987 (c. 51, SIF 63:1), s. 101(1)(5) and Sch. 8 para. 1 for calendar months in chargeable periods beginning with March 1987

Transactions which may be nominated U.K.

2 (1) The proposed transactions which may be nominated by a participator in an oil field for the purposes of this Schedule are— U.K.

(a) proposed sales at arms’s length by the participator of specified quantities of oil for delivery from that oil field; and

(b) proposed supplies by the participator (being a company) to another company which is associated with the participator of specified quantities of oil for delivery from that oil field for use for refining either by that other company or by a third company associated with the participator; and

(c) proposed relevant appropriations by the participator of specified quantities of oil won from that field; and

(d) any other proposed transactions specified for the purposes of this sub-paragraph by Treasury regulations;

and two companies are associated with each other for the purposes of paragraph (b) above if they would be so associated for the purposes of section 115(2) of the M9 Finance Act 1984.

(2) Where a proposed sale is nominated before a contract of sale comes into being, any reference in this Schedule to the contract of sale is a reference to the subsequent contract for the sale of oil in accordance with the terms of the nomination; and, accordingly, if no such contract of sale comes into being, the nomination of the proposed sale shall be of no effect.

(3) A particpator may not nominate a proposed sale if—

(a) under the terms of the contract of sale as orginally entered into, the party undertaking to sell the oil is someone other than the participator; or

(b) it is of a description prescibed for the purposes of this sub-paragraph by regulations made by the board.

Modifications etc. (not altering text)

C2 See S.I. 1987 No. 1338 (in Part III) regns. 4–6—composite nominations

Marginal Citations

M9 1984 c. 43.

Period for which nomination has effect U.K.

3 (1) Subject to sub-paragraph (3) below, a nomination shall have effect with respect to proposed deliveries and appropriations of oil in one month only and, accordingly, where a nomination is of a proposed sale and the contract of sale provides for the supply of oil in more than one month, the nominations shall be effective only in relation to oil proposed to be delivered in the month for which the nomination has effect. U.K.

(2) Subject to sub-paragraph (3) below, in relation to a nomination, “the proposed delivery month” means the month for which the nomination has effect in accordance with sub-paragraph (1) above.

(3) In relation to a contract of sale of a description specified in the regulations, regulations made by the Board may permit a nomination of a proposed sale for each of a number of months and, in relation to such a nomination, this Schedule shall have effect subject to such modifications as may be prescribed in the regulations.

Timing of nominations U.K.

4 (1) Subject to sub-paragraph (2) below, a nomination shall be effective only if it is made not later than five o’clock in the afternoon of the second business day following the date which in relation to a proposed transaction of that description, is prescribed as the transaction base date.

(2) Sub-paragraph (1) above does not apply to a nomination made on or before 16th February 1987 which specified a proposed transaction having a transaction base date earlier than 12th February 1987.

(3) The transaction base date prescribed for a proposed sale may be a date earlier than the date on which a legally binding agreement for the sale of the oil in question comes into being but may not be later than the date on which there is an agreed price at which any oil which is to be delivered pursuant to the contract of sale will be sold.

(4) In this paragraph—

(a) “business day” has the same meaning as in the M10 Bills of Exchange Act 1882;

(b) “prescribed” means perscribed by regulations made by the Board.

Modifications etc. (not altering text)

C3 See S.I. 1987 No. 1338 (in Part III) regns. 7 and 8 for prescription of the transaction base date for various purposes

Marginal Citations

M10 1882 c. 61.

Content of nomination U.K.

5 (1) A nomination of a proposed transaction shall not be effective unless it specifies, with respect to that transaction,— U.K.

(a) the name of the participator;

(b) [F16 in the case of a proposed sale], the name of the person to whom the oil is to be [F16 sold];

(c) the field from which the oil is to be delivered or relevantly appropriated;

(d) the nominated price of the oil to be supplied or relevantly appropriated;

(e) the nominal volume of that oil;

(f) the proposed delivery month;

(g) the transaction base date; and

(h) such other information as may be prescribed by the Board.

(2) A nomination shall include a declaration that it is correct and complete and, in the case of a nomination of a proposed sale which is made before the contract of sale comes into being, shall also include a declaration that, to the best of the knowledge and belief of the participator making the nomination, a contract of sale will come into being in accordance with the terms of the nomination.

(3) Where a participator fraudently or negligently furnishes any incorrect information or makes any incorrect declaration in or in connection with a nomination he shall be liable to a penalty not exceeding £50,000 or, in the case of fraud, £100,000 [F17 and the nomination shall not be effective].

Textual Amendments

F16 Finance (No. 2) Act 1987 (c. 51, SIF 63:1), s. 101(1)(5) and Sch. 8 para. 2(1) for calendar months in chargeable periods beginning with March 1987

F17 Finance (No. 2) Act 1987 (c. 51, SIF 63:1), s. 101(1)(5) and Sch. 8 para. 2(2) for calendar months in chargeable periods beginning with March 1987

Modifications etc. (not altering text)

C4 See S.I. 1987 No. 1338 (in Part III) regn. 3 for the manner of making nominations and regns. 6 and 20 for the modification of para. 5(1) in the case of composite nominations and blended oil respectively

Nominated price U.K.

6 (1) Subject to sub-paragraph (3) below, in the case of a proposed sale, the “nominated price”, in relation to the oil which is to be delivered pursuant to the sale, is the price specified in the contract of sale (expressed as a unit price) or, as the case may be, the formula under which, in accordance with the contract, the price for that oil (as so expressed) is to be determined. U.K.

(2) Subject to sub-paragraph (3) below, in the case of a proposed supply or proposed appropriation, the “nominated price” of the oil concerned means the market value of that oil, ascertained in accordance with Schedule 3 to the principal Act and expressed as a unit price; and for the purposes of paragraph 5(d) above a statement that the nominated price of oil is its “market value” shall be sufficient.

(3) Treasury regulations may—

(a) vary the meaning of “nominated price” in relation to a proposed sale, supply or appropriation and, for that purpose, amend sub-paragraph (1) or sub-paragraph (2) above; and

(b) make provision as to the meaning of “nominated price” in relation to a proposed transaction falling within paragraph 2(1)(d) above.

Modifications etc. (not altering text)

C5 See S.I. 1987 No. 1338 (in Part III) regn. 18 for conversion of nominated price into sterling

Nominal volume U.K.

7 (1) Subject to sub-paragraph (3) below, in the case of a proposed sale, the nominal volume means the quantity of oil which it is proposed should be delivered under the contract of sale in the proposed delivery month. U.K.

(2) Subject to sub-paragraph (3) below, in the case of a proposed supply or proposed appropriation, the nominal volume means the quantity of oil which the participator making the nomination proposes to supply or relevantly appropriate (as the case may be) in the proposed delivery month.

(3) In the case of any proposed transaction, the nominal volume means the quantity of oil expressed in such manner as may be prescribed by regulations made by the Board.

(4) In any case where—

(a) apart from this sub-paragraph, the nominal volume in any proposed transaction would be expressed as a specific volume of oil, plus or minus a particular tolerance, and

(b) that tolerance exceeds the limits prescribed for the purposes of this Schedule by regulations made by the Board,

the nominal volume shall for those purposes be taken to be the specific volume referred to in paragraph (a) above, plus or minus the maximum tolerance permitted by the regulations.

(5) Where a nominal volume is expressed as a specific volume of oil, plus or minus a tolerance, any reference in paragraph 9 below to the maximum nominal volume or the minimum nominal volume is a reference to that specific volume of oil, plus or minus the tolerance respectively.

Modifications etc. (not altering text)

C6 See S.I. 1987 No. 1338 (in Part III) regn. 9

Revision of nominations U.K.

8 (1) Except as provided by this paragraph, a nomination may not be amended or withdrawn. U.K.

(2) If a participator who has made a nomination of a proposed sale does not, in whole or in part, fulfil his obligations under the contract of sale by the delivery of oil forming part of his equity production for the proposed delivery month, then, in accordance with regulations made by the Board, he may amend or withdraw the nomination if in his opinion—

(a) there was good commercial reasons for the failure to fulfil those obligations; or

(b) the failure was occasioned by circumstances over which neither he nor any person connected or associated with him had control.

[F18 (2A) If a participator who has made a nomination of a proposed supply, proposed appropriation or a proposed transaction falling within paragraph 2(1)(d) above fails, in whole or in part, to supply, to appropriate or otherwise to complete the proposed transaction by the delivery or appropriation of oil forming part of his equity production for the proposed delivery month, then, in accordance with regulations made by the Board, he may amend or withdraw the nomination as mentioned in sub-paragraph (2B) below.

(2B) The circumstances in which, in a case falling within sub-paragraph (2A) above, a participator may amend or withdraw a nomination are,—

(a) in the case of a nomination of a proposed supply or proposed appropriation, if the participator is of the opinion that the failure referred to in that sub-paragraph was caused by circumstances over which neither he nor any person connected or associated with him had control; or

(b) in the case of a nomination of a proposed transaction falling within paragraph 2(1)(d) above, in such circumstances as may be prescribed by regulations made by the Board; or

(c) in any case where the nomination is of a proposed supply or proposed appropriation and the participator is either the field operator or the operator of a relevant system, if the participator is of the opinion that the failure referred to in sub-paragraph (2A) above was caused by action necessarily taken by him in the interests of safety or the prevention of pollution or in accordance with good oil field practice.

(2C) In relation to such a nomination as is referred to in subparagraph (2B)(c) above,—

(a) a participator is the field operator if, in relation to the field specified in the nomination, he is the person having the function of organising or supervising operations for searching or boring for or getting oil in pursuance of a licence; and

(b) the expression “relevant system” is applicable only where the oil to which the nomination relates is blended oil and is a reference to any system by which blended oil (in relation to which the field specified in the nomination is one of the originating fields) is transported, treated or stored prior to its disposal or relevant appropriation; and

(c) a participator in an oil field is an operator of a relevant system, as defined above, if he is the person charged, or principally charged, with the operation of the system;

and expressions used in paragraph (b) above have the same meaning as in section 63 of this Act.]

(3) An amendment or withdrawal of a nomination by a participator in accordance with [F18 the preceding provisions of this paragraph] above shall not be effective unless the Board give notice to the participator that the amendment or withdrawal is accepted, and the Board shall not give such a notice unless they are satisfied—

(a) as to the matters mentioned in either paragraph (a) or paragraph (b) of sub-paragraph (2) above [F18 or, where sub-paragraph (2B) above applies, that the failure was caused as mentioned in paragraph (a) or paragraph (c) of that sub-paragraph or that the circumstances prescribed for the purposes of paragraph (b) of that sub-paragraph exist]; and

(b) [F18 except where sub-paragraph (2)(b) or sub-paragraph (2B)(a)] above applies, that the failure was not part of a scheme or arrangement the main purpose of which was the avoidance of tax.

(4) For the purposes of sub-paragraph (2)(b) [F19 and sub-paragraph (2B)] above,—

(a) section [F19 839] of the Taxes Act (connected persons) applies; and

(b) two companies of which one is a participator in an oil field are associated with each other if one has control over the other or both are under the control of the same person or persons;

and in paragraph (b) above “control” shall be construed in accordance with section [F19 416] of the Taxes Act.

(5) Where a nomination is amended in accordance with this paragraph, the [F18 provisions of this Schedule (other than this paragraph)] shall apply in relation to it subject to such modifications as may be specified in regulations made by the Board.

Textual Amendments

F18 Finance (No. 2) Act 1987 (c. 51, SIF 63:1), s. 101(1)(5) and Sch. 8 para. 3 for calendar months in chargeable periods beginning with March 1987

F19 Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), Sch. 29 para. 32

Modifications etc. (not altering text)

C7 See S.I. 1987 No. 1338 (in Part III) regns. 11–17

Effective volume for nominated transactions U.K.

9 (1) The provisions of this paragraph have effect to determine, in relation to each nominated transaction, what is the effective volume of oil. U.K.

(2) In relation to a proposed sale where the nominal volume is expressed as mentioned in paragraph 7(5) above and oil is in fact delivered under the contract of sale, the effective volume is whichever is the greater of—

(a) the minimum nominal volume; and

(b) so much of the total volume of oil actually delivered under the contract as does not exceed the maximum nominal volume.

(3) In relation to any proposed sale which does not fall within sub-paragraph (2) above, the effective volume shall be taken to be the nominal volume.

[F20 (4) In relation to a proposed supply or proposed appropriation where the nominal volume is expressed as mentioned in paragraph 7(5) above and oil is in fact supplied or, as the case may be, relevantly appropriated as proposed in the nomination, the effective volume is whichever is the greater of—

(a) the minimum nominal volume; and

(b) so much of the total volume of oil supplied or relevantly appropriated as does not exceed the maximum nominal volume.

(5) in relation to a proposed supply or proposed appropriation which does not fall within sub-paragraph (4) above, the effective volume is the nominal volume.]

Textual Amendments

F20 Finance (No. 2) Act 1987 (c. 51, SIF 63:1), s. 101(1)(5) and Sch. 8 para. 3 for calendar months in chargeable periods beginning with March 1987

Aggregate effective volume for a month U.K.

10 (1) Subject to the provisions of this paragraph, for each month the aggregate effective volume of a participator’s nominated transactions is the sum of the effective volumes of all of the proposed transactions nominated by him for that month. U.K.

(2) If a participator’s aggregate effective volume for any month, as determined under sub-paragraph (1) above, would exceed his equity production for that month—

(a) his nominated transactions for that month shall be taken to be reduced by cancelling later nominations in priority to earlier ones until the cancellation of the next nominated transaction would produce an aggregate effective volume less than the participator’s equity production; and

(b) the effective volume of the latest remaining nominated transaction shall be taken to be reduced so far as necessary to secure that the aggregate effective volume is equal to the participator’s equity production.

Aggregate nominated proceeds for a month U.K.

11 (1) For each month, a participator’s aggregate nominated proceeds for the purposes of section 61 of this Act is the sum of—

(a) the proceeds of each nominated transaction falling within sub-paragraph (2) below; and

(b) [F21 Subject to sub-paragraph (1A) below] the market value of any excess falling within sub-paragraph (3) below.

[F21 (1A) If for any month—

(a) a participator has made a nomination of a proposed sale, and

(b) he has an excess falling within sub-paragraph (3) below,

then for that month the reference in sub-paragraph (1)(b) above to the market value of the excess shall be construed as a reference to the market value multiplied by the designated fraction for that month.]

(2) [F21 Subject to sub-paragraph (2A) below] for each nominated transaction, the effective volume of which forms part of the participator’s aggregate effective volume for the month, as defined in paragraph 10 above, the proceeds of the transaction means the effective volume multiplied by the nominated price.

[F21 (2A) In the case of a nominated transaction consisting of a proposed supply or proposed appropriation, the proceeds of the transaction shall not have the meaning assigned by sub-paragraph (2) above unless the participator satisfies the Board—

(a) that the whole of the effective volume of oil has been or is to be used for refining as mentioned in paragraph 2(1)(b) above or, as the case may be, has been or is to be relevantly appropriated; or

(b) that, in so far as any of the effective volume of oil has not been or is not to be so used or appropriated, that is occasioned by circumstances over which neither the participator nor any company associated with him, as mentioned in paragraph 2(1) above, has (or had at any material time) control;

and if the Board are not so satisfied with respect to any such nominated transaction, the proceeds of that transaction means the market value (determined in accordance with Schedule 3 to the principal Act) of the effective volume of oil, multiplied by the designated fraction for the month in question.]

(3) If the participator’s equity production for a month exceeds his aggregate effective volume for that month, as defined in paragraph 10 above, the market value of the excess shall be determined in accordance with Schedule 3 to the principal Act.

(4) The reference in sub-paragraph (2) above to the nominated price is a reference to that price expressed in sterling; and regulations made by the Board shall make provision with respect to the conversion into sterling of any nominated price which is expressed in a currency other than sterling.

[F21 (5) For any month the designated fraction is such fraction as may be specified for the purposes of that month by order made by the Treasury.

(6) An order under sub-paragraph (5) above—

(a) shall not specify a fraction smaller than unity or greater than 3/2;

(b) may be made to have effect for any month in the chargeable period in which falls the date on which the order is made (whether that month begins before, on or after that date);

(c) If it has effect for a month earlier than the date on which it is made, may contain such transitional provisions as the Treasury consider appropriate; and

(d) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of the House of Commons.]

Textual Amendments

F21 Finance (No. 2) Act 1987 (c. 51, SIF 63:1), s. 101(1)(5)(6) and Sch. 8 para. 5 for chargeable periods ending after a day to be appointed

Blended oil U.K.

12 [F22 (1) If a person is a participator in two or more oil fields which, in relation to any blended oil, are or are included among the originating fields, then, in accordance with regulations made by the Board, he may make a nomination, having effect with respect to all the originating fields in which he is a participator, of a proposed sale, supply or appropriation of the blended oil]; and the preceding provisions of this Schedule shall have effect in relation to such a nomination subject to such modifications as may be prescribed by regulations made by the Board. U.K.

[F22 (2) In sub-paragraph (1) above “blended oil” and “the originating fields” have the same meaning as in section 63 of this Act.]

Textual Amendments

F22 Finance (No. 2) Act 1987 (c. 51, SIF 63:1), s. 101(1)(5) and Sch. 8 para. 6 for calendar months in chargeable periods beginning with March 1987

Modifications etc. (not altering text)

C8 See S.I. 1987 No. 1338 (in Part III) regn. 19

C9 See S.I. 1987 No. 1338 (in Part III) regn. 20

Returns U.K.

13 U.K. In paragraph 2 of Schedule 2 to the principal Act (returns by participators) at the end of sub-paragraph (3) there shall be inserted the following sub-paragraph—

“(3A) A return under this paragraph for a chargeable period shall—

(a) state the amount (if any) which, in the case of the participator, is to be brought into account for that period in accordance with section 2(5)(e) of this Act;

(b) contain such particulars as the Board may prescribe (whether before or after the passing of the Finance Act 1987) with respect to any nominated transaction under Schedule 10 to that Act—

(i) the effective volume of which forms part of the participator’s aggregate effective volume (construing those terms in accordance with that Schedule) for any calendar month comprised in that chargeable period; and

(ii) which has not led to deliveries of oil or relevant appropriations of which particulars are included in the return by virtue of sub-paragraph (2) above; and

(c) contain such other particulars as the Board may prescribe (as mentioned above) in connection with the application of section 61 of and Schedule 10 to the Finance Act 1987.”

Modifications etc. (not altering text)

C10 Part of the text of Sch. 10 para. 13 is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991

SCHEDULE 11 U.K. Market Value of Oil

Part I U.K. Amendments of Paragraphs 2, 2a and 3 of Schedule 3 to Principal Act

1 (1) Paragraph 2 of Schedule 3 (definition of market value of oil) shall be amended in accordance with this paragraph. U.K.

(2) For sub-paragraph (1) there shall be substituted—

“(1) The market value of any oil in any calendar month shall be determined for the purposes of this Part of this Act in accordance with this paragraph.”

(3) In sub-paragraph (2) for the words from the beginning to “to be delivered” in paragraph (b) there shall be substituted—

“(2) Subject to the following provisions of this paragraph, the market value of any oil in a calendar month (in this paragraph referred to as “the relevant month”) is the price at which oil of that kind might reasonably have been expected to be sold under a contract of sale satisfying the following conditions—

(a) the contract is for the sale of the oil at arm’s length to a willing buyer;

(b) the contract is for the delivery of the oil at a time in the relevant month;

(c) the contract is entered into within the period beginning at the beginning of the month preceding the relevant month and ending on the middle day of the relevant month or, if the Treasury by order so direct, within such other period as may be specified in the order;

(d) the contract requires the oil to have been subjected to appropriate initial treatment before delivery;

(e) the contract requires the oil to be delivered”.

(4) In sub-paragraph (2), paragraph (c) shall become paragraph (f) and shall be amended as follows—

(a) for the words “as at a particular time” there shall be substituted “ as in a particular month ”; and

(b) for the words “as at that time” there shall be substituted “ as in that month ”.

(5) At the end of sub-paragraph (2) there shall be added the words “ and, for the purposes of paragraph (c) above, the middle day of a month containing an even number of days shall be taken to be the last day of the first half of the month, and the power to make an order under that paragraph shall be exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of the Commons House of Parliament. ”

(6) After sub-paragraph (2) there shall be inserted the following sub-paragraphs—

“(2A) For the purpose of sub-paragraph (2) above, the price of any oil in a calendar month shall be determined, subject to sub-paragraphs (2B) and (2C) below, by taking the average of the prices under actual contracts for the sale of oil of that kind—

(a) which are contracts for the sale of oil by a participator in an oil field or by a company which, for the purposes of section 115(2) of the Finance Act 1984, is associated with such a participator; and

(b) which, subject to sub-paragraph (2B) below, satisfy the conditions in paragraphs (a) to (e) of sub-paragraph (2) above; and

(c) which do not contain terms as to payment which differ from those customarily contained in contracts for the sale at arm’s length of oil of the kind in question.

(2B) For the purposes of sub-paragraph (2A)(b) above, a contract shall be treated as fulfilling the condition in paragraph (c) of sub-paragraph (2) above if it contains provisions under which the price for oil to be delivered in the relevant month either is determined or subject to review in the period relevant for the purposes of that paragraph or is determined by reference to other prices which are themselves determined in that period, being prices for oil to be delivered in the relevant month.

(2C) The average referred to in sub-paragraph (2A) above shall be determined—

(a) by establishing an average price for oil of the kind in question for each business day within the period relevant for the purposes of sub-paragraph (2)(c) above; and

(b) by taking the arithmetic mean of the average prices so established; and in this sub-paragraph “business day” has the same meaning as in the Bills of Exchange Act 1882.

(2D) If or in so far as the Board are satisfied that it is impracticable or inappropriate to determine for the purposes of sub-paragraph (2) above the price of any oil in a calendar month as mentioned in sub-paragraph (2A) above (whether by virtue of an insufficiency of contracts satisfying the conditions or of information relating to such contracts or by virtue of the nature of the market for oil of the kind in question or for any other reason), that price shall be determined,—

(a) so far as it is practicable and appropriate to do so by reference to such other contracts (whether or not relating to oil of the same kind) and in accordance with the principles in sub-paragraph (2C) above; and

(b) so far as it is not practicable or appropriate to determine it as mentioned in paragraph (a) above, in such other manner as appears to the Board to be appropriate in the circumstances.”

(7) In sub-paragraph (3)—

(a) for the words “as at a particular time” there shall be substituted “ as in a particular month ”;

(b) the words “at that time”, where they first occur, shall be omitted;

(c) after the words “was disposed of” there shall be inserted “ in that month ”;

(d) for the words “and (2)” there shall be substituted “ to (2D) ”;

(e) for the words “as at that time” there shall be substituted “ as in that month ”; and

(f) for “(2)(b)” there shall be substituted “ (2)(e) ”.

Modifications etc. (not altering text)

C11 Part of the text of Sch. 11 Pt. I para. 1(2)(3)(5)(6) is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991

2 U.K. In paragraph 2A of that Schedule (modifications in the case of oil consisting of gas)—

(a) in sub-paragraphs (1) and (3) for “(1) and (2)” there shall be substituted “ (1) to (2D) ”;

(b) in sub-paragraph (2) for “(2)(a)” in each place where it occurs, there shall be substituted “ (2)(d) ”; and

(c) in sub-paragraph (3) for “(2)(b)” there shall be substituted “ (2)(e) ”.

3 U.K. In paragraph 3 of that Schedule (aggregate market value of oil for purposes of section 2(5))—

(a) in sub-paragraph (1) the words “at the material time” shall be omitted; and

(b) in sub-paragraph (2) the words from “and the material time” onwards shall be omitted.

Part II U.K. Consequential Amendments of Principal Act

4 U.K. In section 5A (allowance of exploration and appraisal expenditure) in subsection (5C)(a) for “(c)” there shall be substituted “ (f) ”.

5 U.K. In section 12 (interpretation) in subsection (1) in the definition beginning “calendar month” for the words from “and” to “have” there shall be substituted “ has ”.

6, 7. U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F23

Textual Amendments

F23 Sch. 11 Pt. II paras. 6, 7 repealed by Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), s. 844, Sch. 31

Section 63.

SCHEDULE 12 U.K. Supplementary Provisions as to Blended Oil

Interpretation U.K.

1 U.K. In this Schedule—

(a) “the principal section” means section 63 of this Act;

(b) “blended oil” and “the originating fields” have the same meaning as in the principal section;

(c) a “method of allocation” means such a method as is referred to in subsection (2) of the principal section; and

(d) “the oil taxation legislation” means Part I of the principal Act and any enactment construed as one with that Part.

Amendments of allocation by the Board U.K.

2 U.K. If at any time it appears to the Board that a method of allocation of blended oil of which details have been furnished to them in accordance with subsection (3) of the principal section is not just and reasonable for the purposes of the oil taxation legislation, having regard to the quantity and quality of the oil derived from each of the originating fields,—

(a) they shall give notice in writing to each of the participators in those fields informing them of that fact and proposing amendments which would render the method acceptable to the Board; and

(b) subject to the following provisions of this Schedule, for any chargeable period beginning after the date of a notice under paragraph (a) above, the method of allocation shall be treated for the purposes of the oil taxation legislation as amended in accordance with the Board’s proposals.

Appeals U.K.

3 (1) Where the Board give notice to the participators in the originating fields under paragraph 2(a) above, any of those participators may appeal to the Special Commissioners against the notice by giving notice in writing to the Board within thirty days after the date of the notice given by the Board. U.K.

(2) Where notice of appeal is given under sub-paragraph (1) above—

(a) the Board shall give notice in writing to all those participators in the originating fields who have not given notice of appeal and they shall, by virtue of that notice, become parties to the appeal and be entitled to appear accordingly.

(b) if, before the determination of the appeal by the Special Commisssioners, the Board and the participators in the originating fields agree that the method of allocation concerned should not be amended or should have effect with particular amendments, the same consequences shall ensue as if the Commissioners had determined the appeal to that effect;

(c) if, on the hearing of the appeal, it appears to the majority of the Commissioners present that the method of allocation concerned is satisfactory, with or without modifications, for the purposes of the oil taxation legislation they shall allow the appeal and, where appropriate, shall amend the method of allocation accordingly for those purposes; and

(d) sub-paragraphs (2), (8) and (11) of paragraph 14 of Schedule 2 to the principal Act shall apply in relation to the appeal as they apply in relation to an appeal against an assessment or determination made under that Act.

4 U.K. Any method or amended method of allocation having effect by virtue of paragraph 3(2) above shall have effect with respect to any such chargeable period as is referred to in paragraph 2(b) above.

Section 64.

SCHEDULE 13 U.K. Relief for Research Expenditure

Part I U.K. Section to be Inserted After Section 5A of the Principal Act

Modifications etc. (not altering text)

C12 The text of Sch. 13 Pt. I is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991

“5B Allowance of research expenditure.

(1) Subject to the following provisions of this section and Schedule 7 to this Act, the research expenditure which is allowable in the case of a person who is a participator in an oil field is any expenditure (whether or not of a capital nature) which—

(a) is incurred by him on or after 17th March 1987; and

(b) at the expiry of the period of three years from the time at which it was incurred, has not become allowable under section 3 or section 4 of this Act or section 3 of the Oil Taxation Act 1983; and

(c) was not incurred for purposes relating to a particular oil field; and

(d) was not incurred wholly and exclusively for one or more of the purposes which, subject to subsection (2) below, are specified in section 5A(2) of this Act; and

(e) was incurred for the purpose of research of a such a description that, if it had been incurred by the participator in relation to a particular field, it would have been allowable for that field under section 3 or section 4 of this Act or section 3 of the Oil Taxation Act 1983; and

(f) was incurred wholly or partly for United Kingdom purposes.

(2) For the purposes only of subsection (1)(d) above, any reference in section 5A(2) of this Act to the territorial sea of the United Kingdom shall be taken to include a reference to the United Kingdom itself.

(3) Where expenditure falling within paragraphs (a) to (e) of subsection (1) above is incurred partly for United Kingdom purposes and partly for other purposes, only such part of the expenditure as it is just and reasonable to apportion to United Kingdom purposes shall be allowable by virtue of this section.

(4) In subsections (1)(f) and (3) above, “United Kingdom purposes” means purposes relating to the United Kingdom, the territorial sea thereof or designated areas, excluding any sector which, by virtue of subsection (3)(b) of section 107 of the Finance Act 1980 (transmedian fields), is deemed to be a designated area.

(5) Expenditure is not allowable under this section if, or to the extent that, it has been allowed under Schedule 5, Schedule 6 or Schedule 7 to this Act for or in connection with an oil field.

(6) To the extent that it is reasonable to assume that expenditure which, apart from this subsection, would be allowable under this section has been incurred for purposes relating to excluded oil, within the meaning of section 10(1) of this Act, that expenditure is not allowable under this section.

(7) Subject to subsection (3) above, subsections (2) and (6) of section 5 of this Act apply for the purposes of this section as they apply for the purposes of that section except that—

(a) any reference in subsection (2) of section 5 to the purpose mentioned in subsection (1)(b) of that section shall be construed as a reference to the purpose referred to in subsection (1)(e) of this section;

(b) the reference in paragraph (a) of subsection (2) to subsection (1) of that section shall be construed as a reference to subsection (1) of this section; and

(c) where any expenditure falls to be apportioned under subsection (3) of this section, any receipt to which it gives rise shall be similarly apportioned in the application of subsection (6) of secion 5.

(8) Paragraph 2 of Schedule 4 to this Act applies in relation to this section as it applies in relation to sections 3 and 4 of this Act.”

Part II U.K. Amendments Relating to the New Allowance

The principal Act U.K.

1 U.K. In section 2(9) of the principal Act (amounts to be taken into account in respect of expenditure) at the end of paragraph (f) there shall be added “and

(g) any research expenditure allowable in the case of the participator under section 5B of this Act which, on a claim made by him under Schedule 7 to this Act, has been allowed under that Schedule before the Board have made an assessment to tax or a determination on or in relation to him for the period in respect of the field, so far as that expenditure has not been taken into account in any previous assessment to tax or determination.”

Modifications etc. (not altering text)

C13 Part of the text of Sch. 13 Pt. II paras. 1, 7 is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991

2 U.K. In section 3 of that Act, in subsection (3) (expenditure not allowable under that section if already allowed under other provisions) after the words “section 5A” there should be inserted “ or section 5B ”.

3 U.K. In section 9 of that Act (limit on amount of tax payable) in subsection (2)(a)(ii) for the words “and (f)” there shall be inserted “ (f) and (g) ”.

4 U.K. In paragraph 2 of Schedule 2 to that Act (returns by participators) in sub-paragraph (2A) (initial return to include particulars of certain expenditure already claimed) for the words “exploration and appraisal expenditure to which section 5A” there shall be substituted “ expenditure to which section 5A or section 5B ”.

5 (1) In Schedule 7 to that Act (claim for allowance of certain exploration expenditure etc.) at the end of paragraph 1(1)(b) there shall be added “or U.K.

(c) of any research expenditure allowable under section 5B of this Act”.

(2) In paragraph 1(3) of that Schedule after the words “section 5A” there shall be inserted “ or section 5B ”.

The Petroleum Revenue Tax Act 1980 U.K.

6 U.K. In the Schedule to the M11 Petroleum Revenue Tax Act 1980 (computation of payment on account) in paragraph 2(4) for the words “or (f)” there shall be substituted “ (f) or (g) ”.

Marginal Citations

M11 1980 c. 1.

The Finance Act 1980 U.K.

7 U.K. In Schedule 17 to the M12 Finance Act 1980 (transfers of interests in oil fields) after paragraph 16A (exploration and appraisal expenditure) there shall be inserted—

“ Research expenditure U.K.

16B In relation to research expenditure to which section 5B applies, paragraph 16 above has effect as if any reference therein to section 5 were a reference to section 5B.”

Modifications etc. (not altering text)

C14 Part of the text of Sch. 13 Pt. II paras. 1, 7 is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991

Marginal Citations

M12 1980 c. 48.

The Finance Act 1981 U.K.

8 U.K. In section 111 of the M13 Finance Act 1981 (restriction of expenditure supplement) in subsection (3)(a) the words following “the principal Act” (which specify certain types of expenditure and losses) shall be omitted.

Marginal Citations

M13 1981 c. 35.

The Finance Act 1984 U.K.

9 (1) In section 113 of the M14 Finance Act 1984 (restriction on PRT reliefs), in subsection (1)— U.K.

(a) the words “abortive exploration expenditure or exploration and appraisal” shall be omitted; and

(b) after the words “section 5A” there shall be inserted “ or section 5B ”.

(2) In subsection (6) of that section—

(a) after the words “section 5A” there shall be inserted “ or section 5B ”; and

(b) for the words “paragraph 16 or paragraph 16A” there shall be substituted “ paragraphs 16 to 16B ”.

Marginal Citations

M14 1984 c. 43.

Part III U.K. Receipts to be Set Against Allowable Expenditure

10 U.K. In this Part of this Schedule—

• “allowable expenditure” means expenditure which, in accordance with section 5B of the principal Act, is allowable on a claim made by a participator under Schedule 7 to that Act; and

• “qualifying receipt” means a sum the amount of which falls, by virtue of subsection (6) of section 5 of the principal Act, to be applied by way of reduction in the amount of expenditure which would otherwise be allowable expenditure.

11 (1) A return made by a participator for a chargeable period under paragraph 2 of Schedule 2 to the principal Act shall give details of any qualifying receipt (whether received by him or by a person connected with him) of which details have not been given in a return made by him for an earlier chargeable period. U.K.

(2) Section [F24 839] of the Taxes Act (connected persons) applies for the purposes of this paragraph.

Textual Amendments

F24 Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), Sch. 29 para. 32

12 (1) This paragraph applies where— U.K.

(a) a claim for allowable expenditure has been made by a participator under Schedule 7 to the principal Act; and

(b) as a result of the receipt (whether before or after the making of the claim) of a qualifying receipt, the amount allowed by way of allowable expenditure on the claim exceeds what it should have been.

(2) In determining, in a case where this paragraph applies, the assessable profit or allowable loss accruing to the participator in the chargeable period in which the qualifying receipt is recived, the amount of the excess referred to in sub-paragraph (1)(b) above shall be taken into account under section 2 of the principal Act as an amount which is to be included among the positive amounts referred to in subsection (3)(a) of that section.

(3) In the application of section 9 of the principal Act (limit on amount of tax payable) to a chargeable period in respect of which sub-paragraph (2) above applies, the amount of the excess referred to in sub-paragraph (1)(b) above shall be deducted from the amount which would otherwise be the total ascertained under subsection (2)(a)(ii) of that section and, if the amount of that excess is greater than the amount which would otherwise be that total, that total shall be a negative amount equal to the difference.

Section 65.

SCHEDULE 14 U.K. Cross-Field Allowance

Part I U.K. Elections

General U.K.

1 (1) An election shall be made in such form as may be prescribed by the Board. U.K.

(2) Without prejudice to sub-paragraph (1) above, an election shall specify—

(a) the expenditure in respect of which it is made and the amount of that expenditure (in this Part of this Schedule referred to as “the elected amount”), which shall not exceed 10 per cent., which is to be allowable under the principal section;

(b) the field of origin and the receiving field;

(c) the notice, agreement or determination which, under paragraph 2 below, determines the earliest date on which the election could be made;

(d) in a case where the elected amount is to be allowable in respect of more than one receiving field, the proportions in which that amount is to be apportioned between those fields; and

(e) in the case of expenditure incurred by a company which is an associated company of the participator for the purposes of the principal section, the name of that company.

(3) An election shall be irrevocable.

Earliest date for an election U.K.

2 (1) No election may be made in respect of an amount of expenditure until a final decision as to supplement has been made on a claim in respect of that amount under Schedule 5 or Schedule 6 to the principal Act. U.K.

(2) For the purposes of this paragraph, a final decision as to supplement is made in relation to an amount of expenditure when—

(a) the Board give to the responsible person or, as the case may be, the participator notice under paragraph 3 of Schedule 5 to the principal Act stating that amount of expenditure as an amount qualifying for supplement; or

(b) after notice of appeal has been given against a decision on a claim, an agreement is made as mentioned in sub-paragraph (1) of paragraph 6 of Schedule 5 to the principal Act and that amount of expenditure is, for the purposes of that sub-paragraph, the appropriate amount of the expenditure claimed as qualifying for supplement; or

(c) on an appeal against a decision on a claim, there is a determination by the Special Commissioners or the court by virtue of which that amount of expenditure falls (under paragraph 7(2) or paragraph 8(2) of Schedule 5 to the principal Act) to be treated for the purposes of Part I of that Act as qualifying for supplement.

(3) Nothing in Schedule 5 to the principal Act relating to the date on which an amount of expenditure is to be treated as having been allowed as qualifying for supplement applies for the purposes of sub-paragraph (2) above.

Latest date for election U.K.

3 (1) Subject to sub-paragraph (2) below, an election by a participator in respect of a particular amount of expenditure may be made at any time before— U.K.

(a) the Board make, for a chargeable period of the field of origin, an assessment or determination which takes account of that amount of expenditure as qualifying for supplement; and

(b) notice of that assessment or determination is given to the participator or, as the case may be, the associated company, under paragraph 10 of Schedule 2 to the principal Act.

(2) Where the earliest date for the making of an election in respect of a particular amount of expenditure is a date determined under paragraph 2(2)(b) or paragraph 2(2)(c) above, such an election may be made at any time before notice is given as mentioned in sub-paragraph (1)(b) above or, if it is later, before the expiry of the period of thirty days beginning on the day following that earliest date.

Two or more elections relating to same expenditure U.K.

4 U.K. Where more than one election is made in respect of the same amount of expenditure—

(a) the maximum of 10 per cent

specified in paragraph 1(2)(a) above shall be cumulative; and

(b) if the elected amount specified in a second or subsequent election is such that, when aggregated with the elected amount or amounts specified in the earlier election or elections, it would exceed 10 per cent., that second or subsequent election shall have effect as if it specified such an elected amount as would, when so aggregated, be equal to 10 per cent. of the expenditure concerned; and

(c) an election shall be of no effect if it is made after one or more earlier elections have specified (or been treated by paragraph (b) above as having specified) an elected amount or an aggregate of elected amounts equal to 10 per cent.

Part II U.K. Effect on Receiving Field

5 (1) In relation to an election, the assessment to tax or determination referred to in subsection (4)(a) of the principal section is that which is first made after the relevant date on or in relation to the participator by whom the election is made. U.K.

(2) Subject to paragraphs 6 and 7 below, the relevant date for the purposes of sub-paragraph (1) above is the date of the election.

6 U.K. In any case where—

(a) an election is made in the period of thirty days beginning on the day following that on which the Board give notice under paragraph 3 of Schedule 5 to the principal Act stating the expenditure in respect of which the election is made as expenditure qualifying for supplement, and

(b) after the date of that notice but on or before the date of the election, an assessment to tax or determination for the receiving field is made on or in relation to the participator making the election,

the relevant date for the purposes of paragraph 5(1) above is the date of the notice referred to in paragraph (a) above; and the assessment or determination referred to in paragraph (b) above shall be amended accordingly.

7 U.K. In any case where, following the giving of a notice of appeal, an election is made in respect of expenditure which (under paragraph 6(1), paragraph 7(2) or paragraph 8(2) of Schedule 5 to the principal Act) is treated for the purposes of Part I of that Act as having been allowed as qualifying for supplement on the date on which the notice of appeal was given, the relevant date for the purposes of paragraph 5(1) above is the date on which that notice was given; and in any assessment to tax or determination (relating to the field of origin or the receiving field) all such adjustments or further adjustments shall be made as are necessary in consequence of the election.

Part III U.K. Relevant New Fields and Associated Companies

Relevant new fields U.K.

8 (1) For the purposes of the principal section “relevant new fields” means, subject to sub-paragraph (2) below, an oil field— U.K.

(a) no part of which lies in a landward area, within the meaning of the M15 Petroleum (Production) Regulations 1982 or in an area to the East of the United Kingdom and between latitudes 52° and 55° North; and

(b) for no part of which consent for development has been granted to the licensee by the Secretary of State before 17th March 1987; and(c) for no part of which a programme of development had been served on the licensee or approved by the Secretary of State before that date.

(2) In determining, in accordance with sub-paragraph (1) above, whether an oil field (in this sub-paragraph referred to as “the new field”) is a relevant new field, no account shall be taken of a consent for develoment granted before 17th March 1987 or a programme of development served on the licensee or approved by the Secretary of State before that date if—

(a) in whole or part that consent or programme related to another oil field for which a determination under Schedule 1 to the principal Act was made before the determination under that Schedule for the new field; and

(b) on or after 17th March 1987 a consent for development is or was granted or a programme of development is or was served on the licensee or approved by the Secretary of State and that consent or programme relates, in whole or in part, to the new field.

Marginal Citations

M15 S.I. 1982/1000.

9 (1) In paragraph 8 above “development” means— U.K.

(a) the erection or carrying out of permanent works for the purpose of getting oil from the field or for the purpose of conveying oil won from the field to a place on land; or

(b) winning oil from the field otherwise than in the course of searching for oil or drilling wells;

and consent for development does not include consent which is limited to the purpose of testing the characteristics of an oil-bearing area and does not relate to the erection or carrying out of permanent works.

(2) In sub-paragraph (1) above “permanent works” means any structures or other works whatsoever which are intended by the licensee to be permanent and are neither designed to be moved from place to place without major dismantling nor intended by the licensee to be used only for searching for oil.

Associated companies U.K.

10 (1) For the purposes of the principal section, a company is an associated company of a participator (being itself a company) making an election under that section if— U.K.

(a) throughout that part of the relevant period in which both were in existence one was a 51 per cent. subsidary of the other and the other was not a 51 per cent. subsidary of any company; or

(b) each of them was, throughout that part of the relevant period in which it was in existence, a 51 per cent, subsidary of a third company which was not itself a 51 per cent. subsidiary of any company.

(2) In this paragraph “company” means any body corporate and section [F25 838] of the Taxes Act (subsidiaries) applies for the purposes of this paragraph.

(3) For the purposes of this paragraph the relevant periods ends on the date on which the election in question is made and begins—

(a) in the case of an election relating to expenditure incurred in the first claim period of the field of origin, on the date on which any part of that field was first determined under Schedule 1 to the principal Act; and

(b) in the case of an election relating to expenditure incurred in any other claim period of the field of origin, at the beginning of that claim period.

Textual Amendments

F25 Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), Sch. 29 para. 32

Part IV U.K. Supplemental and Consequential Provisions

Notice of variation reducing expenditure qualifying for supplement U.K.

11 (1) This paragraph applies in any case where— U.K.

(a) an amount of expenditure is allowed as qualifying for supplement as regards the field of origin; and

(b) one or more elections is made in respect of that expenditure; and

(c) a notice of variation is served under paragraph 9 of Schedule 5 to the principal Act; and

(d) on that notice of variation becoming effective for the purposes of the said paragraph 9, the amount of the expenditure referred to in paragraph (a) above is taken for the purposes of Part I of the Principal Act as having been reduced.

(2) In sub-paragraph (3) below—

(a) “the original expenditure” means the amount of expenditure referred to in sub-paragraph (1)(a) above, disregarding the effect of the notice of variation;

(b) “the reduced expenditure” means the amount of expenditure after the notice of variation became effective for the purposes of paragraph 9 of Schedule 5 to the principal Act; and

(c) “the expenditure originally allowable” means the amount of the original expenditure which, having regard to the election or elections in respect of that expenditure but disregarding the effect of the notice of variation, was allowable in accordance with the principal section.

(3) If the expenditure originally allowable exceeds 10 per cent. of the reduced expenditure, the principal section shall have effect as if the election or elections had specified an amount of that expenditure equal (or equal in the aggregate) to 10 per cent. of the reduced expenditure and, where there was more than one election, paragraph 4 above shall be taken to have applied accordingly.

(4) Such amendments of assessments to tax or determinations (relating to the field of origin or the receiving field) shall be made as may be necessary in consequence of the preceding provisions of this paragraph.

Elections following variation increasing expenditure qualifying for supplement U.K.

12 (1) In any case where— U.K.

(a) an amount of expenditure is allowed as qualifying for supplement as regards the field of origin, and

(b) one or more elections is made in respect of that expenditure, and

(c) a notice of variation is served under paragraph 9 of Schedule 5 to the principal Act, and

(d) on that notice of variation becoming effective for the purposes of the said paragraph 9, the amount of the expenditure referred to in paragraph (a) above is taken for the purposes of Part I of the principal Act as having been increased,

an election may be made in respect of the amount of the increase as if it were a separate amount of expenditure.

(2) In the circumstances referred to in sub-paragraph (1) above an election may be made by the participator in question at any time before—

(a) notice is given to the participator or, as the case may be, the associated company of the making of that assessment or determination or that amendment of an assessment or determination which takes account of the increase resulting from the notice of variation; or

(b) if it is later, the expiry of the period of thirty days beginning on the date on which the notice of variation becomes effective for the purposes of paragraph 9 of Schedule 5 to the principal Act.

(3) Where an election is made by a participator in the circumstances referred to in sub-paragraph (1) above—

(a) paragraph 1(2)(c) above shall have effect as if it referred to the notice of variation;

(b) subsection (4)(a) of the principal section shall not apply; and

(c) the expenditure allowable as a result of the election shall be taken into account in the first assessment to tax or determination relating to a chargeable period of the receiving field which is made on or in relation to the participator after the date of the decision to which the notice of variation relates.

(4) Such amendments of assessments to tax or determinations (relating to the field of origin or the receiving field) shall be made as may be necessary in consequence of the preceding provisions of this paragraph.

Limit on amount of tax payable in respect of receiving field U.K.

13 (1) Where an election has been made by a participator, this paragraph has effect with respect to the determination under section 9 of the principal Act (limit on amount of tax payable) of the adjusted profit of the participator in respect of the receiving field. U.K.

(2) For the chargeable period in which the amount of expenditure allowable by virtue of the election is taken into account as mentioned in subsection (4) of the principal section, that amount shall also be taken into account as if it were an addition to the total amount mentioned in section 9(2)(a)(ii) of the principal Act.

Section 71.

SCHEDULE 15 U.K. Pre-Consolidation Amendments: Income Tax and Corporation Tax

1–11 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F26

Textual Amendments

F26 Sch. 15 paras. 1–11, 13–17 repealed by Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), s. 844, Sch. 31

The Interpretation Act 1978 (c. 30) U.K.

12 U.K. In Schedule 1 to the Interpretation Act 1978 for the definitions of “the Corporation Tax Acts” and “the Tax Acts” there shall be substituted the following definitions—

• “The Corporation Tax Acts” means the enactments relating to the taxation of the income and chargeable gains of companies and of company distributions (including provisions relating to income tax);

• “The Tax Acts” means the Income Tax Acts and the Corporation Tax Acts.

Modifications etc. (not altering text)

C15 The text of Sch. 15 para. 12 is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991

13–17 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F27

Textual Amendments

F27 Sch. 15 paras. 1–11, 13–17 repealed by Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), s. 844, Sch. 31

SCHEDULE 16 U.K. Repeals

Part I U.K. Vehicles Excise Duty

Chapter	Short title	Extent of repeal
1971 c. 10.	Vehicles (Excise) Act 1971.	Section 9(3)(b) and (c).In section 16, in subsection (1) in paragraph (i), the words from “and all recovery vehicles” to “that business” and in paragraph (a) of the proviso the words from “except” to “disabled vehicle”, subsection (3)(b) and in subsection (8) the definition of “recovery vehicle”.In section 18A(7), paragraph (d) and the word “or” immediately preceding it.In Part I of Schedule 7, paragraphs 7(b)(ii) and 17A(b)(ii).
1972 c. 10 (N.I.).	The Vehicles (Excise) Act (Northern Ireland) 1972.	Section 9(4)(b) and (c).In section 16, in subsection (1)(a) the words from “and all recovery vehicles” to “that business”, in subsection (2)(a) the words from “except” to “disabled vehicle”, subsection (4)(b) and in subsection (10) the definition of “recovery vehicle”.In section 18(A)(7), paragraph (d) and the word “or” immediately preceding it.In Part I of Schedule 9, paragraphs 7(b)(2) and 17A(b)(ii).

1 U.K. The repeals in section 16 of each of the Vehicles (Excise) Act 1971 and the Vehicles (Excise) Act (Northern Ireland) Act 1972 have effect in relation to licences taken out after 31st December 1987.

2 U.K. The remaining repeals have effect in accordance with section 2(8) (a) and (b) of this Act.

Part II U.K. Betting and Gaming Duties

Chapter	Short title	Extent of repeal
1981 c. 63.	The Betting and Gaming Duties Act 1981.	In section 1(2) the words from the beginning of paragraph (a) to “bet” in paragraph (b).Section 3.Section 21(4).In Schedule 4, in paragraph 9(a), the words from “or” to “this Act)”.
1982 c. 39.	The Finance Act 1982.	In Schedule 6, paragraph 10.
1984 c. 43.	The Finance Act 1984.	In Schedule 3, paragraph 7(5)(b).
1985 c. 54.	The Finance Act 1985.	In Schedule 5, paragraph 1(2).

1 U.K. The repeal in section 1 of the Betting and Gaming Duties Act 1981 and the repeal of section 3 of that Act have effect with respect to bets made on or after 29th March 1987.

2 U.K. The repeal in the Finance Act 1982 has effect with respect to gaming machine licences for any period beginning on or after 1st June 1987.

3 U.K. The remaining repeals have effect with respect to gaming machine licences for any period beginning on or after 1st October 1987.

Part III U.K. Management of Customs and Excise

Chapter	Short title	Extent of repeal
1979 c. 2.	The Customs and Excise Management Act 1979.	In section 77(1)(a) the words “importation, exportation or”.
1983 c. 28.	The Finance Act 1983.	Section 7(4).

Part IV U.K. Value Added Tax

Chapter	Short title	Extent of repeal
1983 c. 55.	The Value Added Tax Act 1983.	In Schedule 1, paragraphs 6 and 8.In Schedule 5, item 2 of and Note (1) to Group 15.

Part V U.K. Income Tax and Corporation Tax: General

Modifications etc. (not altering text)

C16 Part of the text of Sch. 16 Pts. V, VII and X is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991

Chapter	Short title	Extent of repeal
1970 c. 9.	The Taxes Management Act 1970.	In section 86(4), in the second column of the Table, paragraph 5(b).
1970 c. 10.	The Income and Corporation Taxes Act 1970.	In section 243, the words “section 244 below and”.Section 244.In section 303, in subsection (3), the proviso and, in subsection (6), the words from “and in” onwards.
1975 c. 45.	The Finance (No. 2) Act 1975.	In section 44(2), the words from “section 244(1)” to “1965)”.In section 48(9), in the definition of “the material date”, paragraph (b).
1978 c. 42	The Finance Act 1978.	In Schedule 9, paragraph 11(3)(c).
1980 c. 48.	The Finance Act 1980.	Section 46(12).In Schedule 10, paragraph 26(3).
1981 c. 35.	The Finance Act 1981.	Section 27.
1982 c. 39.	The Finance Act 1982.	Section 32.
1984 c. 43.	The Finance Act 1984.	In Schedule 10, in paragraph 4(4), the words from “and paragrap h” to “ “associate”)”
1986 c. 50.	The Social Security Act 1986.	In Schedule 10, paragraph 101(b).

1 U.K. The repeals in section 86 of the Taxes Management Act 1970, sections 243 and 244 of the Income and Corporation Taxes Act 1970 and sections 44 and 48 of the Finance (No. 2) Act 1975 have effect with respect to accounting periods beginning on or after 17th March 1987.

2 U.K. Subject to section 37(2) of this Act, the repeals in section 303 of the Income and Corporation Taxes Act shall be deemed to have come into force on 6th April 1986.

3 U.K. The repeals in Schedule 9 to the Finance Act 1978, section 46 of and Schedule 10 to the Finance Act 1980 and Schedule 10 to the Finance Act 1984 shall be deemed to have come into force on 6th April 1986.

4 U.K. The repeals of section 27 of the Finance Act 1981 and section 32 of the Finance Act 1982 do not apply in relation to payments of supplementary allowance in respect of periods before the day on which regulations containing the first schemes under section 20(1)(a) of the Social Security Act 1986 and Article 21(1)(a) of the Social Security (Northern Ireland) Order 1986 come into force.

Part VI U.K. Unit Trusts

Modifications etc. (not altering text)

C17 The text of Sch. 16 Pt. VI is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991

These repeals have effect in accordance with an order under section 40 of this Act.
Chapter	Short title	Extent of repeal
1970 c. 10.	The Income and Corporation Taxes Act 1970.	In section 248(6)(c), the word “scheme”.In section 533(8), the words from “(as defined” to “1940)”.
1980 c. 48.	The Finance Act 1980.	In section 60, the words from “(Tax Acts” to “shareholders)”.
1984 c. 43.	The Finance Act 1984.	In section 92(7)(a), the words from “as defined” to “1958”.In section 94(1)(b), the words from “as defined” to “1958”.

Part VII U.K. Income Tax and Corporation Tax: Pre-Consolidation Amendments

Modifications etc. (not altering text)

C18 Part of the text of Sch. 16 Pts. V, VII and X is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991

C19 The repeals made in section 47 of the Finance (No. 2) Act 1975 treated as never having had effect—Finance Act 1988 (c. 39), Sch. 13 para. 24

The repeal of section 514 of the Taxes Act shall not have effect in relation to the Relief from Double Income Tax on Shipping Profits (Iceland) Declaration 1928.
Chapter	Short title	Extent of repeal
1970 c. 10.	The Income and Corporation Taxes Act 1970.	Section 20(3) to (5).Section 34(3) and in section 34(4) the words “given after 6th April 1948 and”.Section 105.Section 122(1)(c).Section 175(2)(d).Section 212(2).In section 214(1)(b) the words from “by virtue” to “1956”.In section 226(9)(c) the words “Schedule A”.In section 227, in subsection (5)(b) the words following “husband”, in subsection (9) the words “for chargeable periods after the year 1955–56” and subsection (12).Section 229(2).In section 312(2)(c) the words “not earlier than the year 1923–24”.Section 325.Section 345(1) and (2)(c).Section 352(10).Section 362(4).Section 375(3).In section 388(4) the words from “on or” to “Act 1952”.Sections 403 and 404.Section 420(3)(b)(i).Sections 422 to 424.In section 460(1), the proviso.In section 467(3), the proviso.Section 468.In section 495 in subsection (1) the words from “and which is” to the end and subsection (3).Section 514.Section 519(3).In Schedule 10 the words, in paragraph 1, “or any approved association of underwriters”, in paragraph 7(3)(a), “or the association in question” and, in paragraph 14, from “or the managing” to “in question”; and in paragraph 16(1) the definition of “approved association of underwriters”, in the definition of “business” the words from “or of whatever” to “in question” and in the definition of “underwriting year” all the words following “calendar year”.In Schedule 15, paragraph 1.
1972 c. 41.	The Finance Act 1972.	Section 76.In Schedule 16, in paragraph 12(1)(a) the words from “otherwise” to “1914”.
1973 c. 51.	The Finance Act 1973.	Section 31(6) to (8).Section 44.
1975 c. 44.	The Finance (No. 2) Act 1975.	Section 41.In section 47, in subsection (1) in paragraph (a), the words “surtax” and the last “or” and paragraph (b) and subsections (2), (3)(b) and (4)(b).
1976 c. 46.	The Finance Act 1976.	In section 33(1) the words from “Until” to “appoint”.
1980 c. 48.	The Finance Act 1980.	In section 36(1)(a) the words “and is not being considered for approval”.
1982 c. 39.	The Finance Act 1982.	Section 142(3) and (4).
1985 c. 54.	The Finance Act 1985.	In Schedule 11, paragraph 2(8).In Schedule 23 the words, in paragraph 21, “approved association of underwriters” and, in paragraphs 22(1), 27(1) and 28(1) and (5), “or of an approved association of underwriters” and “or the association in question”.

Part VIII U.K. Stamp Duty

Chapter	Short Title	Extent of repeal
1910 c. 8.	The Finance (1909–10) Act 1910.	Sections 77 to 79.
1946 c. 64.	The Finance Act 1946.	Section 54(6).
1946 c. 17 (N.I.).	The Finance (No. 2) Act (Northern Ireland) 1946.	Section 25(6).
1967 c. 54.	The Finance Act 1967.	In section 30, subsection (4) and, in subsection (5), the definition of “the scheduled territories”.
1967 c. 20 (N.I.).	The Finance Act (Northern Ireland) 1967.	In section 7, subsection (4) and, in subsection (5), the definition of “the scheduled territories”.
1970 c. 24.	The Finance Act 1970.	In Schedule 7, paragraph 9.
1970 c. 21 (N.I.).	The Finance Act (Northern Ireland) 1970.	In Schedule 2, paragraph 9.

1 U.K. The repeals in section 30 of the Finance Act 1967 and section 7 of the Finance Act (Northern Ireland) 1967 have effect with respect to the issue of instruments and the transfer of stock on or after the day on which this Act is passed.

2 U.K. The remaining repeals shall come into force on the day on which section 49(1) of this Act comes into force.

Part IX U.K. Inheritance Tax

These repeals have effect in relation to transfers of value made, and other events occuring, on or after 17th March 1987.
Chapter	Short title	Extent of repeal
1984 c. 51.	The Inheritance Tax Act 1984.	Section 168(2).In section 178(2), the words “on a recognised stock exchange” in the second place where they occur.
1986 c. 41.	The Finance Act 1986.	In Schedule 20, in paragraph 8(1) the words from “then” onwards.

Part X U.K. Oil Taxation

Modifications etc. (not altering text)

C20 Part of the text of Sch. 16 Pts. V, VII and X is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991

The repeals in the Oil Taxation Act 1975 have effect with respect to chargeable periods ending after 31st December 1986.
Chapter	Short title	Extent of repeal
1975 c. 22.	The Oil Taxation Act 1975.	In section 2(9)(a)(i) and (ii), the words “at the material time”.In section 5A(5B), the words “at the material time”.In section 14, in subsection (4) and (4A)(b), the words “at the material time”.In Schedule 2, in paragraph 2(2)(a)(iii) and (b)(ii), the words “at the material time”.In Schedule 3, in paragraph 2(3), the words “at that time”, where they first occur, and in paragraph 3, in sub-paragraph (1) the words “at the material time” and in sub-paragraph (2) the words from “and “the material time”” onwards.
1981 c. 35.	The Finance Act 1981.	In section 111(3)(a), the words following “the principal Act”.
1983 c. 28.	The Finance Act 1983.	In Schedule 8, in Part II. paragraph 9.
1984 c. 43.	The Finance Act 1984.	In section 113(1), the words “abortive explorationexpenditure or exploration and appraisal”.

Part XI U.K. Exchange Control

Chapter	Short title	Extent of repeal
10 & 11 Geo. 6 c. 14.	The Exchange Control Act 1947.	The whole Act.
1 & 2 Eliz. 2 c. 136.	The Post Office Act 1953.	Section 16(4).
8 & 9 Eliz. 2 c. 52.	The Cyprus Act 1960.	In the Schedule, paragraph 2.
1963 c. 25.	The Finance Act 1963.	In section 71(1) the words “section 10 of the Exchange Control Act 1947, and to”.
1965 c. 2.	The Administration of Justice Act 1965.	In Schedule 1, the entry relating to the Exchange Control Act 1947.
1968 c. 39.	The Gas and Electricity Act 1968.	In section 2(5) the words from “or from” onwards.
1970 c. lxix.	The City of London (Various Powers) Act 1970.	In section 8(4) the words “with the Exchange Control Act 1947 and”.
1977 c. 36.	The Finance Act 1977.	Section 58.
1978 c. 23.	The Judicature (Northern Ireland) Act 1978.	In Schedule 5, in Part II, the entry relating to the Exchange Control Act 1947.
1979 c. 2	The Customs and Excise Management Act 1979.	In Schedule 4, in Part I of the Table, the entry relating to the Exchange Control Act 1947.
1979 c. 11	The Electricity (Scotland) Act 1979.	In section 27(9)(b) the words “or from” onwards.
1979 c. 14.	The Capital Gains Tax Act 1979.	Section 150(5).
1979 c. 43.	The Crown Agents Act 1979.	In section 8(5) paragraph (i) and, in paragraph (ii), the words “in relation to any time on or after that date”.
1981 c. 35.	The Finance Act 1981.	In section 136, subsections (1) and (3).Schedule 18.
1981 c. 54.	The Supreme Court Act 1981.	In Schedule 5, the entry relating to the Exchange Control Act 1947.
1982 c. 41.	The Stock Transfer Act 1982.	In section 6(3) the words from “and” onwards.In Schedule 2, paragraph 3.
1985 c. 65.	The Insolvency Act 1985.	In Schedule 8, paragraph 8.
1985 c. 66.	The Bankruptcy (Scotland) Act 1985.	In Schedule 7, paragraph 7.
1986 c. 45.	The Insolvency Act 1986.	In Schedule 14, the entry relating to the Exchange Control Act 1947.

1 U.K. The repeal of the Exchange Control Act 1947 does not affect the power of the Treasury to issue a certificate under subsection (2) of section 18 of that Act (including that subsection as applied by section 28(3) or section 29(3) of that Act) with respect to acts done before 13th December 1979.

2 U.K. The repeal of section 150(5) of the Capital Gains Tax Act 1979 does not affect the determination of the market value of any assets at a time before 13th December 1979.