Finance Act 1989

Interest etc. U.K.

178 Setting of rates of interest. U.K.

(1) The rate of interest applicable for the purposes of an enactment to whichthis section applies shall be the rate which for the purposes of thatenactment is provided for by regulations made by the Treasury under thissection.

(2) This section applies to—

(a) section 8(9) of the M1 Finance Act 1894,

(b) section 18 of the M2 Finance Act 1896,

(c) section 61(5) of the M3 Finance (1909-10) Act 1910,

(d) section 17(3) of the M4 Law of Property Act 1925,

(e) section 73(6) of the M5 Land Registration Act 1925,

(f) [F1 sections 59C, 86, 86A, 87, 87A, 88, 103A] of the M6 TaxesManagement Act 1970,

(g) paragraph 3 of Schedule 16A to the M7 Finance Act 1973,

[F2 (gg) [F3 paragraph 6 of Schedule 1 to the Social Security Contributions and Benefits Act 1992],]

(h) paragraphs 15 and 16 of Schedule 2, and paragraph 8 of Schedule 5, to the M8 Oil Taxation Act 1975,

F4 [(i) section 283 of the M9 Taxation of Chargeable Gains Act 1992;]

(j) paragraph 59 of Schedule 8 to the M10 Development Land TaxAct 1976,

(k) sections 233 and 236(3) and (4) of the M11 Inheritance TaxAct 1984,

(l) section 92 of the Finance Act 1986, and

(m) sections 160, 824, 825 and 826 of, [F5 and paragraph 6B of Schedule 3 to] and paragraph 3 of Schedule 19A to, the M12 Taxes Act 1988. [F6 and]

F7 (n) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .F8 and

[(o) section 14(4) of the Ports Act 1991.]

(3) Regulations under this section may—

(a) make different provision for different enactments or for differentpurposes of the same enactment,

(b) either themselves specify a rate of interest for the purposes of anenactment or make provision for any such rate to be determined by referenceto such rate or the average of such rates as may be referred to in theregulations,

(c) provide for rates to be reduced below, or increased above, what theyotherwise would be by specified amounts or by reference to specified formulae,

(d) provide for rates arrived at by reference to averages to be rounded up ordown,

(e) provide for circumstances in which alteration of a rate of interest is oris not to take place, and

(f) provide that alterations of rates are to have effect for periods beginningon or after a day determined in accordance with the regulations in relationto interest running from before that day as well as from or from after thatday.

(4) The power to make regulations under this section shall be exercisable bystatutory instrument which shall be subject to annulment in pursuance of aresolution of the House of Commons.

(5) Where—

(a) the rate provided for by regulations under this section as the rateapplicable for the purposes of any enactment is changed, and

(b) the new rate is not specified in the regulations,

the Board shall by order specify the new rate and the day from which ithas effect.

(6) In section 828(2) of the Taxes Act 1988 (powers to make orders which arenot exercisable by statutory instrument) the words “or section 178(5)of the Finance Act 1989” shall be added at the end.

(7) Subsection (1) shall have effect for periods beginning on or after suchday as the Treasury may by order made by statutory instrument appoint andshall have effect in relation to interest running from before that day as wellas from or from after that day; and different days may be appointed fordifferent enactments.

Textual Amendments

F1 Words in s. 178(2)(f) substituted (1.9.1994 with effect as mentioned in s. 199 of the amending Act) by 1994 c. 9, s. 196, Sch. 19 Pt. III para. 44

F2 S. 178(2)(gg) inserted (6.4.1992) (E.W.S.) by Social Security Act 1990 (c. 27, SIF 113:1) s. 17(10); S.I. 1992/632, art. 2

F3 Words in s. 178(2)(gg) substituted (1.7.1992) by Social Security (Consequential Provisions) Act 1992 (c. 6), ss. 4, 7(2), Sch. 2 para. 107

F4 s. 178(2)(i) substituted (in relation to tax for the year 1992-1993 and subsequent years subject as mentioned in s. 289 of the substituting Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 289, 290, Sch. 10 para. 19(4) (with ss. 60, 101(1), 171, 201(3))

F5 Words in s. 178(2)(m) inserted (16.7.1992 with effect in relation to transactions effected on or after 1.10.1992) by Finance (No. 2) Act 1992 (c. 48), s. 63, Sch. 11 paras. 5, 6

F6 “and” inserted by Finance Act 1990 (c. 29, SIF 58), s.118(8)

F7 S. 178(2)(n) repealed (1.5.1995) by 1995 c. 4, s. 162, Sch. 29 Pt. XII

F8 S. 178(2)(o) and word immediately proceeding it inserted (G.B.) by Ports Act 1991 (c. 52, SIF 58), s. 14(5).

Modifications etc. (not altering text)

C1 S. 178 applied by Ports Act 1991 (c. 52, SIF 58), s. 14(4).

S. 178 applied (27.7.1993) by 1993 c. 34, s. 173, Sch. 19 Pt. II para. 11(4)

S. 178 applied (1.9.1994 with effect as mentioned in s. 199 of 1994 c. 9) by 1970 c. 9, s. 59C (as inserted by 1994 c. 9, s. 194)

S. 178 applied (1.5.1995) by 1995 c. 4, s. 157(6)

S. 178 extended (1.5.1995) by 1995 c. 4, s. 157(6)

C2 For regulations see S.I. 1989/1297 (inPart III Vol. 5).And see Tables Iand O Vol. 1

C3 Power of appointment conferred by s. 178(7) partly exercised: 18.8.1989 appointed by S.I. 1989/1298 for all the enactments specified in s. 178(2) other than s. 87A of the 1970 Act and s. 826 of the 1988 Act

Marginal Citations

M1 1894 c. 30.

M2 1896 c. 28.

M3 1910 c. 8.

M4 1925 c. 20.

M5 1925 c. 21.

M6 1970 c. 9.

M7 1973 c. 51.

M8 1975 c. 22.

M9 1992 c. 12.

M10 1976 c. 24.

M11 1984 c. 51.

M12 1986 c. 41.

179 Provisions consequential on section 178. U.K.

(1) The words “rate applicable under section 178 of the Finance Act 1989”shall be substituted—

(a) for the words from “rate” to “annum” in—

(i) section 18(1) of the M13 Finance Act 1896,

(ii) section 61(5) of the M14 Finance (1909-10) Act 1910,

(iii) section 17(3) of the M15 Law of Property Act 1925,

(iv) section 73(6) of the M16 Land Registration Act 1925,

(v) paragraphs 15(1) and 16 of Schedule 2, and paragraph 8(4) of Schedule 5,to the M17 Oil Taxation Act 1975,

F9 (vi) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(vii) sections 824(1) and 825(2) of the Taxes Act 1988,

(b) for the words“ perscribed rate” in—

(i) sections 86(1), 86A(1), 87(1), 87A(1) and (5) and 88(1) of the M18 Taxes Management Act 1970,

(ii) paragraph 3(4) of Schedule 16A to the M19 Finance Act1973, and

(iii) paragraph 3(4) of Schedule 19A to the Taxes Act 1988,

(c) for the words “rate which” onwards in—

(i) paragraph 59(1) of Schedule 8 to the M20 Development LandTax Act 1976, and

(ii) section 826(1) of the Taxes Act 1988,

(d) for the words “rate applicable under subsection (2) below” in section233(1) of the M21 Inheritance Tax Act 1984,

(e) for the words “rate for the time being applicable under section233(2)(b) above” in subsection (3), and the words “rate for the timebeing applicable under section 233(2)(a) above” in subsection (4), ofsection 236 of that Act,

(f) for the words “appropriate rate” in section 92(2) of the M22 Finance Act 1986, and

(g) for the words “rate prescribed from time to time by the Treasury byorder” in section 160(5)(d) of the Taxes Act 1988.

(2) In section 8(9) of the M23 Finance Act 1894, for thewords from “such interest” to “per cent.” there shall be substitutedthe words “interest at such rate not exceeding that applicable under section178 of the Finance Act 1989”.

(3) In section 236(4) of the Inheritance Tax Act 1984, for the words “as ifsection 233(1)(b) above had applied” there shall be substituted the words “from the end of the period mentioned in section 233(1)(b) above”.

(4) Any amendment made by subsection (1), (2) or (3) above shall have effect in relation to any period for which section 178(1) above has effect for thepurposes of the enactment concerned.

(5) Section 146(11) of the Taxes Act 1988 shall have effect in relation to anyyear of assessment beginning after the day on which section 178(1) above haseffect for the purposes of section 160 of that Act with the substitution ofthe words “applicable for the purposes of section 160” for the words “prescribed by the Treasury under section 160(5)”.

Textual Amendments

F9 S. 179(1)(a)(vi) repealed (6.3.1992 with effect as mentioned in s. 289(1)(2) of the repealing Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 289, 290, Sch. 12 (with ss. 201(3), Sch. 11 paras. 22, 26(2), 27)

Marginal Citations

M13 1896 c. 28.

M14 1910 c. 8.

M15 1925 c. 20.

M16 1925 c. 21.

M17 1975 c. 22.

M18 1970c. 9.

M19 1973 c. 51.

M20 1976 c. 24.

M21 1984 c. 51.

M22 1986 c.41.

M23 1894 c. 30.

180 Repayment interest: period of accrual. U.K.

(1) In section 48(1) of the M24 Finance Act 1975, after thewords “carry interest” there shall be inserted the words “from the dateon which the sums were paid until the order for repayment is issued”.

(2) In—

(a) paragraph 16 of Schedule 2 to the M25 Oil Taxation Act1975,

(b) section 105(7) of the M26 Finance Act 1980,

(c) paragraph 13(4) and (5) of Schedule 16 to the M27 FinanceAct 1981, and

(d) paragraph 10(4) of Schedule 19 to the M28 Finance Act1982,

for the word “repayment” there shall be substituted the words “theorder for repayment is issued”.

(3) In paragraph 59(1) of Schedule 8 to the M29 DevelopmentLand Tax Act 1976, after the word “later,” there shall be inserted thewords “until the order for repayment is issued”.

(4) In section 235(1) of the M30 Inheritance Tax Act 1984(and paragraph 19(3) of Schedule 4 to the M31 Finance Act1975), after the word “made” there shall be inserted the words “untilthe order for repayment is issued”.

(5) In section 92(2) of the M32 Finance Act 1986, for thewords “the time it was paid” there shall be substituted the words “thedate on which the payment was made until the order for repayment isissued”.

(6) In section 826(1) of the Taxes Act 1988, for the words “that repaymentor payment is made” there shall be substituted the words “the order forrepayment or payment is issued”.

(7) The amendments made by this section shall be deemed always to have hadeffect.

Marginal Citations

M24 1975 c. 7.

M25 1975 c. 22.

M26 1980 c. 48.

M27 1981 c. 35.

M28 1982 c. 39.

M29 1976 c. 24.

M30 1984 c. 51.

M31 1975 c. 7.

M32 1986 c. 41.