Finance Act 1989

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) sections 86, 86A, 87, 87A and 88 of the M6 TaxesManagement Act 1970,

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

[F1 (gg) [F2 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,

F3 [(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, and paragraph 3 of Schedule 19A to, the M12 Taxes Act 1988. [F4 and]

[F5 (n) section 118(7) of the Finance Act 1990.][F6 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 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

F2 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.

F3 s. 178(2)(i) substituted (6.3.1992 with effect as mentioned in s. 289(1)(2) 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), 201(3))

F4 “and” inserted by Finance Act 1990 (c. 29, SIF 58), s.118(8)

F5 S. 178(2)(n) inserted by Finance Act 1990 (c. 29, SIF 58),s. 118(8)

F6 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).

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.