Finance Act 1967

PART I Customs and Excise

1 Termination of surcharge under Finance Act 1961 s. 9 and related increases in duties.

(1) As from 12th April 1967 or, in the case of the duties referred to in subsection (3) of this section, as from six o'clock in the evening on 11th April 1967, the adjustment of ten per cent. having effect under subsection (2) of section 9 of the [1961 c. 36.] Finance Act 1961 by virtue of the [S.I. 1966/884.] Surcharge on Revenue Duties Order 1966 shall no longer have effect in relation to the duties or taxes to which that Order applies or any drawback, rebate, allowance or other payments in connection with any of those duties or taxes; but—

(a) the provisions of subsections (2) to (4) of this section shall have effect with a view to making in the rates of those duties and taxes increases which, taking into account international agreements and other relevant matters, are comparable to the amount of the adjustment aforesaid, together, in the case of goods to which certain of those duties relate, with a further amount towards offsetting in part the loss of revenue in connection with those goods resulting from the provisions of sections 4 and 5 of this Act; and

(b) the period after which orders of the Treasury under the said section 9 may not be made or continue in force (which, by section 16 of the [1966 c. 18.] Finance Act 1966, was extended until the end of August 1967) shall extend until the end of August 1968 or such later date as Parliament may hereafter determine.

(2) As from 12th April 1967, for the following provisions of the [1964 c. 49.] Finance Act 1964, as amended by section 1(1) of the [1965 c. 25.] Finance Act 1965, setting out rates of customs and excise duties and of drawback, namely—

(a) Table 1 in Schedule 1 (spirits other than imported perfumed spirits);

(b) Schedule 2 (beer);

(c) Schedule 3 (wine);

(d) Schedule 4 (British wine),

there shall be substituted the provisions set out in Schedules 1, 2, 3 and 4 respectively to this Act; but this subsection shall not affect the rates of drawback payable in the case of goods in respect of which duty has been paid otherwise than at the rates having effect by virtue of this subsection.

(3) As from six o'clock in the evening of 11th April 1967—

(a) section 2 of the [1964 c. 92.] Finance (No. 2) Act 1964 (which provides for a duty of customs at the rate of three shillings and threepence a gallon to be charged on imported hydrocarbon oils and for a duty of excise at the same rate to be charged on hydrocarbon oils produced in the United Kingdom, on petrol substitutes, and on spirits used for making power methylated spirits) shall have effect with the substitution for the words " three shillings and threepence " of the words " three shillings and sevenpence " ;

(b) the rate at which rebate of the customs or excise duty on hydrocarbon oils is allowed under section 199 of the Act of 1952 for heavy oils delivered for home use shall in all cases be a rate 2.2 pence a gallon less than the rate at which the duty in question is for the time being chargeable;

(c) section 6(4) of the [1964 c. 49.] Finance Act 1964 (which provides in certain cases where light oils charged with the customs or excise duty on hydrocarbon oils are delivered for home use as furnace fuel for a rebate of duty at a rate twopence a gallon less than the rate at which the duty is charged) shall have effect with the substitution for the word " twopence " of the words " 2-2 pence " ;

(d) subsection (2) of section 92 of the [1965 c. 25.] Finance Act 1965 (which provides that the amount of a grant under subsection (1) of that section by the Minister of Transport to the operator of a bus service towards defraying customs or excise duties charged on bus fuel shall not exceed sixpence for every gallon of fuel used or estimated to have been used in operating the bus service during the period to which the grant relates) and section 1(1)(b) of the [1966 c. 46.] Bus Fuel Grants Act 1966 (which amends the said subsection (2)) shall have effect as if for any reference therein to sixpence there were substituted a reference to tenpence, and so much of subsection (9) of the said section 92 as enables the Parliament of Northern Ireland to make laws for purposes similar to the purposes of the provisions of that section shall apply to those provisions as amended by this paragraph.

(4) As from 12th April 1967, Schedule 1 to the [1963 c. 9.] Purchase Tax Act 1963 shall have effect with the substitution for any reference to 10 per cent., 15 per cent. or 25 per cent. of a reference respectively to 11 per cent., 16 ½ per cent. or 27 ½ per cent.

(5) The provisions of Schedule 5 to this Act shall have effect for the purpose of—

(a) revising the definition of light oils for the purposes of the duties on hydrocarbon oils ; and

(b) making certain amendments as respects drawback, remission, or repayment of duty on beer.

2 Provisions as to continental shelf.

(1) Any goods brought into the United Kingdom which are shown to the satisfaction of the Commissioners to have been grown, produced or manufactured in any area for the time being designated under section 1 (7) of the [1964 c. 29.] Continental Shelf Act 1964 and to have been so brought direct from that area shall be deemed for the purposes of any charge to duty under the [1958 c. 6.] Import Duties Act 1958 not to be imported.

(2) The Board of Trade may by regulations prescribe cases in which, with a view to exempting any goods from any duty, or charging any goods with duty at a reduced or preferential rate, under any of the enactments relating to duties of customs the continental shelf of any country prescribed by the regulations, or of any country of a class of countries so prescribed, shall be treated for the purposes of such of those enactments or of any instruments made thereunder as may be so prescribed as if that shelf formed part of that country and any goods brought from that shelf were consigned from that country; and in this subsection the expression " continental shelf ", in relation to any country, means—

(a) if that country is the United Kingdom, any area for the time being designated as aforesaid ;

(b) in any other case, the seabed and sub-soil of the submarine areas adjacent to the coast, but outside the seaward limits of the territorial waters, of that country over which the exercise by that country of sovereign rights in accordance with international law is recognised or authorised by Her Majesty's Government in the United Kingdom.

(3) Any regulations under subsection (2) of this section shall be made by statutory instrument and be subject to annulment in pursuance of a resolution of the Commons House of Parliament.

(4) Anything required or authorised by or under subsections (2) and (3) of this section to be done by, to or before the Board of Trade may be done by, to or before the President of the Board, any Minister of State with duties concerning the affairs of the Board, any secretary, under-secretary or assistant secretary of the Board, or any person authorised in that behalf by the President.

3 Disclosure of information by Commissioners.

(1) On being notified at any time by the Secretary of State that he is satisfied that it is in the national interest that the information in question should be disclosed to persons other than the Commissioners, the Commissioners may disclose through such person as may be specified in the notification such information to which this section applies in respect of imported goods of such descriptions as may be so specified.

(2) The information to which this section applies is information contained in any document with which the Commissioners have been provided after 7th March 1967 in pursuance of the Act of 1952 for the purpose of making entry of any goods on their importation, being information of the following descriptions only, namely—

(a) the description of the goods, including any maker's catalogue number;

(b) the quantities of the goods imported in a particular period, so, however, that if any quantity is given by value it shall not also be given in any other form;

(c) the name of the maker of the goods ;

(d) the country of origin of the goods ;

(e) the country from which the goods were consigned.

(3) The Secretary of State may by order add to the descriptions of information to which this section applies any further description of information contained in any document such as is mentioned in subsection (2) of this section other than the price of the goods or the name of the importer of the goods; and any such order shall be made by statutory instrument and—

(a) may vary or revoke any previous order under this subsection; and

(b) shall be subject to annulment in pursuance of a resolution of either House of Parliament.

4 Amendments as to excise licences for certain trades.

(1) The duty of excise charged on—

(a) a licence to manufacture spirits granted under section 93 of the Act of 1952 ; or

(b) a licence to brew beer for sale granted under section 125 of that Act; or

(c) a licence to add solutions to beer granted under section 126 of that Act; or

(d) a licence to manufacture tobacco granted under section 175 of that Act,

shall in every case be fifteen pounds fifteen shillings; and accordingly in subsection (2) of each of the said sections 93, 125, 126 and 175 for the words from " calculated " to " Act " there shall in each case be substituted the words " of fifteen pounds fifteen shillings " , and Schedules 1, 2, 3 and 5 to the Act of 1952 shall cease to have effect.

(2) Section 168 of the Act of 1952 (which provides for a reduced duty on certain part-year licences) shall apply to any licence such as is mentioned in paragraph (a), (b), (c) or (d) of subsection (1) of this section as it applies to the licences mentioned in the said section 168; and section 169(2) of the Act of 1952 (which provides for relief from duty on the permanent discontinuance of a trade) shall apply to a licence such as is mentioned in the said paragraph (d) as it applies to the licences mentioned in the said paragraphs (a), (b) and (c).

(3) The foregoing provisions of this section shall have effect in relation to licences bearing a date after 11th April 1967.

(4) In subsection (5) of the said section 93 (which provides that the Commissioners may in certain cases refuse to grant a distiller a licence to manufacture spirits unless he provides lodgings for the officers placed in charge of his distillery) for the words " equal to the gross annual value of the lodgings as determined for the purposes of income tax under Schedule A " (being words relating to the rent to be paid for the lodgings in default of agreement) there shall be substituted the words " equal—

(a) if the lodgings are in England or Wales, to their gross value for the purposes of section 19 of the [1967 c. 9.] General Rate Act 1967;

(b) if the lodgings are in Scotland, to their gross annual value ascertained in accordance with the provisions of section 6(2) to (4) of the [1956 c. 60.] Valuation and Rating (Scotland) Act 1956 for the purpose of making up the valuation roll;

(c) if the lodgings are in Northern Ireland, to their annual value ascertained in accordance with Schedule 5 to the [1963 c. 25.] Finance Act 1963."

(5) Without prejudice to the provisions of section 226 of the Act of 1952 (which requires a licence under that section to be held by any person keeping or using a still otherwise than as a holder of a licence of certain descriptions), an excise licence shall not be required for the purpose of carrying on the trade of a maker of vinegar for sale; and accordingly—

(a) the following provisions of the Act of 1952 shall cease to have effect, namely—

(i) section 225 ;

(ii) in section " 226(1) the words " or vinegar-maker ";

(iii) in section 227(1)(a) and (c), the words " or vinegar-makers ";

(iv) section 237(2)(d);

(v) in section 307(1), the paragraph beginning " vinegar-maker " ; and

(b) in section 106(1)(d) of that Act at the beginning there shall be inserted the words " not being a vinegar-maker, ";

and the foregoing provisions of this subsection shall be deemed to have come into force on 6th July 1967, and, in the case of any licence under the said section 225 bearing a date after 11th April 1967, no excise duty shall be chargeable thereon and any duty paid thereon shall be repaid.

(6) Subsections (1) to (4) of this section shall extend to Northern Ireland, but—

(a) their application to Northern Ireland shall be without prejudice to the operation after the passing of this Act of section 21(3) of the [1920 c. 67.] Government of Ireland Act 1920;

(b) section 22(1) of that Act shall not apply to the duty on any licence such as is mentioned in the said subsection (1) which bears a date after 11th April 1967;

(c) for the purposes of section 6 of that Act, the said subsections (1) to (4) shall be deemed to have been passed before the day appointed for the purposes of that section; and

(d) it is hereby declared that the Parliament of Northern Ireland has power to make laws for purposes similar to the purposes of sections 93(3) to (6) and 125(4), and of the proviso to section 175(1), of the Act of 1952, but that, for the purpose of the exercise of that power in relation to section 93(5) of that Act, section 314(1) of that Act shall apply only to the first reference to the Commissioners in the said section 93(5).

5 Abolition of retailer's licences and club licences and consequential provisions.

(1) As from 1st October 1967, an excise licence shall not be required for the sale by retail of intoxicating liquor or for the supply of such liquor in a registered club to members of that club and their guests; and accordingly as from that date—

(a) the enactments specified in Part I of Schedule 16 to this Act (other than section 4(6) of the [1959 c. 58.] Finance Act 1959) shall cease to have effect;

(b) the provisions of the excise Acts specified in Schedule 6 to this Act shall have effect subject to the amendments so specified;

(c) the [1964 c. 26.] Licensing Act 1964 shall have effect subject to the provisions of Schedule 7 to this Act;

(d) the Licensing (Scotland) Acts 1959 and 1962 shall have effect subject to the provisions of Schedule 8 to this Act;

(e) in section 107(1) of the [1933 c. 12.] Children and Young Persons Act 1933, in the definition of " intoxicating liquor ", for the words from " means " onwards there shall be substituted the words " has the same meaning as in the Licensing Act 1964 ".

(2) No duty of excise shall be charged on any licence under any of sections 149 to 154 of the Act of 1952 or section 4 of the Finance Act 1959 which is granted so as to come into force after 11th April 1967, and any such duty paid on such a licence so granted shall be repaid; and as from 11th April 1967 section 4(6) of the said Act of 1959 (which relates to certain repayments in respect of club licences under the said section 4) shall have effect as if—

(a) for paragraphs (a) and (b) there were substituted the words " before 1st February 1968 or such later date as the Commissioners may allow ";

(b) in paragraph (i) for the words " period for which the licence was in force " there were substituted the words " period beginning with the coming into force of the licence and ending with 31st December 1967 ".

(3) In this section the expression " registered club " means a club which is registered within the meaning of the [1964 c. 26.] Licensing Act 1964 or which is a registered club within the meaning of the [1959 c. 21.] Licensing (Scotland) Act 1959.

6 Abolition of permits for spirits and tobacco and consequential provisions.

(1) It shall not be necessary for—

(a) spirits sent out from a distillery, or removed from a warehouse, or otherwise removed from any place in the United Kingdom to any other such place; or

(b) unmanufactured tobacco removed from a warehouse or otherwise removed as aforesaid,

to be accompanied by a permit; but the provisions of subsections (2) and (3) of this section shall apply to the sending out or removal of spirits.

(2) The person by whom any spirits—

(a) are sent out from a distillery; or

(b) are removed from a warehouse ; or

(c) not being spirits to which the requirement imposed by the [1960 c. 44.] Finance Act 1960 to send a spirits consignment note applies, are otherwise removed from any place in the United Kingdom to any other such place in a quantity exceeding one gallon of the same denomination at a time for any one person,

shall, subject to any dispensation granted by the Commissioners, send to the person to whom the spirits are to be delivered a spirits advice note, and shall send that note either with the spirits or so that it is either delivered or posted on the day on which the spirits are sent out or removed.

(3) A distiller shall not send out from his distillery, or, save as permitted by the Commissioners in the case of samples, remove from a distiller's warehouse associated with his distillery, any spirits in a quantity of less than nine gallons.

(4) The following provisions shall cease to have effect, namely—

(a) in the Act of 1952, section 108, section 147(1) from " and where " onwards, and sections 147(2), 174, 241(1), (3) and (4) and 242(1)(a) and (b);

(b) in the [1960 c. 44.] Finance Act 1960, section 3(3);

and the provisions of the Act of 1952 specified in Schedule 9 to this Act shall have effect subject to the amendments there specified, being amendments for the purpose of applying those provisions to spirits advice notes or otherwise consequential on the provisions of this section.

(5) In this Act and the Act of 1952, the expression " spirits advice note " means a document containing such particulars as the Commissioners may direct.

(6) This section and the said Schedule 9 shall have effect as from the expiration of the period of seven days beginning with the date of the passing of this Act.

7 Pool betting duty.

(1) As from 1st September 1967, and without prejudice to the requirements of any other enactment, no person shall carry on a business the carrying on of which involves or may involve any sums becoming payable by him by way of the pool betting duty unless he holds a permit authorising him to carry on that business granted by the Commissioners in respect of his relevant premises; and paragraph 2(a) of Schedule 1 to the principal Act (which requires seven days' notice of intention to carry on such a business to be given to the Commissioners) shall cease to apply in relation to the carrying on of such a business without prejudice to its application by virtue of paragraph 2 of Schedule 3 to the [1966 c. 18.] Finance Act 1966 to the carrying on of any other business.

(2) A permit under this section shall be granted by the Commissioners within fourteen days of the date (which may be any time after the passing of this Act) when application is made therefor, and shall continue in force unless and until revoked under subsection (4) of this section, except that—

(a) the Commissioners may refuse to grant such a permit to any person or in respect of any premises if within the twelve months immediately preceding the application therefor a previous permit under this section granted to that person or in respect of those premises has been revoked under the said subsection (4); and

(b) the Commissioners may at any time revoke such a permit by notice in writing to the holder if it appears to them that the holder is not carrying on a business for which such a permit is required or is not using the premises in respect of which the permit was granted for the purposes of such a business.

(3) If any dispute arises between the Commissioners and a conductor of dutiable betting as to the basis on which the pool betting duty payable by that conductor should be computed in connection with betting in accordance with any particular terms—

(a) the Commissioners shall by notice in writing to that conductor specify what in their opinion that basis should be; and

(b) in connection with betting in accordance with these terms the amount from time to time computed in accordance with that basis shall be recoverable as the duty properly due;

but if that conductor disputes the correctness of the basis specified by the notice—

(i) he may at any time within three months of the date of the notice, and subject to his having paid and continuing to pay the full amount which, in accordance with that basis, is due from him by way of the duty, apply to the High Court or, in Scotland, to the Court of Session for a declaration as to the basis on which the duty should be computed in connection with betting in accordance with the terms in question; and

(ii) if on any such application the Court makes a declaration specifying a different basis from that specified in the notice, the notice shall be amended accordingly and any amount by which duty is found to have been overpaid shall be repaid by the Commissioners together with interest thereon from the date of the overpayment at such rate as the Court may determine or, as the case may be, any amount by which duty is found to have been underpaid shall be recoverable as duty properly due.

(4) The pool betting duty chargeable on any bet shall be recoverable jointly and severally from all or any of the following persons, namely—

(a) the conductor of the dutiable betting by way of which the bet was made ;

(b) any other person responsible for the management of that conductor's relevant premises ;

(c) where that conductor or that other person is a company, any director of that company ;

and if, after a notice under subsection (3) of this section has been given to any such conductor in respect of betting in accordance with particular terms, any amount determined in accordance with the basis specified in that notice which has become due from that conductor by way of the duty in respect of such betting is not paid in accordance with paragraph 1 of Schedule 1 to the principal Act, the Commissioners may by notice in writing to that conductor revoke his permit under this section.

(5) If any person carries on any business in contravention of subsection (1) of this section, he shall be liable to a penalty of five hundred pounds, and if any person so carries on any business after receiving notice under subsection (4) of this section of the revocation of a permit under this section previously granted to him he shall be liable to an additional penalty of twenty-five pounds for each day after the date of that notice on which he has so carried on his business; and where a person is convicted of an offence under this subsection the Court may, in lieu of or in addition to ordering him to pay such a penalty as aforesaid, order him to be imprisoned for a term not exceeding two years ; and paragraph 6 of Schedule 1 to the principal Act (which relates to offences committed by a body corporate) shall apply to any offence under this subsection as it applies to an offence under that Schedule.

(6) Where a person is convicted of an offence under subsection (5) of this section and the offence continues after the conviction, he shall be guilty of a further offence under that subsection and may, on conviction, be punished accordingly.

(7) If at any time the holder of a permit under this section fails to produce his permit for examination within such period, and at such time and place, as may be reasonably required by an officer, he shall be liable to a penalty of twenty pounds.

(8) Paragraph 13(f) of Schedule 2 to the [1963 c. 2.] Betting, Gaming and Lotteries Act 1963 (which requires the rules applying to any competition promoted by a registered pools promoter to be notified to the accountant appointed for the purpose by the registering authority before the first of the relevant sporting or other events takes place) shall have effect with the insertion after the word " notified " of the words " to the Commissioners of Customs and Excise and "; and if any such promoter is, under paragraph 29(2) of the said Schedule 2, guilty of an offence by reason of a failure to comply with the duty imposed on him by virtue of this subsection—

(a) paragraph 29(3) of that Schedule (which empowers the registering authority to take proceedings for such an offence in England) shall not apply ; but

(b) sections 281 and 287 of the Act of 1952 (which relate respectively to the institution of proceedings and the application of penalties imposed and costs or, in Scotland, expenses awarded under the excise Acts) shall apply in relation to that offence and to any fine imposed or costs or expenses awarded in connection therewith as if they were an offence or, as the case may be, a penalty imposed or costs or expenses awarded under the excise Acts.

(9) In this section, the following expressions have the following meanings respectively, namely—

• " conductor of dutiable betting " means a person carrying on such a business as is mentioned in subsection (1) of this section;

• " dutiable betting " means betting by way of pool betting or coupon betting;

• " premises " includes a totalisator;

• " principal Act " means the [1963 c. 3.] Betting Duties Act 1963 ;

• " relevant premises ", in relation to any person, means premises of which that person has made entry in pursuance of paragraph 2 of Schedule 1 to the principal Act or about which that person has notified the Commissioners in accordance with section 7(4)(a) of the [1964 c. 49.] Finance Act 1964;

and any other expression used in this section which is also used in the principal Act or in section 7(3) of the Finance Act 1964 has the same meaning in this section as in that Act or, as the case may be, in the said section 7(3).

8 Relief from purchase tax for certain imported goods.

(1) Where any goods or articles such as are mentioned in subsection (4) of section 21 of the [1963 c. 9.] Purchase Tax Act 1963 have been imported into the United Kingdom for a registered wholesale merchant as stock for his business or for a registered manufacturer as materials, the provisions of this section shall have effect for the purpose of giving relief from tax on any chargeable transaction in the United Kingdom after the importation of the goods or articles in lieu of the relief from tax on their importation which, but for the exception from chargeability to tax on importation contained in section 11 of that Act, would have been given under the said section 21.

(2) If—

(a) the importer makes application that relief be given from tax on the goods or articles on any such chargeable transaction; and

(b) the Treasury are satisfied that, if the said exception had not been contained in the said section 11 and an application for relief had been made under subsection (1) of the said section 21, they would have given a direction under that subsection,

the Treasury may direct that tax shall not be payable on the goods or articles on any such transaction or, if it has already been paid, shall be repaid.

(3) Subsections (2) and (3) of the said section 21 shall apply to any application or direction under subsection (2) of this section as they apply to any application or direction under subsection (1) of that section and as if the reference in the said subsection (3) to the tax of which the importer was relieved by a direction under the said subsection (1) included a reference to the tax from which relief was given by a direction under this section.

9 Purchase tax-vehicles acquired for export.

(1) If in the case of any vehicle in respect of which the tax which would otherwise be payable by the manufacturer is remitted under section 23(1) of the [1963 c. 9.] Purchase Tax Act 1963 (which relates to vehicles acquired for export)—

(a) the vehicle is found in the United Kingdom after the date by which the Commissioners on granting the remission directed that it should be exported; or

(b) any other condition imposed by the Commissioners under the said section 23(1) on granting the remission is not complied with,

and the presence of the vehicle in the United Kingdom after that date or the non-observance of that condition has not been authorised for the purposes of this section by the Commissioners, the tax which, but for the said section 23(1), would have been payable by the manufacturer shall become payable forthwith by the person by whom the vehicle was acquired from the manufacturer, or by any other person in whose possession the vehicle is found in the United Kingdom, and be recoverable as a debt due to Her Majesty unless, or except to the extent that, the Commissioners see fit to waive payment of the whole or part thereof, and the vehicle shall be liable to forfeiture under the Act of 1952.

(2) Where a vehicle in respect of which tax has been remitted under the said section 23(1) has been exported but is subsequently brought back into the United Kingdom, then, without prejudice to subsection (1) of this section, the vehicle shall not when so brought back be treated for the purposes of section 11 of the said Act of 1963 as imported into the United Kingdom.

(3) Section 23(2) of the said Act of 1963 (which imposes upon the manufacturer liability for tax in the event of non-observance of any conditions imposed under the said section 23(1)) shall cease to have effect.

(4) This section shall come into force on such day as the Commissioners may by order made by statutory instrument appoint; and any such order shall be subject to annulment in pursuance of a resolution of the Commons House of Parliament.

10 Abolition of functions of Commissioners and officers of Customs and Excise with respect to grant of representation in the case of small estates.

As from such date as the Lord Chancellor and the Secretary of State acting jointly may by order made by statutory instrument appoint, the enactments specified in Part V of Schedule 16 to this Act, being enactments conferring on the Commissioners and officers of Customs and Excise certain functions with respect to applications for grants of representation in the case of small estates, shall cease to have effect.

11 Vehicles excise duty: increased penalties for evasion, and effect of transferring vehicle without licence.

(1) The following provisions of the [1962 c. 13.] Vehicles (Excise) Act 1962—

(a) section 7 (offence of using or keeping unlicensed vehicle),

(b) section 10(4) (offence of failing to pay additional duty before using licensed vehicle so as to attract higher rate), and

(c) section 12(9) (offence of exceeding number of vehicles authorised to be used by trade licence),

being provisions under which the person convicted is liable to an excise penalty of twenty pounds or, if greater, three times the duty there specified, shall be amended by substituting " fifty " for " twenty " and " five " for " three ".

This subsection shall not have effect in relation to offences committed before the passing of this Act.

(2) Where a vehicle for which a licence is in force under that Act is transferred by the holder of the licence to another person, the licence shall be treated for the purposes of the said section 7 as no longer in force unless it is delivered to that other person with the vehicle.

12 Vehicles excise duty: additional liability for keeping unlicensed vehicle.

(1) Where a person convicted of an offence under section 7 of the Vehicles (Excise) Act 1962 (using or keeping an unlicensed vehicle) is the person by whom the vehicle in respect of which the offence was committed was kept at the time it was committed, the court shall, in addition to any penalty which it may impose under that section, order him to pay an amount calculated in accordance with subsections (2) to (4) below.

(2) The said amount shall, subject to subsection (3) below, be an amount equal to one-twelfth of the annual rate of duty appropriate to the vehicle in question for each calendar month or part of a calendar month in the relevant period, and the relevant period shall be one ending with the date of the offence and beginning—

(a) if the person convicted has before that date notified the county council of his acquisition of the vehicle in accordance with regulations under the said Act of 1962, with the date on which the notification was received by the council or, if later, with the expiry of the licence last in force for the vehicle, or

(b) in any other case, with the expiry of the licence last in force for the vehicle before the date of the offence or, if there has not at any time before that date been a licence in force for the vehicle, with the date on which the vehicle was first kept by that person:

Provided that, where the person convicted has been ordered to pay an amount under this section on the occasion of a previous conviction in respect of the same vehicle, and the offence then charged was committed after the date specified above for the beginning of the relevant period, that period shall begin instead with the calendar month immediately following that in which the former offence was committed.

(3) Where the person convicted proves—

(a) that throughout any month or part of a month comprised in the relevant period the vehicle in question was not kept by him, or was neither used nor kept by him on a public road in Great Britain, or was not chargeable with duty, or

(b) that he has paid duty in respect of the vehicle for any such month or part, whether or not on a licence,

the said amount shall be calculated as if that month or part were not comprised in the relevant period.

(4) In relation to any month or part of a month comprised in the relevant period, the reference in subsection (2) above to the annual rate of duty appropriate to the vehicle in question is a reference to the annual rate applicable to it at the beginning of that month or part; and, except so far as it is proved to have fallen within some other class or description for the whole of any such month or part, a vehicle shall be taken for the purposes of this section to have belonged throughout the relevant period to that class or description of vehicle to which it belonged for the purposes of duty at the date of the offence or, if the prosecution so elect, the date when a licence for it was last issued.

(5) Where, on a person's conviction of an offence under the said section 7, an order is made under Part I of the [1948 c. 58.] Criminal Justice Act 1948 placing him on probation or discharging him absolutely or conditionally, the foregoing provisions of this section shall apply as if the conviction were deemed to be a conviction for all purposes.

(6) In the foregoing provisions of this section " duty " and " licence " mean respectively the duty chargeable under, and a licence issued under, the said Act of 1962 or any enactment repealed by that Act, and any reference to the expiry of a licence includes a reference to its surrender, and to its being treated as no longer in force for the purposes of the said section 7 by virtue of section 11(2) above; and, in the case of a conviction for a continuing offence, the offence shall be taken for the purposes of those provisions to have been committed on the date or latest date to which the conviction relates.

(7) The foregoing provisions of this section shall have effect subject to the provisions (applying with the necessary modifications) of any enactment relating to the imposition of fines by magistrates' courts, other than one conferring a discretion as to their amount; and any sum payable by virtue of an order under this section shall be treated as a fine, and the order as a conviction, for the purposes of Part III of the [1952 c. 55.] Magistrates' Courts Act 1952 (including any enactment having effect as if contained in that Part) and of any other enactment relating to the recovery or application of sums ordered to be paid by magistrates' courts.

(8) Any person who is alleged to have used a vehicle in contravention of the said section 7 shall, if required to do so by or on behalf of a chief officer of police or a county council, give such information as it is in his power to give as to the identity of the person by whom the vehicle was kept at the time, and a person failing to comply with a requirement under this subsection shall be guilty of an offence and liable on summary conviction to a fine not exceeding twenty pounds.

(9) This section shall not have effect in relation to any offence committed before the passing of this Act.

(10) In its application to Scotland, this section shall have effect as if for subsections (5) and (7) there were substituted the following subsections respectively:—

“(5) Where a person is convicted on indictment of, or is charged before a court of summary jurisdiction with, an offence under the said section 7, and an order is made under Part I of the [1949 c. 94.] Criminal Justice (Scotland) Act 1949 discharging him absolutely or placing him on probation, the foregoing provisions of this section shall apply as if the conviction on indictment were a conviction for all purposes, or, as the case may be, the making of the order by the court of summary jurisdiction were a conviction.”

“(7) The foregoing provisions of this section shall have effect subject to the provisions (applying with the necessary modifications) of any enactment relating to the imposition of fines by courts of summary jurisdiction, other than one conferring a discretion as to their amount; and any sum payable by virtue of an order under this section shall be treated as a fine, and the order as a conviction, for the purposes of any enactment relating to the recovery or application of sums ordered to be paid by courts of summary jurisdiction.”

PART II Income Tax

13 Charge of income tax for 1967-68.

Income tax for the year 1967-68 shall be charged at the standard rate of 8s. 3d. in the pound, and in the case of an individual whose total income exceeds £2,000 at such higher rates in respect of the excess as Parliament may hereafter determine.

14 Surtax rates for 1966-67.

Income tax for the year 1966-67 shall be charged, in the case of an individual whose total income exceeded £2,000, in respect of the excess at rates in the pound which respectively exceed the standard rate by the amounts by which the higher rates for the year 1965-66, without the increase made by the next following section, exceeded the standard rate for that year (and so that the surtax rates applied by this section are the same as those applied successively for the years 1951-52 to 1964- 65).

15 Increase of surtax rates for 1965-66.

(1) Section 18 of the [1966 c. 18.] Finance Act 1966 (surtax rates for 1965- 66) shall have effect as if each of the surtax rates applied by that section (that is to say, each of the amounts specified in the second column of the table in section 16(1) of the [1951 c. 43.] Finance Act 1951, being the surtax rates applied successively for the years 1951-52 to 1964-65) were increased by ten per cent.

(2) The surtax charged by any assessment for the year 1965-66 made before 1st September 1967 and by reference to the rates applied by the said section 18 as originally enacted shall, unless by that date a further assessment has been made in respect of the tax attributable to subsection (1) above, be treated as from that date as varied in accordance with that subsection by virtue of this Act and without more.

(3) In relation to so much of any surtax for the year 1965-66 as is attributable to subsection (1) above—

(a) section 229(1) of the [1952 c. 10.] Income Tax Act 1952 (due date for payment of surtax by individuals), and section 249(4)(a) of that Act (date for recourse to company in respect of company surtax which a member has failed to pay) shall have effect as if for the references to 1st January (that is to say, 1st January 1967) there were substituted references to 1st September 1967, and

(b) paragraph (b) of the said section 249(4) (date for recourse to member where company fails to pay) shall have effect as if for the reference to 2nd January (that is to say, 2nd January 1967) there were substituted a reference to 2nd September 1967.

(4) The due date for payment of so much of any surtax for the year 1965-66 as is attributable to subsection (1) above shall also be taken to be 1st September 1967, instead of 1st January 1967, for the purposes of section 58(1) of the [1960 c. 44.] Finance Act 1960 (interest on tax recovered to make good loss due to taxpayer's fault).

(5) For the purposes of section 495(3) of the [1952 c. 10.] Income Tax Act 1952 (interest on overdue tax charged by any assessment not to be payable unless the tax exceeds one thousand pounds) the tax charged by any assessment by virtue of subsection (2) above shall be treated as if it had been charged by an assessment separately made.

(6) Sections 359 and 360 of the said Act of 1952 (recovery of tax attributable to wife's income) shall have effect in relation to the tax charged by any assessment by virtue of subsection (2) above as if it had been charged by an assessment separately made, as if that assessment had been made before the service of any notice for the year 1965-66 under subsection (1) of the said section 360, and with any other necessary modifications.

(7) Section 236 of the said Act of 1952 (relief where surtax payer dies in year of assessment for which surtax rates are higher than for previous year) shall, as respects surtax for the year 1965-66, apply to a person who died after the end of that year but before 21st July 1966 as it applies to a person who died in that year.

(8) Where surtax for the year 1965-66 has been assessed on any person in the name of a company which is dissolved before the end of September 1967 (and whether before or after the passing of this Act) and, the assessment having been made by reference to the rates applied for that year by section 18 of the [1966 c. 18.] Finance Act 1966 as originally enacted, a notice of charge under section 249(4) of the said Act of 1952 is served on that person for the additional tax attributable to subsection (1) above, the tax to which the notice relates shall become payable by that person, without any election under the said section 249(4), on whichever of the following is the latest, that is to say, 1st September 1967, the day after the service of the notice, and the day after the dissolution of the company.

(9) Section 21 of the [1965 c. 25.] Finance Act 1965 (under which the rate of capital gains tax may depend on the rates of income tax, including surtax) shall have effect as if the rates of surtax for the year 1965-66 had been those applied by the said section 18 as originally enacted.

16 Alterations in reliefs.

(1) In section 13 of the [1957 c. 49.] Finance Act 1957 (relief for persons over sixty-five with small incomes), as amended by section 10(6) of the [1965 c. 25.] Finance Act 1965, for the references to £390 and £625 (the income limits for exemption) there shall be substituted references to £401 and £643 ; and (as regards the marginal relief) for the reference to £160 (the addition to the income limit) there shall be substituted a reference to £180.

(2) In section 216(1) of the [1952 c. 10.] Income Tax Act 1952 (relief for dependent relative), as amended by section 10(3) of the Finance Act 1965, for the reference to £210 (lower income limit of dependent relative) there shall be substituted a reference—

(a) for the year 1967-68, to £221,

(b) for subsequent years of assessment, to £235,

and, subject to the next following subsection, for the reference to £285 (the higher income limit) there shall be substituted a reference, for the year 1967-68, to £296, and for subsequent years of assessment, to £310.

(3) Where the claimant under section 216 of the Income Tax Act 1952 is a woman other than a married woman living with her husband,—

(a) for the references in subsection (1) of that section to £75 there shall be substituted references to £110, and

(b) for the reference in that subsection (limit on dependent relative's total income) to £285 there shall be substituted a reference to, for the year 1967-68, £331, and for subsequent years of assessment, £345.

(4) Where, without subsection (3) above, the claimant's relief would fall to be reduced by any proportion under subsection (2) of the said section 216 (dependent relative jointly maintained by two or more claimants) any increase in the claimant's relief attributable to subsection (3) above shall be reduced by the same proportion; and accordingly the said subsection (2) shall be read without regard to the amendments made by subsection (3) of this section in subsection (1) of the said section 216.

(5) In section 17(2) of the [1960 c. 44.] Finance Act 1960 (additional relief for widows and others in respect of children) for the reference to £40 there shall be substituted a reference to £75, and section 218 of the Income Tax Act 1952 (which, in cases all of which are within subsection (1) of the said section 17, affords alternative relief of the same amount as that afforded by the said section 17 as amended by this section) shall cease to have effect, except so far as any provisions of that section are applied for the purposes of the said section 17.

(6) This section shall not be deemed to have required any change in the amounts deducted or repaid under section 157 (pay as you earn) of the [1952 c. 10.] Income Tax Act 1952 before 22nd June 1967.

17 Relief where copyright sold after ten years or more.

(1) Where not less than ten years after the first publication of the work the author of a literary, dramatic, musical or artistic work assigns the copyright therein wholly or partially, or grants any interest in the copyright by licence, and—

(a) the consideration for the assignment or grant consists wholly or partially of a lump sum payment the whole amount of which would, but for this section, be included in computing the amount of his profits or gains for a single year of assessment, and

(b) the copyright or interest is not assigned or granted for a period of less than two years,

he shall be entitled to claim that effect shall be given to the following provisions of this section in connection with that payment, and section 9 of the [1964 c. 37.] Income Tax Management Act 1964 shall apply to the claim.

(2) Except where the copyright or interest is assigned or granted for a period of less than six years, the amount of the payment shall for income tax purposes be treated as becoming receivable in six equal instalments at yearly intervals, the first of which becomes receivable on the date on which the payment actually became receivable.

(3) Where the copyright or interest is assigned or granted for a period of less than six years, the payment shall for income tax purposes be treated as becoming receivable in a number of equal instalments at yearly intervals the first of which becomes receivable on the date when the payment actually became receivable, the number being the number of whole years in that period.

(4) Subject to subsection (5) below, if the author dies, any instalment which under this section would, but for the death, be treated as becoming receivable after the death shall for income tax purposes be treated as becoming receivable on the date when the last instalment before the death is to be treated as becoming receivable.

(5) If the personal representatives so elect—

(a) the total amount of income tax (including surtax) which would have been payable by the deceased or out of his estate in respect of the payment if the copyright or interest had been assigned or granted for a period beginning with the date when the first instalment is treated as becoming receivable and ending with the day before the death shall be computed, and

(b) the income tax (including surtax) payable out of the estate by reason of the provisions of subsection (4) above shall be reduced so as not to exceed the amount at (a) above.

The references in this subsection to the income tax (including surtax) payable by a person include, in cases where the income of a wife is deemed to be income of the husband, references to the income tax (including surtax) payable by his wife or her husband, as the case may be.

(6) If the payment would, apart from this section, have been taken into account in assessing the profits or gains of a profession or vocation, and the profession or vocation is permanently discontinued (otherwise than on death) after the date on which the payment actually became receivable, any instalment which under this section would, but for the discontinuance, be treated as receivable on a date after the discontinuance shall for income tax purposes be treated as becoming receivable when the last instalment before the discontinuance is to be treated as becoming receivable, unless the author elects to be treated (for all purposes) as if the copyright or interest had been assigned or granted for a period beginning with the date when the first instalment is treated as becoming receivable and ending with the day before the discontinuance.

(7) Notice of any election under subsection (5) or subsection (6) above shall be served on the inspector within two years of the death, or as the case may be of the discontinuance.

(8) Where, but for this section, the payment would be included in computing any profits or gains chargeable to tax under Case VI of Schedule D, and any amount would be deductible from that payment in computing those profits or gains (whether under the general provisions relating to Case VI or under section 32(4) of the [1960 c. 44.] Finance Act 1960 (post-cessation receipts)), the amount which, under this section, is to be treated as receivable in instalments shall be the amount of the payment after that deduction, and effect shall not be given to that deduction in any other way.

(9) A claim cannot be made under this section in respect of a payment if a prior claim has been made under section 471 of the [1952 c. 10.] Income Tax Act 1952 (relief by spreading payment backwards) as respects that payment, and a claim cannot be made under the said section 471 in respect of a payment if a prior claim has been made under this section as respects that payment.

(10) Where it is necessary, in order to give effect to a claim or election under this section, or as a result of the claim or election, to make any adjustment by way of an assessment on any person, the assessment shall not be out of time if it is made within one year of the final determination of the claim, or as the case may be within one year from the giving of notice of the election.

(11) In this section—

• " author " includes a joint author,

• " lump sum payment " includes an advance on account of royalties which is not returnable,

and the reference to the first publication of a work is a reference to the first occasion on which the work or a reproduction of it is published, performed or exhibited.

(12) This section shall apply to payments falling to be included in computing profits or gains for the year 1967-68 or any subsequent year of assessment.

18 Lloyd's and other underwriters.

(1) Arrangements under Schedule 21 to the [1952 c. 10.] Income Tax Act 1952 (special reserve funds for underwriters) may authorise the making of payments pursuant to paragraph 7(1) of that Schedule (withdrawals from special reserve funds into-premiums trust fund to meet a loss) on a provisional basis before-the amount of the loss has been finally ascertained and certified by the inspector.

(2) The amount so withdrawn shall not exceed such proportion of the estimated loss as may be specified in the arrangements.

(3) When the amount of the loss has been certified by the-inspector such adjustments shall be made by repayment to the underwriter's special reserve fund or funds, or by further withdrawal of sums for payment into the underwriter's premiums, trust fund, as will secure that the net amount withdrawn from the underwriter's special reserve fund or funds in respect of the-loss is that required pursuant to paragraph 7(1) of the said Schedule 21; and no tax consequences shall ensue on the withdrawal of sums in respect of a loss until the amount of the-loss has been so certified and any such adjustments have been made.

(4) This section shall be construed as one with the said, Schedule 21.

PART III Corporation Tax and Income Tax

19 Charge of corporation tax for financial year 1966.

(1) Corporation tax shall be charged for the financial year 1966 at the rate of 40 per cent.

(2) It is hereby declared that where an Act charges corporation tax for any financial year the Corporation Tax Acts apply, without any express provision, for that year accordingly.

20 Group relief.

(1) Relief for trading losses and other amounts eligible for relief from corporation tax may in accordance with Schedule 10 to this Act be surrendered by a company (called " the surrendering company ") which is a member of a group of companies and claimed by another company (called " the claimant company ") which is a member of the same group by way of a new relief from corporation tax to be called group relief.

(2) Group relief shall also be available in accordance with Schedule 10 to this Act—

(a) where the surrendering company is a trading company which is owned by a consortium and which is not a subsidiary of any company, and the claimant company is a member of the consortium, or

(b) where the surrendering company is a trading company—

(i) which is a ninety per cent. subsidiary of a holding company which is owned by a consortium, and

(ii) which is not a subsidiary of a company other than the holding company,

and the claimant company is a member of the consortium, or

(c) where the surrendering company is a holding company which is owned by a consortium and which is not a subsidiary of any company, and the claimant company is a member of the consortium:

Provided that no claim may be made by a member of a consortium if a profit on a sale of the share capital of the surrendering or holding company which that member owns would be treated as a trading receipt of that member.

(3) Subject to Schedule 10 to this Act, two or more claimant companies may make claims relating to the same surrendering company, and to the same accounting period of that surrendering company.

(4) A payment for group relief—

(a) shall not be taken into account in computing profits or losses of either company for corporation tax purposes, and

(b) shall not for any of the purposes of the Corporation Tax Acts be regarded as a distribution or a charge on income,

and in this subsection " payment for group relief " means a payment made by the claimant company to the surrendering company in pursuance of an agreement between them as respects an amount surrendered by way of group relief, being a payment not exceeding that amount.

(5) Section 20 of the [1953 c. 34.] Finance Act 1953 (subvention payments) as applied to corporation tax by paragraph 10 of Schedule 15 to the [1965 c. 25.] Finance Act 1965 shall not have effect in respect of the deficit of any accounting period ending after the passing of this Act.

(6) For the purposes of this section and Schedule 10 to this Act—

(a) two companies shall be deemed to be members of a group of companies if one is the subsidiary of the other or both are subsidiaries of a third company,

(b) " holding company " means a company the business of which consists wholly or mainly in the holding of shares or securities of companies which are its ninety per cent. subsidiaries, and which are trading companies,

(c) " subsidiary " has the meaning assigned to it for certain purposes of the profits tax by section 42 of the [1938 c. 46.] Finance Act 1938, and subsections (2) and (3) of that section shall apply as they applied for the purposes of that section, except that in the application of that section any share capital of a registered industrial and provident society shall be treated as within the definition of ordinary share capital,

(d) " trading company " means a company whose business consists wholly or mainly of the carrying on of a trade or trades.

(7) References in this section and the said Schedule to a company apply only to bodies corporate resident in the United Kingdom; and in determining for the purposes of this section and that Schedule whether one company is a subsidiary of another, the other company shall be treated as not being the owner—

(a) of any share capital which it owns directly in a body corporate if a profit on a sale of the shares would be treated as a trading receipt of its trade, or

(b) of any share capital which it owns indirectly, and which is owned directly by a body corporate for which a profit on the sale of the shares would be a trading receipt, or

(c) of any share capital which it owns directly or indirectly in a body corporate not resident in the United Kingdom.

(8) For the said purposes—

(a) a company shall be deemed to be a ninety per cent. subsidiary of another company if not less than ninety per cent. of its ordinary share capital is directly owned by that other company,

(b) a company is owned by a consortium if all of the ordinary share capital of that company is directly owned between them by five or fewer companies, and those companies are called the members of the consortium,

(c) a member's share in a consortium shall be the percentage of the ordinary share capital of the surrendering company, or as the case may be of the holding company through which the surrendering company is owned, which is owned by that member in the relevant accounting period of the surrendering company, and if that percentage has fluctuated in the accounting period, the average percentage over the period shall be taken,

and in this subsection references to ownership and to ordinary share capital shall be construed in accordance with section 42(3) of the [1938 c. 46.] Finance Act 1938.

21 Capital allowances.

(1) The rate of any initial allowance falling to be made under section 17 of the [1956 c. 54.] Finance Act 1956 (dredging) in respect of expenditure to which section 15 of the [1958 c. 56.] Finance Act 1958 applies shall be three-twentieths except where reduced to one-twentieth under section 21(4)(b) of the [1959 c. 58.] Finance Act 1959 (initial allowance in addition to investment allowance), and the amendment of the said section 17 made by paragraph 10(1) of Schedule 14 to the [1965 c. 25.] Finance Act 1965 (which mentions only the rate of one-twentieth) shall be deemed always to have had effect accordingly.

(2) In subsection (6) of section 56 of the Finance Act 1965 (set-off of capital allowances against total profits chargeable to corporation tax) the reference to an allowance to be made for an accounting period does not include any amount carried forward from a previous accounting period under subsection (5) of that section, and so much of the said subsection (5) as requires an amount so carried forward from one accounting period to another to be treated as the amount of a corresponding allowance for the later period shall not affect the said subsection (6).

The said section 56 of the Finance Act 1965 shall be deemed always to have had effect as amended by this subsection.

(3) The repeals set out in Part IV of Schedule 13 to the [1966 c. 18.] Finance Act 1966 (abolition of investment allowances) shall be deemed never to have extended to paragraph 6 or paragraph 7 of Schedule 2 to the [1954 c. 44.] Finance Act 1954 (which amend sections 292 and 296 of the [1952 c. 10.] Income Tax Act 1952 in connection with cases where no initial allowance is made in respect of machinery or plant, whether or not in consequence of the making of an investment allowance), or to so much of section 16(8) of that Act of 1954 as relates to those paragraphs.

(4) For the avoidance of doubt it is hereby declared—

(a) that section 270(6) of the [1952 c. 10.] Income Tax Act 1952 (classes of income against which allowances in respect of industrial buildings or structures may be made) applies to allowances under section 274 of that Act (temporary disuse of industrial buildings or structures),

(b) that the reference in section 286 of that Act (allowances for machinery or plant for part of a year of assessment) to a writing down (or annual) allowance computed in accordance with the preceding provisions of Chapter II of Part X of that Act includes, where relevant, a reference to an allowance computed in accordance with those provisions and section 14 of the [1965 c. 25.] Finance Act 1965 (new ships),

(c) that by virtue of section 298(2) of the Income Tax Act 1952 references in Acts passed after that Act to writing down (or annual) allowances in respect of machinery or plant include, except where otherwise expressly provided or where the context otherwise requires, references to allowances under subsection (1) of the said section 298 (allowances for lessors of machinery or plant), and

(d) that section 279(2) of the Income Tax Act 1952 (which relates to expenditure incurred by a person for the purposes of a trade before he begins to carry it on) applies, where relevant, for the construction of references to the date when expenditure was incurred in subsections (1) and (3) of section 13 of the Finance Act 1965 (withdrawal of initial allowances for cars in respect of expenditure incurred after 6th April 1965).

22 Farming and market gardening: restriction of relief for losses and capital allowances.

(1) Any loss incurred in a trade of farming or market gardening shall be excluded from section 341 of the Income Tax Act 1952 (set-off of losses and capital allowances against total income) if in each of the prior five years a loss was incurred in carrying on that trade, and where a loss is so excluded any related capital allowance shall also be excluded from the said section 341.

(2) Any loss incurred in any accounting period by a company in carrying on a trade of farming or market gardening shall be excluded from section 58(2) of the Finance Act 1965 (set-off of losses against total profits) if a loss, computed without regard to capital allowances, was incurred in carrying on that trade in that accounting period, and in each of the chargeable periods wholly or partly comprised in the prior five years.

(3) Subsections (1) and (2) above shall not restrict relief for any loss or for any capital allowance, if it is shown by the claimant that the whole of his farming or market gardening activities in the year next following the prior five years are of such a nature, and carried on in such a way, as would have justified a reasonable expectation of the realisation of profits in the future if they had been undertaken by a competent farmer or market gardener, but that if that farmer or market gardener had undertaken those activities at the beginning of the prior period of loss he could not reasonably have expected the activities to become profitable until after the end of the year next following the prior period of loss.

(4) Subsections (1) and (2) above shall not restrict relief where the carrying on of the trade forms part of, and is ancillary to, a larger trading undertaking.

(5) In this section—

• " basis year " in relation to any capital allowance shall be construed in accordance with section 18(2) of the [1962 c. 44.] Finance Act 1962;

• " chargeable period ", in relation to a company, means any accounting period, or any basis period ending before its first accounting period, " basis period " having the meaning given in section 325 of the [1952 c. 10.] Income Tax Act 1952;

• " prior five years "—

  (a)

  in relation to a loss incurred in a year of assessment, means the last five years of assessment before that year;

  (b)

  in relation to a loss incurred in a company's accounting period, means the last five years before the beginning of the accounting period;

• " prior period of loss " means the prior five years except that if losses were incurred in the trade in successive years of assessment or chargeable periods amounting in all to a period longer than five years (and ending when the prior five years end), it means that longer period, and in applying this definition to a chargeable period of a company " losses " means losses computed without regard to capital allowances;

• " farming " and " market gardening " shall be construed in accordance with the definitions of those terms in section 526 of the Income Tax Act 1952, but as if those definitions were not restricted to activities in the United Kingdom,

and the reference in this section to section 341 of the Income Tax Act 1952 includes a reference to that section as extended by section 15(3) of the [1953 c. 34.] Finance Act 1953 (set-off of losses and capital allowances against total income of following year).

(6) For the purposes of this section a capital allowance is related to a loss incurred in a trade if it falls to be made in taxing that trade and its basis year is the year of assessment in which the loss was incurred.

(7) In ascertaining for the purposes of this section whether a loss was incurred in any part of the prior five years, or earlier, the rules applicable to Case I of Schedule D shall be applied, and in this section " loss computed without regard to capital allowances " means, in relation to a chargeable period of a company, a loss so ascertained but so that, notwithstanding section 56(2) of the [1965 c. 25.] Finance Act 1965, no account shall be taken of any allowance or charge under Part X or Part XI of the [1952 c. 10.] Income Tax Act 1952 (capital allowances).

(8) Subsections (1) and (2) above shall not restrict relief for any loss or capital allowance if the trade was set up and commenced within the prior five years, and for the purposes of this subsection a trade shall be treated as discontinued, and a new trade set up, in any event which under any of the provisions of the Income Tax Acts or the Corporation Tax Acts is to be treated as equivalent to the permanent discontinuance or setting up of a trade:

Provided that a trade shall not be treated as discontinued if under section 61(2) of the Finance Act 1965 or section 17 of the [1954 c. 44.] Finance Act 1954 (company reconstructions without change of ownership) it is not to be treated as discontinued for the purpose of capital allowances and charges.

(9) Where at any time before or after the passing of this Act there has been a change in the persons engaged in carrying on a trade this section shall, notwithstanding subsection (8) above, apply to any person who was engaged in carrying on the trade immediately before and immediately after the change as if the trade were the same before and after without any discontinuance, and as if—

(a) a husband and his wife were the same person,

(b) a husband or his wife were the same person as any company of which either the husband or the wife has control, or of which the two of them have control,

and accordingly relief from income tax or from corporation tax may be restricted under this section by reference to losses some of which are incurred in years of assessment and some, computed without regard to capital allowances, are incurred in a company's chargeable periods.

In this subsection " control " has the meaning given by paragraph 3 of Schedule 18 to the Finance Act 1965.

(10) This section shall not apply to restrict relief in respect of a loss incurred in, or any capital allowance the basis year for which is, a year of assessment before 1967-68, or a loss incurred in a company's accounting period beginning before 1st April 1967 (but can apply to a company to prevent a loss from being set off against profits of any such accounting period).

23 Tax-free income of banking businesses, etc., carried on by non-residents.

(1) This section has effect where paragraphs (a) and (b) of section 436(2) of the [1952 c. 10.] Income Tax Act 1952 (interest on tax-free Treasury securities excluded from computation of profits, or profits of annuity business) apply to a business for any accounting period or year of assessment.

(2) Up to the amount determined under this section (called the amount ineligible for relief) interest on money borrowed for the purposes of the business—

(a) shall be excluded in any computation under the Corporation Tax Acts or the Income Tax Acts of the profits (or loss) arising from the business or, where subsection (5) below applies, arising from any annuity business forming part of the life assurance business, and

(b) shall be excluded from the definition of " charges on income " in section 52(2) of the [1965 c. 25.] Finance Act 1965.

(3) In determining the amount ineligible for relief, account shall be taken of all money borrowed for the purposes of the business which is outstanding in the accounting or basis period, up to the total cost of the tax-free Treasury securities held for the purpose of the business in that period:

Provided that where the person carrying on the business is a company, account shall not be taken of any borrowed money carrying interest which, apart from subsection (2) above, does not fall to be included in the computations under paragraph (a) of that subsection, and is not to be treated as a charge on income for the purposes of the Corporation Tax Acts.

(4) Subject to subsection (5) below, the amount ineligible for relief shall be equal to a year's interest on the amount of money borrowed which is to be taken into account under subsection (3) above at a rate equal to the average rate of interest in the accounting or basis period on money borrowed for the purposes of the business, except that in the case of a period of less than twelve months, interest shall be taken for that shorter period instead of for a year.

(5) Where relief for expenses of management is to be granted to an assurance company for any accounting period, and that relief falls to be reduced under section 436(3)(b) of the Income Tax Act 1952 (by applying the fraction which is investment income of the life assurance fund other than income from tax-free Treasury securities divided by that total investment income) the amount ineligible for relief shall be a fraction of the amount of interest in the accounting period on money borrowed for the purposes of the business, and that fraction shall be the fraction which is income from tax-free Treasury securities divided by total investment income of the life assurance fund (that is to say one minus the fraction to be applied under the said section 436(3)(b)).

(6) In this section " tax-free Treasury securities " means securities issued by the Treasury with a condition regulating the treatment of the interest thereon for income tax or corporation tax purposes such that interest on the securities is excluded in computing the income or profits.

(7) For the purposes of this section the cost of a holding of tax-free Treasury securities which has fluctuated in the accounting or basis period shall be the average cost of acquisition of the initial holding, and of any subsequent acquisitions in the accounting or basis period, applied to the average amount of the holding in the accounting or basis period, and this subsection shall be applied separately to securities of different classes.

(8) In this section " accounting or basis period " means the company's accounting period or the period by reference to which the profits or gains arising in the year of assessment are to be computed.

(9) In section 436(2) of the [1952 c. 10.] Income Tax Act 1952 the references to expenses shall not include a reference to interest on borrowed money, and the words " any interest on money borrowed for the purpose of acquiring the securities " and the word " other " (which are superseded by this section) shall cease to have effect.

(10) This section shall be construed as one with the said section 436.

(11) This section shall apply for income tax purposes for the year 1967-68 and subsequent years of assessment, and, without prejudice to section 53(2) of the [1965 c. 25.] Finance Act 1965 (which applies income tax law for corporation tax), shall apply for corporation tax purposes to accounting periods ending on or after 6th April 1967.

24 Amendments of Corporation Tax Acts.

Schedule 11 to this Act, which contains amendments of the Corporation Tax Acts relating to life assurance business, company distributions, close companies, companies which are wound up and the collection of income tax on payments made by companies and other matters dealt with in Schedule 12 to the Finance Act 1965, shall have effect.

PART IV Selective Employment Tax

25 Additional provision for refunds of, and other provisions as to, selective employment tax.

(1) Where the employer in respect of one or more employments of an employed person has paid selective employment tax in respect of that person for any contribution week beginning on or after 4th September 1967 in which that person either worked in the employment or employments in question for an aggregate of less than twenty-one hours or did no work in the employment or employments in question, then, except where—

(a) the employed person was treated for the purpose of the tax as a boy or girl under the age of eighteen ; or

(b) any contract in pursuance of which he worked in that employment or any of those employments, or the holding of any office constituting that employment or one of those employments, normally involved that person's working in the employment or employments in question for an aggregate of twenty-one or more hours weekly,

and subject to paragraphs 2, 3 and 5 of Schedule 12 to this Act, the Minister of Social Security (hereafter in this section and in that Schedule referred to as " the Minister ") shall make to that employer in respect of that person and that week a payment of an amount equal to half the tax paid; and for the purposes of this subsection—

(i) in the case of any employment in which any of the employed person's remuneration was calculated by reference to an hourly rate in respect of each hour for which he worked or was treated as working in that employment, there shall be taken into account as his hours of work in that employment those hours, and those hours only, for which he was paid remuneration calculated wholly or partly by reference to such a rate;

(ii) in the case of any other employment, there shall be taken into account as part of that person's hours of work in that employment any intervals allowed for meals and rest;

(iii) a person employed in any contribution week in different employments by different employers who are associated companies shall, except as the Minister may in any particular case or class of cases otherwise direct, be treated as employed in that week in both or all of those employments by the employer by whom the tax in respect of that person for that week was paid.

(2) Where an employer has paid selective employment tax in respect of an employed person for a continuous period of more than thirteen contribution weeks during which that person has been employed by him wholly outside both the United Kingdom and any area for the time being designated under section 1(7) of the [1964 c. 29.] Continental Shelf Act 1964, then, subject to paragraphs 2, 4 and 5 of Schedule 12 to this Act, in respect of each of those contribution weeks which, not being earlier than the fourteenth of them, began on or after 4th September 1967, the Minister shall make to that employer a payment of an amount equal to the tax paid in respect of that person for that week; and for the purposes of this subsection—

(a) an employed person may be treated as having been employed wholly as aforesaid during any period notwithstanding that he has within that period been present in the United Kingdom or any such area as aforesaid if he has not at any time during that period been so present for a period of consecutive days which includes more than twenty-one disqualifying days, that is to say, days which are neither days in a week left out of account by virtue of paragraph (b) of this subsection nor other days on which either he was incapable of work by reason of some specific disease or bodily or mental disablement or he was on leave, whether paid or unpaid, but—

(i) for the purposes of this paragraph a day on which that person would not in the normal course have worked in his employment and on which he did not so work shall be treated as a day of leave if, but only if, it is a day in a period of seven consecutive days of leave; and

(ii) the employer shall not be entitled in respect of that person to a payment under this subsection in respect of any contribution week which contains one or more of those disqualifying days other than a day or days on which he did no work in his employment;

(b) in determining whether any contribution weeks form a continuous period, there shall be left out of account any such week for which tax was not paid by reason of the employed person's being either incapable of work as aforesaid or on unpaid leave, whether that person was in or outside the United Kingdom or any such area as aforesaid during that week ;

(c) a person employed in different contribution weeks forming a continuous period by different employers who are associated companies shall, except as the Minister may in any particular case or class of cases otherwise direct, be treated as respects any contribution week in that period as if he had been employed in, and tax in respect of him had been paid for, all previous contribution weeks in that period by the employer by whom the tax in respect of him was paid for the contribution week in question.

(3) The supplementary and additional provisions contained in Schedule 12 to this Act shall have effect for the purposes of this section and the other enactments relating to selective employment tax.

26 Regional employment premium.

(1) Where, in the case of a person in an employment to which section 1 of the principal Act applies in respect of whom a payment under that section falls to be made to the employer, the establishment in or from which that employment is carried out is situated wholly within a development area, then, subject to subsections (2), (4) and (5) of this section, the amount of that payment shall, in respect of any contribution week beginning on or after 4th September 1967, be increased—

(a) if that person was treated for the purpose of selective employment tax for that week as a man over the age of eighteen, by thirty shillings ; or

(b) if that person was treated for that purpose as a woman over the age of eighteen, by fifteen shillings; or

(c) if that person was treated for that purpose as a boy under the age of eighteen, by fifteen shillings; or

(d) if that person was treated for that purpose as a girl under the age of eighteen, by nine shillings and sixpence.

(2) Where in any contribution week the person aforesaid was employed by the employer in question in an employment to which section 1 of the principal Act applies, but—

(a) he worked in that employment for an aggregate of less than twenty-one hours, or he did no work in that employment; and

(b) that employment was not in pursuance of a contract or as the holder of an office which normally involved that person's working in that employment for an aggregate of twenty-one or more hours weekly,

the amount of any increase in respect of that person and that week by virtue of subsection (1) of this section, instead of being that for the time being specified in paragraph (a), (b), (c) or (d), as the case may be, of that subsection, shall be one half of the amount for the time being so specified; and paragraphs (i) and (ii) of section 25(1) of this Act shall apply for the purposes of this subsection as they apply for the purposes of the said section 25(1).

(3) In section 3(2)(a) of the principal Act (which provides for the making to certain employers who are public bodies of payments corresponding to the payments made to other employers under section 1 of that Act), the reference to the appropriate additions specified in paragraphs (a) to (d) of section 1(1) of that Act shall, in relation to persons employed in any such part of the undertaking of an employer to whom the said section 3 applies as is specified in Part III of Schedule 1 to that Act who are so employed at or from places Situated wholly within development areas, be construed as including a reference to the appropriate increases for the time being specified in paragraphs (a) to (d) of subsection (1) or in subsection (2) of this section.

(4) The Minister of Labour shall not be required by virtue of subsection (1) of this section to increase any payment to an employer under section 1 of the principal Act in respect of any person and any contribution week unless the employer produces such records as that Minister may reasonably require—

(a) of the number of hours worked by that person in that week; and

(b) of the number of hours of work in a week normally involved for that person in consequence of the terms of any contract or by reason of any office held by him.

(5) The Treasury may by order made by statutory instrument—

(a) substitute for all or any of the amounts specified in subsection (1)(a) to (d) of this section such other amount or amounts as may be specified in the order;

(b) in a case where increases by virtue of this section have been paid in connection with any establishment but cease to be payable by reason of a change in the development areas, provide for increases to continue to be paid by virtue of this section in connection with that establishment for such period as may be specified in the order and of such amount or amounts as may be so specified either in relation to the whole of that period or in relation to different parts of that period ;

and any such order may be made either in relation to all development areas or in relation only to such development areas or parts of development areas as are specified in the order, and may vary or revoke any previous order under this subsection ; but no such order shall be made unless a draft thereof has been approved by resolution of each House of Parliament.

(6) In this section—

(a) the expression " development area " means an area for the time being specified as a development area under section 15(2) of the [1966 c. 34.] Industrial Development Act 1966, and includes any such locality outside that area as is specified in section 15(6) of that Act;

(b) the expression " the principal Act " means the [1966 c. 32.] Selective Employment Payments Act 1966.

(7) If any enactment of the Parliament of Northern Ireland makes provision with respect to Northern Ireland which appears to the Treasury to correspond to the provision made with respect to development areas by this section, there shall from time to time be paid out of the Consolidated Fund of the United Kingdom into the Exchequer of Northern Ireland such sums towards the expenditure incurred in making payments under that enactment as the Treasury, after consultation with the Ministry of Finance for Northern Ireland, may see fit to direct.

PART V Stamp Duties

27 Conveyances and transfers on sale: reduction of duty, and amendment of provisions for exemption.

(1) As respects instruments executed on or after 1st August 1967, section 55(1) of, and Part I of Schedule 11 to, the [1963 c. 25.] Finance Act 1963 (under which duty is not chargeable on conveyances or transfers certified at £4,500, and is chargeable at a special rate on those certified at £6,000) shall have effect with the substitution of " £5,500 " for " £4,500 " and " £7,000 " for " £6,000 ", wherever occurring, and " £5,500 " shall also be substituted for " £4,500 " in section 34(8) of the [1958 c. 56.] Finance Act 1958 (which makes supplemental provision as to receipts).

(2) Section 42 of the [1930 c. 28.] Finance Act 1930 (which exempts from duty conveyances and transfers complying with subsection (2) of that section, that is to say, between companies with limited liability, where one owns ninety per cent. of the issued share capital of the other or a third owns ninety per cent. of the issued share capital of each) shall be amended as respects instruments executed on or after the said 1st August by substituting for the said subsection (2) the following subsections—

“(2) This section applies to any instrument as respects which it is shown to the satisfaction of the Commissioners that the effect thereof is to convey or transfer a beneficial interest in property from one body corporate to another, and that the bodies in question are associated, that is to say, one is beneficial owner of not less than ninety per cent. of the issued share capital of the other, or a third such body is beneficial owner of not less than ninety per cent. of the issued share capital of each.

(3) The ownership referred to in subsection (2) above is ownership either directly or through another body corporate or other bodies corporate, or partly directly and partly through another body corporate or other bodies corporate, and Part I of Schedule 4 to the [1938 c. 46.] Finance Act 1938 (determination of amount of capital held through other bodies corporate) shall apply for the purposes of this section with the substitution of references to issued share capital for references to ordinary share capital.”

(3) The said section 42 shall not apply to any instrument executed on or after the said 1st August unless it is also shown to the satisfaction of the Commissioners that the instrument was not executed in pursuance of or in connection with an arrangement whereunder—

(a) the consideration, or any part of the consideration, for the conveyance or transfer was to be provided or received, directly or indirectly, by a person other than a body corporate which at the time of the execution of the instrument was associated within the meaning of the said section 42 with either the transferor or the transferee (meaning, respectively, the body from whom and the body to whom the beneficial interest was conveyed or transferred), or

(b) the said interest was previously conveyed or transferred, directly or indirectly, by such a person, or

(c) the transferor and the transferee were to cease to be associated within the meaning of the said section 42 by reason of a change in the percentage of the issued share capital of the transferee in the beneficial ownership (within the meaning of that section) of the transferor or a third body corporate ;

and, without prejudice to the generality of paragraph (a) above, an arrangement shall be treated as within that paragraph if it is one whereunder the transferor or the transferee, or a body corporate associated with either as there mentioned, was to be enabled to provide any of the consideration, or was to part with any of it, by or in consequence of the carrying out of a transaction or transactions involving, or any of them involving, a payment or other disposition by a person other than a body corporate so associated.

This subsection shall, as respects instruments executed on or after the said 1st August, have effect in substitution for section 50 of the Finance Act 1938.

28 Loan capital: increase of duty, and amendments as to exemptions and reliefs.

(1) The duty on statements of loan capital imposed by section 8 of the [1899 c. 9.] Finance Act 1899 shall, as respects capital issued on or after 1st August 1967, be charged at the rate of ten shillings (instead of two shillings and sixpence) per hundred pounds or part thereof.

(2) To the extent that duty under that section is shown to the satisfaction of the Commissioners to have been paid as respects any capital so issued, no trust deed or other instrument securing the capital shall be chargeable with duty under the heading " Marketable Security ", or that beginning " Mortgage, Bond, Debenture, Covenant ", in Schedule 1 to the [1891 c. 39.] Stamp Act 1891; and the Commissioners shall, upon application, denote on any such instrument the payment of the duty on the

This subsection shall, as respects capital so issued, have effect in substitution for subsection (3) of the said section 8 (which exempts a statement if duty has been paid on the trust deed or other instrument); and, in consequence of that subsection ceasing to have effect, the definition of " loan capital " in subsection (5) of the said section 8 shall be amended by inserting after the words " or in any other form " the words " and whether the loan thereof is secured by a mortgage, marketable security or other instrument, or is unsecured ".

(3) Section 29 of the [1934 c. 32.] Finance Act 1934 (which provides that, for the purposes of the said section 8, " loan capital " does not include capital which cannot be dealt in on a stock exchange in the United Kingdom) shall not apply to loan capital issued on or after the said 1st August by a company unless it is to be repaid within five years of the date of issue, or is repayable on demand or after notice not exceeding twelve months by the person for the time being entitled to repayment; and where any loan capital has been issued without payment of duty under the said section 8 by reason of the terms as to its repayment, and those terms are varied in such a manner that it would have been chargeable with duty under that section if the new terms had been the terms of issue—

(a) the said section 8 shall apply thereto as if it were an amount of loan capital issued by the company at the time when the variation took effect, but

(b) if duty under the heading " Marketable Security ", or that beginning " Mortgage, Bond, Debenture, Covenant ", in Schedule 1 to the Stamp Act 1891 has been paid on one or more trust deeds or other instruments securing the capital or any part thereof, or securing it together with other loan capital, the duty chargeable by virtue of paragraph (a) above shall be reduced by an amount equal to the excess of the duty paid on those instruments over that which would have been so payable if they had not secured it or, as the case may be, that part of it.

(4) For the purposes of the last preceding subsection, loan capital shall not be treated as falling to be repaid within five years of its date of issue if it is issued pursuant to an agreement under or by virtue of which the borrower is or may be entitled to receive another loan for a period which will or may expire more than five years after that date.

(5) Section 10(1) of the [1907 c. 13.] Finance Act 1907 (relief from duty where loan capital is applied in the conversion or consolidation of existing loan capital) shall have effect in relation to duty paid at the increased rate provided for by subsection (1) above as if it provided for repayment at the rate of nine shillings and sixpence (instead of two shillings) per hundred pounds; and where loan capital is issued on or after the said 1st August—

(a) in connection with such a scheme for reconstruction or amalgamation as is referred to in section 55 of the [1927 c. 10.] Finance Act 1927 (relief from capital and transfer duty), and in exchange for holdings of loan capital of the existing company referred to in that section, by a company which satisfies the Commissioners that the conditions specified in subsection (1) of that section exist in connection with the scheme, or

(b) by a body corporate not having a share capital, in exchange for holdings of loan capital of any undertaking which it acquires,

the capital so issued shall, to an amount not exceeding that of the holdings for which it is exchanged, be treated for the purposes of the said section 10(1) as having been applied in the conversion of existing loan capital, but so that where, in a case falling within paragraph (a) above, subsection (6) of the said section 55 operates to withdraw an exemption from the company, or would have so operated had any exemption been granted under that section, an amount equal to any repayment made to the company by virtue of this subsection shall be recoverable from the company as a debt due to the Crown, together with interest thereon at the rate of five per cent per annum from the date of the repayment.

(6) Subsection (1) above shall apply to loan capital issued on or after the said 1st August notwithstanding that a statement relating to it (whether or not with other loan capital) was delivered pursuant to the said section 8 before that day, and the additional duty chargeable by virtue of that subsection shall in such a case be payable on the day on which the capital in question is issued; and where duty under the heading " Marketable Security ", or that beginning " Mortgage, Bond, Debenture, Covenant ", in Schedule 1 to the [1891 c. 39.] Stamp Act 1891 has been paid on one or more trust deeds or other instruments executed before the said 1st August and securing loan capital any part of which is issued on or after that day, the duty chargeable under the said section 8 as respects that part by virtue of subsections (1) and (2) above shall be payable on the day on which it is issued, but shall be reduced by an amount equal to the excess of the duty paid on those instruments over that which would have been so payable if they had not secured that part.

29 Local authorities: exemption of loan capital and securities, and of transfers of their stock.

(1) Section 8 of the [1899 c. 9.] Finance Act 1899 (duty on loan capital of local authorities and other bodies) shall not apply to capital issued by a local authority on or after 1st August 1967.

(2) Stamp duty shall not be chargeable—

(a) in respect of any instrument executed or issued on or after the said 1st August and securing money lent to a local authority, or

(b) in respect of the transfer on or after that date of any stock issued by, or other security for money lent to, a local authority.

(3) In subsections (1) and (2) above " local authority " has the meaning given by section 66(2) of the [1965 c. 25.] Finance Act 1965

(4) In consequence of subsection (1) above, section 8 of the said Act of 1899 shall be amended as respects loan capital issued on or after the said 1st August by omitting the words " local authority " in each place where they occur, and the definition of that expression in subsection (5) of that section; and the reference in subsection (1) of that section to any corporation, company or body of persons formed or established in the United Kingdom shall be construed as from that date as a reference to any corporation, company or body of persons formed or established in Great Britain other than a local authority within the meaning of section 66 of the said Act of 1965.

(5) In consequence of subsection (2) above—

(a) section 115 of the [1891 c. 39.] Stamp Act 1891 (composition agreements by local authorities and others with respect to transfer duty) shall cease as from the said 1st August to apply to any local authority to which that subsection applies, and

(b) section 66 of the [1963 c. 25.] Finance Act 1963 (composition of stamp duty on issue of local authorities' securities) shall cease to have effect as from that date,

but this subsection shall not affect the operation of the said section 115 in relation to accounts falling due thereunder before that date, or that of the said section 66 in relation to instruments issued before that date or accounts relating to instruments so issued.

30 Exemption for bearer instruments relating to stock in foreign currencies.

(1) Subject to subsection (2) below, no duty shall be chargeable under the heading " Bearer Instrument " in Schedule 1 to the Stamp Act 1891 On the issue on or after 1st August 1967 of any instrument which relates to stock expressed in the currency of a territory outside the scheduled territories, or on the transfer on or after that date of the stock constituted by, or transferable by means of, any such instrument.

(2) Where the stock to which any instrument relates consists of a loan for the repayment of which there is an option between one or more currencies within subsection (1) above and one or more other currencies, that subsection shall apply to the instrument if the option is exercisable only by the holder of the stock, and shall not apply to it in any other case.

(3) Where the capital stock of any company or body of persons is not expressed in terms of any currency, it shall be treated for the purposes of subsection (1) above as expressed in the currency of the territory under the law of which the company or body is formed or established; and a unit under a unit trust scheme, or a share in a foreign mutual fund, shall be treated for the purposes of this section as capital stock of a company or body formed or established in the territory by the law of which the scheme or fund is governed.

(4) Where there is a change in the territories comprised in the scheduled territories, any instrument which was exempt from duty on issue by virtue of subsection (1) above, but would not have been so exempt if it had been issued immediately after the change, shall be chargeable with duty under the heading mentioned in that subsection on any transfer in Great Britain of the stock constituted by, or transferable by means of, the instrument, and sections 60 and 61 of the [1963 c. 25.] Finance Act 1963 shall apply accordingly.

(5) In this section—

• " foreign mutual fund " means a fund administered under arrangements governed by the law of a territory outside the United Kingdom whereby subscribers to the fund are entitled to participate in, or receive payments by reference to, profits or income arising to the fund from the acquisition, holding, management or disposal of investments, and " share ", in relation to a foreign mutual fund, means the right of a subscriber, or of another in his right, to participate in, or receive payments by reference to, profits or income so arising;

• " the scheduled territories " means the territories specified in Schedule 1 to the [1947 c. 14.] Exchange Control Act 1947 as for the time being in force ;

• " stock ", except in the expression " capital stock ", shall be construed in accordance with section 59(4) of the Finance Act 1963 ; and

• " unit trust scheme ", and " unit " in relation to a unit trust scheme, have the meanings given to them by section 57 of the [1946 c. 54.] Finance Act 1946.

31 Stamping of foreign bills of exchange.

(1) The Commissioners may enter into an agreement with any banker whereby—

(a) the banker pays a sum to them on account of the stamp duty chargeable on bills of exchange drawn or made outside the United Kingdom which are presented to him for payment, and

(b) in substitution for the requirements of the [1891 c. 39.] Stamp Act 1891 with respect to the fixing and cancelling of adhesive stamps, but subject to—

(i) compliance with such terms and conditions as the Commissioners may think proper to cause to be contained in the agreement, and

(ii) the aggregate amount of the duty chargeable on instruments marked in accordance with the agreement not exceeding the sum so paid on account,

any such instrument may be marked by or on behalf of the banker with such indication of the payment of stamp duty as the Commissioners may require;

and any instrument marked in accordance with such an agreement shall be treated as duly stamped for all purposes.

(2) Where a banker has paid a sum on account under any such agreement, the Commissioners may, on a claim made not later than two years after it was paid, repay so much of that sum as they are satisfied can no longer be required for payment of duty on bills presented to him for payment as mentioned in subsection (1) above.

(3) Except in so far as the context otherwise requires, any reference in sections 9 and 10 of the [1891 c. 38.] Stamp Duties Management Act 1891 (which relate to allowances for spoiled stamps) to a stamp shall include a reference to any such indication of the payment of stamp duty as is referred to in subsection (1)(b) above.

PART VI Miscellaneous

32 Capital gains.

Schedule 13 to this Act (amendments of the enactments relating to chargeable gains and tax on short-term capital gains) shall have effect.

33 Chargeable gains: exclusion of development value of land in Great Britain.

(1) Subject to subsection (3) below, in computing for the purposes of Part III of the [1965 c. 25.] Finance Act 1965 the amount of any gain accruing to a person on a disposal of land on or after 6th April 1967 it shall be assumed—

(a) that his acquisition of the land was for a consideration of an amount equal to the current use value of the land at the time when he acquired it, and

(b) that his disposal of the land was for a consideration of an amount equal to the current use value of the land at the time of the disposal:

Provided that this subsection shall not apply to a disposal if immediately before the time of the disposal the market value of the land, including in the case of a part disposal, the land which remains undisposed of, does not exceed the current use value of that land.

(2) Schedule 14 to this Act shall have effect for interpreting and supplementing this section, which is there referred to as the principal section.

(3) If the person making a disposal so elects, Part III of the [1965 c. 25.] Finance Act 1965 shall apply in relation to that disposal as if the preceding subsections of this section, and the said Schedule, had not been enacted, and had not affected any prior disposal or other transaction or the apportionment of expenditure on any prior disposal.

An election under this subsection shall be made by notice in writing to the inspector given within two years from the end of the year of assessment in which the disposal is made or such further time as the Board may by notice in writing allow, and " year of assessment " here means, for corporation tax as well as for capital gains tax, a year beginning on 6th April.

(4) It is hereby declared that a payment of betterment levy is not a sum allowable as a deduction in the computation under Part III of the Finance Act 1965 of a gain accruing on a disposal of land or of any other asset.

(5) If in computing a gain accruing on a disposal of land to which subsection (1) above applies, or would apply but for an election under this section, the expenditure allowable as a deduction would otherwise include any expenditure incurred before 6th April 1965, it shall be assumed in relation to the disposal that the land was sold by the person making the disposal, and immediately re-acquired by him, on 6th April 1965 and that the gain accruing on any previous part disposal was computed on the same footing.

(6) Where subsection (1) above is displaced by an election under this section, subsection (5) above shall have effect in substitution for sub-paragraphs (1), (2) and (3) of paragraph 23 of Schedule 6 to the Finance Act 1965 (assumed sale and re-acquisition at market value), but subject to sub-paragraph (4) of that paragraph, construing references to sub-paragraph (2) of that paragraph as references to subsection (5) above, and the sale and re-acquisition under subsection (5) above shall be deemed to be at market value.

(7) For the purposes of subsection (1) above a disposal shall be regarded as made on or after 6th April 1967 if the conveyance or other instrument giving effect to the disposal is executed on or after that date, and subsection (1) above shall not apply to a conveyance which is a disposition within paragraph 1 of Schedule 9 to the [1967 c. 1.] Land Commission Act 1967 (which exempts from betterment levy a purchase made by an authority possessing compulsory purchase powers where the notice to treat was before the first appointed day).

(8) All such adjustments shall be made, whether by way of discharge or repayment of tax, or the making of assessments or otherwise, as are required to give effect to the provisions of this section and of the said Schedule to this Act.

(9) This section and the said Schedule to this Act shall not apply to land outside Great Britain.

34 Provisions consequential on introduction of betterment levy (including repeal of mineral rights duty).

(1) Schedule 15 to this Act (allowance in respect of betterment levy for purposes of charge to tax under Case VIII or Case VI of Schedule D, and relief in respect of betterment levy from estate duty on gifts inter vivos, etc.) shall have effect.

(2) The mineral rights duty imposed by section 20 of the [1910 c. 8.] Finance (1909-10) Act 1910 shall not be charged for the financial year beginning on 1st April 1967 or for any subsequent financial year.

35 Life policies carrying rights not in money.

(1) Where any investments or other assets are, in accordance with a policy issued in the course of life assurance business carried on by an assurance company, transferred to the policy holder, the policy holder's acquisition of the assets, and the disposal of them to him, shall be deemed to be for a consideration equal to the market value of the assets—

(a) for the purposes of Part III of the [1965 c. 25.] Finance Act 1965 (chargeable gains), and

(b) for the purposes of computing income in accordance with Case I or Case VI of Schedule D, and

(c) for the purposes of Part II of the [1962 c. 44.] Finance Act 1962 (tax on short-term capital gains).

(2) In section 28(3) of the Finance Act 1965 (payment of sum assured by policy purchased from original holder to be treated as disposal of the policy) the reference to payment of the sum assured shall include a reference to the transfer of investments or other assets to the owner of the policy in accordance with the policy.

(3) This section has effect as respects investments or other assets transferred on or after 6th April 1967.

(4) In this section " assurance company " and " life assurance business " have the meanings given by section 437 of the [1952 c. 10.] Income Tax Act 1952.

36 Basis for determining unilateral relief from double taxation.

(1) Paragraph 1 of Part I of Schedule 17 to the Income Tax Act 1952 (under which, as extended by sections 39 and 64 of the [1965 c. 25.] Finance Act 1965, unilateral relief from double taxation is to be given by allowing credit for tax paid abroad in respect of any income or gains against the United Kingdom tax chargeable in respect of that income or those gains) shall be amended by substituting—

(a) for the words " in respect of ", where first occurring, the words " and computed by reference to ", and

(b) for the words " chargeable in respect of ", the words " computed by reference to ";

and the words " and computed by reference to " shall also be substituted for the words " in respect of " in both places where they occur in paragraph 1(b) of Part II of that Schedule (which contains supplemental provisions).

(2) The above amendments shall have effect as respects income and gains arising or accruing on or after 6th April 1967.

37 Grants for giving up agricultural land.

For the purposes of the capital gains tax, a sum payable to an individual by virtue of a scheme under section 27 of the [1967 c. 22.] Agriculture Act 1967 (grants for relinquishing occupation of uncommercial agricultural units) shall not be treated as part of the consideration obtained by him for, or otherwise as accruing to him on, the disposal of any asset; and a sum so payable by way of annuity shall be treated for all the purposes of the Income Tax Acts as earned income unless the annuity was granted to the individual by reason of his having relinquished occupation before attaining the age of fifty-five.

38 Central African Pension Fund 39. Overseas Service Pensions Fund.

(1) A pension paid out of the Central African Pension Fund shall not be liable to charge to income tax if it is the income of a person who, on a claim to the Board for relief under this subsection, satisfies the Board that he is not resident in the United Kingdom.

Section 9 of the [1964 c. 37.] Income Tax Management Act 1964 shall apply to any claim under this subsection.

(2) Income derived from investments or deposits of that Fund shall not be charged to income tax, and any income tax deducted from any such income shall be repaid by the Board to the persons entitled to receive the income.

(3) Sections 36(2) of the Finance Act 1965 and 15(3) of the [1962 c. 44.] Finance Act 1962 (exemptions from the capital gains tax, and the tax on gains under Case VII of Schedule D, for funds whose income is exempt under certain enactments) shall each have effect as if subsection (2) above were included among the enactments there referred to.

(4) For the purposes of the enactments relating to estate duty, a pension paid out of the said Fund shall be treated as if it had been paid by the government of a territory outside the United Kingdom.

(5) In this section " the Central African Pension Fund " means the fund established under that name by section 24 of the [S.I. 1963/2085.] Federation of Rhodesia and Nyasaland (Dissolution) Order in Council 1963, and " pension " includes a gratuity or any sum payable on or in respect of death, and a return of contributions with or without interest thereon or any other addition thereto.

(6) This section shall have effect for the purposes of income tax as respects the year 1963-64 and all subsequent years of assessment, for the purposes of the capital gains tax as respects the year 1965-66 and all subsequent years, and for the purposes of estate duty in relation to deaths occurring at any time after the establishment of the Fund

39 Overseas Service Pensions Fund.

(1) A pension paid out of the Overseas Service Pensions Fund shall not be liable to charge to income tax if it is the income of a person who, on a claim to the Board for relief under this subsection, satisfies the Board that he is not resident in the United Kingdom.

Section 9 of the [1964 c. 37.] Income Tax Management Act 1964 shall apply to any claim under this subsection.

(2) In respect of income derived from investments or deposits of that Fund the Board shall, on a claim being made to them for the purpose, give by way of repayment such relief from income tax as is necessary to secure that the income is exempt to the like extent (if any) as if it were income of a person not domiciled, ordinarily resident or resident in the United Kingdom.

This subsection shall have effect as respects the year 1966-67 as well as subsequent years of assessment.

(3) Sections 36(2) of the [1965 c. 25.] Finance Act 1965 and 15(3) of the [1962 c. 44.] Finance Act 1962 (exemptions from the capital gains tax, and the tax on gains under Case VII of Schedule D, for funds whose income is exempt under certain enactments) shall each have effect as if subsection (2) above were included among the enactments there referred to.

(4) In this section " the Overseas Service Pensions Fund " means the Fund established under that name pursuant to section 7(1) of the [1966 c. 21.] Overseas Aid Act 1966, and " pension " includes a gratuity or any sum payable on or in respect of death or ill-health, and a return of contributions with or without interest thereon or any other addition thereto.

40 Interest on unpaid tax.

(1) The rate of interest prescribed by—

(a) section 495(1) of the [1952 c. 10.] Income Tax Act 1952 (interest on overdue tax),

(b) section 58(1) of the [1960 c. 44.] Finance Act 1960 (interest on tax recovered to make good loss due to taxpayer's default),

(c) section 8 of the [1947 c. 9 (11 & 12 Geo. 6.).] Finance (No. 2) Act 1947 (interest on unpaid profits tax and excess profits tax), and

(d) paragraph 10(1) of Schedule 7 to the Finance Act 1960 (interest on profits tax recovered to make good loss due to taxpayer's default),

shall, subject to the next following subsection, be 4 per cent. per annum (instead of 3 per cent. per annum).

(2) The Treasury may, by order in a statutory instrument, subject to annulment in pursuance of a resolution of the Commons House of Parliament, from time to time increase or decrease the rate of interest prescribed by subsection (1) above, either for the purposes of all the enactments mentioned in that subsection, or so as to prescribe different rates for different purposes.

(3) Subsection (1) above shall apply to interest for any period beginning on or after 19th April 1967 whether or not interest runs from before that date; and any variation of the rate of interest prescribed under subsection (2) above shall apply to interest for periods beginning on or after the date when the order is expressed to come into force, whether or not interest runs from before that date.

(4) Interest charged under the said section 495(1) or the said section 58(1) shall be treated for the purposes—

(a) of sections 74, 76, 78 and 79 of the Income Tax Act 1952 and of section 8 of the [1964 c. 37.] Income Tax Management Act 1964 (recovery of tax by distress or in court proceedings), and

(b) of section 35(2)(g)(i) of the [1947 c. 44.] Crown Proceedings Act 1947 (rules of court to impose restrictions on set-off and counterclaim where the proceedings, or set-off or counterclaim, relate to taxes) and of any rules of court (including county court rules) for England and Wales or Northern Ireland, made before or after the passing of this Act, which impose such a restriction, and

(c) of section 35(2)(b) of the said Act of 1947 as set out in section 50 of that Act (which imposes corresponding restrictions in Scotland),

as if it were tax charged and due and payable under the assessment to which it relates.

(5) In section 495(3)(b) of the [1952 c. 10.] Income Tax Act 1952 (exemption for interest not exceeding one pound) five pounds shall be substituted for one pound as respects tax becoming due and payable on or after 19th April 1967.

(6) Without prejudice to the general interpretative provisions of this Act, this section applies to the enactments mentioned in subsection (1) above as extended by any other enactment, and in particular—

(a) it applies to sections 495(1) of the Income Tax Act 1952 and section 58(1) of the [1960 c. 44.] Finance Act 1960 as extended to capital gains tax and corporation tax, and

(b) it applies to section 8 of the [1947 c. 9 (11 & 12 Geo. 6.).] Finance (No. 2) Act 1947 as extended to the excess profits levy.

41 Provisional collection of taxes.

(1) The [1913 c. 3.] Provisional Collection of Taxes Act 1913, section 265 of the [1952 c. 44.] Customs and Excise Act 1952 (security for new duties) and section 49(6) of the [1965 c. 25.] Finance Act 1965 (assessment of corporation tax before passing of annual Act) shall apply to resolutions of the House of Commons and not to resolutions of the Committee of Ways and Means, and accordingly shall have effect subject to the repeals in Part IX of Schedule 16 to this Act.

(2) A resolution having statutory effect under section 1 of the Provisional Collection of Taxes Act 1913 shall cease to have statutory effect unless within the next twenty-five days on which the House sits after the day on which the resolution is passed—

(a) a Bill varying or renewing the tax is read a second time by the House of Commons, or

(b) a Bill is amended by the House of Commons so as to include provision for the variation or renewal of the tax.

Proviso (a) to section 1(1) of the said Act of 1913 (which required a Bill varying or renewing the tax to have been read a second time within twenty sitting days after the resolution of the Committee of Ways and Means is agreed to by the House) shall cease to have effect, and the said section 1(1) shall be construed as one with this subsection.

(3) The period for which a resolution shall have statutory force under section 1 of the Provisional Collection of Taxes Act 1913 shall, if the resolution is passed in March or April in any year, expire with 5th August in the same calendar year, and section 1(2) of the said Act shall have effect subject to this subsection.

(4) Section 1 of the [1913 c. 3.] Provisional Collection of Taxes Act 1913 shall apply to a resolution of the House of Commons providing for the repeal or abolition of an existing tax (within the meaning of that Act) as it applies to such a resolution providing for the variation of any existing tax; and in relation to a resolution to which this subsection applies, the references in subsection (2) above and in proviso (b) to the said section 1(1) to the variation of the tax by a Bill or an Act shall be construed as references to its repeal or abolition by, as the case may require, a Bill or an Act.

(5) Section 49(6) of the [1965 c. 25.] Finance Act 1965 shall apply to a resolution passed in March or April in any year as if for the period of four months from the passing of the resolution referred to in that subsection (as a period within which an assessment may be made by virtue of the resolution) there were substituted a reference to a period beginning with the passing of the resolution and ending with 5th August in the same calendar year.

(6) In subsection (1) of section 265 of the [1952 c. 44.] Customs and Excise Act 1952 (which restricts that section to new duties of customs or excise in respect of any goods) the words " in respect of any goods " shall cease to have effect.

(7) This and the next following section shall come into force on such date, not earlier than 1st September 1967, as may be appointed by the Treasury by order in a statutory instrument.

(8) This and the next following section shall not affect the Provisional Collection of Taxes Act 1913 as that Act applies to the House of Commons of the Parliament of Northern Ireland.

42 Collection of taxes before passing of ways and means resolutions.

(1) This section shall apply if the House of Commons resolves that provisional statutory effect shall be given to one or more motions to be moved by the Chancellor of the Exchequer, or some other Minister, and which, if agreed to by the House, would be resolutions—

(a) to which statutory effect could be given under section 1 of the Provisional Collection of Taxes Act 1913, or

(b) to which section 265 of the Customs and Excise Act 1952 (new duties of customs or excise) could be applied, or

(c) in accordance with which assessments to corporation tax could be made under section 49(6) of the Finance Act 1965.

(2) Subject to subsection (3) below, on the passing of the resolution under subsection (1) above the Provisional Collection of Taxes Acts shall apply as if each motion to which the resolution applies had then been agreed to by a resolution of the House.

(3) Subsection (2) above shall cease to apply to a motion if that motion, or a motion containing the same proposals with modifications, is not agreed to by a resolution of the House (in this section referred to as " a confirmatory resolution ") within the next ten days on which the House sits after the resolution under subsection (1) above is passed, and, if it ceases to apply, all such adjustments, whether by way of discharge or repayment of tax, or discharge of security, or otherwise, shall be made as may be necessary to restore the position to what it would have been if subsection (2) above had never applied to that motion, and to make good any deductions which have become unauthorised deductions.

(4) The Provisional Collection of Taxes Acts shall have effect as if—

(a) any confirmatory resolution passed within the said period of ten sitting days had been passed when the resolution under subsection (1) was passed, and

(b) everything done in pursuance of subsection (2) above by reference to the motion to which the confirmatory resolution relates had been done by reference to the confirmatory resolution,

but any necessary adjustments shall be made, whether by way of discharge or repayment of tax, or modification of the terms of any security, or further assessment, or otherwise, where the proposals in the confirmatory resolution are not the same as those in the original motion to which that resolution relates.

(5) In this section " the Provisional Collection of Taxes Acts " means:—

(a) the [1913 c. 3.] Provisional Collection of Taxes Act 1913 (with subsections (2), (3) and (4) of the last preceding section),

(b) section 265 of the [1952 c. 44.] Customs and Excise Act 1952,

(c) section 49(6) of the [1965 c. 25.] Finance Act 1965, and

(d) section 492 of the [1952 c. 10.] Income Tax Act 1952 (overdeductions from preference dividends before passing of annual Act).

43 Quorum of Special Commissioners in tax cases.

(1) Anything to be done under any Act (including, except where otherwise expressly provided, any Act passed after this Act) by, to or before the Special Commissioners appointed for the purposes of income tax may be done by, to or before a single Special Commissioner, or any two or more Special Commissioners ; and this section applies not only for income tax purposes but also for the purposes of any other affairs under the care and management of the Board.

(2) Subject to the following provisions of this section proceedings shall not by virtue of this section be brought before a single Special Commissioner unless—

(a) the party, or the parties, to the proceedings, other than the Board or any officer of the Board, have given their consent, and

(b) a Special Commissioner so directs on being satisfied that the direction will avoid undue delay in the hearing of those or any other proceedings.

(3) Proceedings brought before two or more Special Commissioners may be continued and determined by any one or more of them if the parties to the proceedings have given their consent and if the continuing Special Commissioner or Commissioners, after such consultation as is practicable with any Special Commissioner retiring from the proceedings, is or are satisfied that to do so will avoid undue delay in the hearing of those or any other proceedings.

(4) If the notice to the appellant of the setting down for hearing of an appeal to the Special Commissioners states that it is intended that the appeal should be heard by a single Special Commissioner and draws attention to the provisions of this section, the appeal may be so heard without compliance with the requirements of subsection (2) above, but if, in the course of the hearing of the appeal, or at any earlier time, the Special Commissioner to whom the appeal is assigned is satisfied that the appellant has arguments to present or evidence to adduce on the merits of the appeal the case shall thereafter be treated as one which cannot be brought before a single Special Commissioner unless the requirements of subsection (2) above are fulfilled.

(5) Nothing in subsection (1) of this section shall authorise a single Special Commissioner to entertain proceedings under section 56 of the [1960 c. 44.] Finance Act 1960 or paragraph 9 of Schedule 7 to that Act (procedure for recovery of fines and penalties), and subsection (3) of this section shall not apply to proceedings under those enactments.

(6) No determination of a Special Commissioner shall be questioned, whether by a case stated or otherwise, on the ground that this section did not authorise the Special Commissioner to make the determination, except by a party by whom or on whose behalf an objection to the jurisdiction was made to the Special Commissioner before or in the course of the proceedings leading to the determination.

44 Loans to Government of Northern Ireland.

In the proviso to section 2(1) of the [1950 c. 21.] Miscellaneous Financial Provisions Act 1950 (which, as amended by section 95 of the [1965 c. 25.] Finance Act 1965, restricts the total principal amounts outstanding in respect of advances to the Exchequer of Northern Ireland under the said section 2 to seventy million pounds) for the words " seventy million pounds " there shall be substituted the words " one hundred and twenty million pounds ".

45 Citation, interpretation, construction, extent and repeals.

(1) This Act may be cited as the Finance Act 1967.

(2) In this Act, except where the context otherwise requires, " the Board " means the Commissioners of Inland Revenue.

(3) In this Act—

(a) Part I (except sections 8 to 12 and Schedules 7 and 8) shall be construed as one with the [1952 c. 44.] Customs and Excise Act 1952, and in that Part " the Act of 1952 " is that Act,

(b) sections 8 and 9 shall be construed as one with the [1963 c. 9.] Purchase Tax Act 1963,

(c) sections 11 and 12 shall be construed as one with the [1962 c. 13.] Vehicles (Excise) Act 1962,

(d) Part II shall be construed as one with the Income Tax Acts,

(e) Part III shall be construed as one with the Corporation Tax Acts so far as it relates to those Acts, with the Income Tax Acts so far as it otherwise relates to income tax, and with the enactments relating to the profits tax so far as it relates to that tax,

(f) without prejudice to the application to Northern Ireland of section 26(7) and of paragraph 10 of Schedule 12, Part IV shall be construed as one with the [1966 c. 32.] Selective Employment Payments Act 1966,

(g) Part V shall be construed as one with the [1891 c. 39.] Stamp Act 1891, and

(h) Part VI shall be construed as one with the Corporation Tax Acts so far as it relates to those Acts, with the Income Tax Acts so far as it otherwise relates to income tax, and with Part III of the Finance Act 1965 so far as it relates to chargeable gains.

(4) The following provisions of this Act, namely, section 5(1) so far as it relates to the [1964 c. 26.] Licensing Act 1964 and Schedule 7, may be cited together with that Act (and with any other Act passed during the same Session as this Act which provides for that other Act to be cited together with the said Act of 1964) as the Licensing Acts 1964 to 1967.

(5) The following provisions of this Act, namely, section 5(1) so far as it relates to the Licensing (Scotland) Acts 1959 and 1962 and Schedule 8, shall be included in the enactments which may be cited together as the Licensing (Scotland) Acts 1959 to 1967.

(6) Any reference in this Act to any other enactment shall, except so far as the context otherwise requires, be construed as a reference to that enactment as amended or applied by or under any other enactment, including this Act.

(7) Except as otherwise expressly provided, such of the provisions of this Act as relate to matters in respect of which the Parliament of Northern Ireland has power to make laws shall not extend to Northern Ireland.

(8) The enactments mentioned in Schedule 16 to this Act are hereby repealed to the extent mentioned in the third column of that Schedule, but subject to any provision in relation thereto made at the end of any Part of that Schedule.