Finance Act 1971
1971 c. 68
An Act to grant certain duties, to alter other duties, and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with Finance.
The text of ss. 6(1), 7, 69(1)(4) was taken from SIF group 107:2 (Road Traffic:Vehicle Excise Duty), ss. 13–60, 69, Schs. 2–12, 14 from SIF group 63:1 (Income, Corporation and Capital Gains Taxes:Income and Corporation Taxes), ss. 66–69(1)(4)(5), Sch. 13 from SIF group 99:7 (Public Finance and Economic Control:Miscellaneous), ss. 64, 69(1)(4)-(6) from SIF group 114 (Stamp Duty); provisions omitted from SIF have been dealt with as referred to in other commentary.
General amendments to Tax Acts, Income Tax Acts, and/or Corporation Tax Acts made by legislation after 1.2.1991 are noted against Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1) but not against each Act
Words of enactment omitted under authority of Statute Law Revision Act 1948 (c. 62), s. 3
Part I Customs and Excise
1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F1
2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F2
3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F3
4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F4
6 Agricultural machines—vehicles excise duty and customs and excise duty.
1
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F5
C22
As from the said 1st September, in Schedule 1 to the M1Hydrocarbon Oil (Customs & Excise) Act 1971 (vehicles in which heavy oil may be used without repayment of rebate)—
a
the reference in paragraph 2(b) to the said Schedule 3 shall be construed as a reference to that Schedule as amended by subsection (1) above, and
b
the reference to an agricultural machine in paragraph 3(b) shall not include any vehicle which does not satisfy the conditions specified in paragraphs (a) and (b) of section 6(1) of the M2Finance Act (Northern Ireland) 1971 (which makes provision corresponding to that made by subsection (1) above).
F67. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F7
11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F8
12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F9
PART II INCOME TAX AND CORPORATION TAX
CHAPTER I GENERAL
13. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F10
21 Occupational pension schemes
1
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F11
6
F12Part II of Schedule 3 to this Act shall have effect
C322. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F13
CHAPTER II SUB-CONTRACTORS IN CONSTRUCTION INDUSTRY
29 (Deductions on account of income tax from payments to certain sub-contractors in construction industry.)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F14
30 (Exceptions from section 29.)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F15
31 (Interpretation of Chapter II.)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F16
CHAPTER III METHOD OF CHARGING INCOME TAX FOR 1973-74 AND SUBSEQUENT YEARS
32. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F17
37 Consequential amendments and repeals.
1
The enactments mentioned in Schedule 6 to this Act shall have effect subject to the amendments specified therein.
2
The enactments mentioned in Part II of Schedule 14 to this Act are hereby repealed to the extent specified in the third column of that Part.
38 Commencement of Chapter III and transitional provisions.
1
The preceding provisions of this Chapter shall have effect for the year 1973-74 and subsequent years of assessment; and accordingly the amendments and repeals made by those provisions (including those mentioned in section 37 of this Act) shall not be taken to affect tax for an earlier year of assessment or the doing of anything in relation to tax for such a year.
2
The transitional provisions contained in Schedule 7 to this Act shall have effect.
39. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F18
PART III INCOME TAX AND CORPORATION TAX: CAPITAL ALLOWANCES
40. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F19
PART IV TAX ON CAPITAL GAINS AND ESTATE DUTY
F2055. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
56 (Taxation of short-term capital gains.)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F21
57 (Exemption or relief for small disposals).
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F22
58 (Disposal of options.)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F23
59 (Abolition of charge to capital gains tax on death, etc.)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F24
60 (Replacement of business assets.)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F25
61. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F26
PART V MISCELLANEOUS
63. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F27
64 Stamp Duty— abolition of duty on bonds, mortgages etc.
1
The following stamp duties are hereby abolished—
a
except as respects any instrument increasing the rent reserved by another instrument, the duties chargeable by virtue of paragraph (1) and paragraph (2) (securities for annuities other than superannuation annuities and for certain other periodic sums) of the heading in Schedule 1 to the M8Stamp Act 1891 “Bond, Covenant, or Instrument of any kind whatsoever”,
b
the duties chargeable by virtue of the heading in that Schedule “Bond of any kind whatsoever not specifically charged with any duty”, and
c
the duties chargeable by virtue of the heading in that Schedule beginning “Mortgage, Bond, Debenture, Covenant”.
2
Subject to section 4 of the said Act of 1891 (separate charges on instruments containing or relating to several distinct matters) . . . F58, any instruments which, but for subsection (1) above, would be chargeable with duty under a heading mentioned in that subsection shall not be chargeable with duty under any other heading in the said Schedule 1.
3
For the avoidance of doubt it is hereby declared that paragraph (c) of subsection (1) above does not affect the amount of any duty chargeable under the said Schedule 1 by reference to the heading mentioned in that paragraph.
4
This section has effect as from 1st August 1971.
65. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F28
66. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F29
67 Confirmation of health service agreement with Northern Ireland and U.K. contribution towards cost of certain allowances and benefits in Northern Ireland.
1
Confirmation is hereby given to the agreement between the Treasury and the Ministry of Finance for Northern Ireland set out in Schedule 13 to this Act (an agreement which, if confirmed by Acts of the Parliaments of the United Kingdom and Northern Ireland, supersedes as from 1st April 1971 an earlier agreement as amended).
2
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F30
C43
The preceding provisions of this section shall not come into operation unless and until Her Majesty by Order in Council declares that a corresponding provision has been enacted by the Parliament of Northern Ireland.
4
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F30
68 Payments to Banks of England and Ireland in respect of management of Government securities. C5
Section 16 of the M3 National Loans Act 1968 (supplemental provisions as to the national debt) shall be amended as follows—
a
in subsection (7) (under which payments to the Banks of England and Ireland in respect of management of Government securities must relate to management in financial years ending on 31st March), for the words “in the year ending 31st March 1968 or any subseequent financial year” there shall be substiuted the words “in any period”, and
b
subsection (8) (which governs the calculation of the amount of such payments and the time of payment) shall be omitted.
69 Citation, interpretation, construction, extent and repeals.
1
This Act may be cited as the Finance Act 1971.
2
In this Act “the Taxes Act” means the Income and Corporation Taxes Act F311988.
C63
In this Act—
sections 3, 8, 9, 10 and 12 shall be construed as one with the Customs and Excise Act 1952;
Parts II and III, so far as they relate to income tax, shall be construed as one with the Income Tax Acts and, so far as they relate to corporation tax, shall be construed as one with the Corporation Tax Acts;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F32.
4
Except so far as the context otherwise requires, any reference in this Act to any enactment shall be construed as a reference to that enactment as amended, and as including a reference to that enactment as applied, by or under any other enactment, including this Act.
5
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 do not extend to Northern Ireland.
6
If the Parliament of Northern Ireland passes provisions amending or replacing any enactment of that Parliament referred to in this Act the reference shall be construed as a reference to the enactment as so amended or, as the case may be, as a reference to those provisions.
7
The enactments mentioned in Schedule 14 to this Act (Part VI of which includes certain obsolete enactments) are hereby repealed to the extent mentioned in the third column of that Schedule, but subject to any provision at the end of any Part of that Schedule.
SCHEDULES
F33F33SCHEDULE 1
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F33
SCHEDULE 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F34
Sch. 2 repealed by Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), s. 844, Sch. 31
SCHEDULE 3 OCCUPATIONAL PENSION SCHEMES
PART I TRANSITIONAL
1
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F35
Schemes approved under old law Taxation of refunds of contributions and commutation payments
8
1
This paragraph has effect as respects any payment chargeable to tax for the year 1971-72 or any later year of assessment under Regulation 7, 8 or 13 of the Regulations dated November 10th 1921 made by the Board under section 32 of the Finance Act 1921 (which corresponds to section 208 of the F36the Income and Corporation Taxes Act 1970).
2
Where tax is chargeable under the said Regulation 7 (or Regulation 13 with that Regulation) then—
a
if the scheme relates to a trade, profession or vocation carried on by the employer, the payment shall be treated for the purposes of the Tax Acts as a receipt of that trade, profession or vocation receivable when the payment falls due or on the last day on which the trade, profession or vocation is carried on by the employer, whichever is the earlier;
b
if the scheme does not relate to such a trade, profession or vocation, the employer shall be charged to tax on the amount of the payment under Case VI of Schedule D.
3
Where tax is chargeable under the said Regulation 8 (or Regulation 13 with that Regulation), F37section 598(2) to (4) of the Taxes Act shall apply as they apply to tax chargeable under that paragraph.
4
If at any time the scheme becomes an approved scheme (that is to say approved for the purposes of Chapter II of Part II of the Finance Act F371970 or Chapter I of Part XIV of the Taxes Act) no tax shall be chargeable under the said Regulations on any payment made under the scheme after that time.
5
The provisions of this paragraph shall have effect in substitution for the provisions of the said Regulations as to the rate of tax and the manner of charging tax, and the said Regulations 7, 8 and 13 shall not cease to be in force by reason of the provisions of this Act repealing the said section 208 of the F37the Income and Corporation Taxes Act 1970, or of the provisions of this Act under which in certain cases the said section 208 ceases to apply to a scheme before the date of that repeal.
9
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F38
SCHEDULE 4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F39
SCHEDULE 5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F40
Sch. 5 repealed by Finance (No. 2) Act 1975 (c. 45), ss. 68(1), 75(5), Sch. 14 Part IV Note 1with effect from 6April 1977except in relation to sums payable before that day under Finance Act 1971 s. 29
SCHEDULE 6 AMENDMENTS CONSEQUENTIAL ON NEW METHODS OF CHARGING TAX
PART I
1
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F41
PART II AMENDMENT OF TAXES MANAGEMENT ACT 1970
81
The Taxes Management Act 1970 shall be amended in accordance with the following provisions of this Part of this Schedule.
82
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F42
C783
In section 22 the words “for the purpose of charging surtax” shall be omitted.
C884
In section 29—
a
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F43
b
in subsection (4) the words “at the standard rate” shall be omitted; and
c
in subsection (7) the words “at the standard rate” shall be omitted.
C985
In section 31(3)—
a
in paragraph (a) the words “assessment to surtax, or any other” shall be omitted;
b
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F44; and
c
after the paragraphs there shall be added the words “or if the appeal involves any question as to the application of section 30, Part XV or Part XVI of that Act.”.
86
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F45
C1487
In section 88(5) the following shall be substituted for paragraph (c)—
c
in the case of any income tax specified in section 4(3) of the principal Act the following 6th July
C1088
In section 91(3)—
a
paragraphs (a) and (b)(i) shall be omitted; and
b
after paragraph (b) there shall be added the following:—
or
c
affecting tax charged at a rate other than the basic rate on income from which tax has been deducted (otherwise than under section 204 of the principal Act) or is treated as having been deducted, unless it is a relief from tax so charged.
C1189
In section 93(4) for the words from the beginning to “this Act it” there shall be substituted the words “
In relation to a return required for the purposes of section 9 of this Act the reference in subsection (2) above to tax
”
C1290
In section 95(3) for the words “include surtax” to “do not” there shall be substituted the words “
do not, in relation to anything done in connection with a partnership
”
.
PART III
91
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F46
SCHEDULE 7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F47
SCHEDULE 8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F48
Sch. 8 repealed by Capital Allowances Act 1990 (c. 1, SIF 63:1), s. 164(4), Sch. 2
SCHEDULE 9 RESTORATION OF DEVELOPMENT VALUE
1
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F49
4
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F50
5
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F51
SCHEDULE 10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F52
Sch. 9 paras. 1 to 3, 5, Schs. 10, 12 repealed by Capital Gains Tax Act 1979 (c. 14, SIF 63:2), s. 158, Sch. 8for 1979-80et seq.]
SCHEDULE 11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F53
Sch. 11 repealed by Finance Act 1978 (c. 42), s. 80, Sch. 13 Part IVfor 1977-78seq.]
SCHEDULE 12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F54
Sch. 9 paras. 1 to 3, 5, Schs. 10, 12 repealed by Capital Gains Tax Act 1979 (c. 14, SIF 63:2), s. 158, Sch. 8for 1979-80et seq.]
SCHEDULE 13 Health Service Agreement between Treasury and Ministry of Finance for Northern Ireland
The Commissioners of Her Majesty’s Treasury and the Ministry of Finance for Northern Ireland, with a view to assimilating the burdens on the Consolidated Fund of the United Kingdom and the Exchequer of Northern Ireland in respect of health services, have entered into the following Agreement, which supersedes as from 1st April 1971 the M6Agreement of 11th February 1949 set out in the Schedule to the Social Services (Northern Ireland Agreement) Act 1949, as amended by the M7Agreement of 28th February 1968 set out in Schedule 19 to the Finance Act 1968.
1
1
There shall be ascertained in respect of each financial year during which this Agreement is in operation the total net cost in Great Britain and in Northern Ireland under the F55M4National Health Service Act 1977 and the M5National Health Service (Scotland) Act F561978 as they may be amended from time to time, and the corresponding enactments in Northern Ireland.
2
The net cost under paragraph (1) above shall be the actual cost as certified annually by the Commissioners of Her Majesty’s Treasury as respects the services in Great Britain and by the Ministry of Finance for Northern Ireland as respects the services in Northern Ireland.
3
The net cost under paragraph (1) above of services in Northern Ireland shall, in relation to the net cost of the corresponding services in Great Britain, be determined subject to such adjustments, if any, as may be necessary to take account, from time to time, of any differences between methods of administration in Great Britain and in Northern Ireland.
2
1
If in respect of any financial year the total net cost in Northern Ireland under article 1 of this Agreement is less than 2 per cent. of the total net cost in Great Britain and Northern Ireland, there shall be paid from the Exchequer of Northern Ireland to the Consolidated Fund of the United Kingdom a contribution equal to 90 per cent. of the amount by which the said net cost in Northern Ireland is less than the said 2 per cent.
2
If in respect of any financial year the total net cost in Northern Ireland under article 1 of this Agreement exceeds 2 per cent. of the total net cost in Great Britain and Northern Ireland, there shall be paid to the Exchequer of Northern Ireland out of the Consolidated Fund of the United Kingdom a contribution equal to 90 per cent. of the amount by which the said net cost in Northern Ireland exceeds the said 2 per cent.
3
It is hereby agreed that, subject to such differences as may from time to time exist between the methods of administration in Great Britain and in Northern Ireland of the services covered by this Agreement, the Government of Northern Ireland undertakes to keep the scale and standard of comprehensive health services in Northern Ireland in general conformity with the scale and standard of such services in Great Britain, and to ensure that the rates of remuneration of persons employed in such services in Northern Ireland correspond as nearly as may be with the rates for such services obtaining in Great Britain.
4
Payments on account of such contributions as may ultimately be found to be due under article 2 of this Agreement from the Exchequer of Northern Ireland or from the Consolidated Fund of the United Kingdom shall be made of such amounts and at such times as may be agreed between the Commissioners of Her Majesty’s Treasury and the Ministry of Finance for Northern Ireland.
5
Any question arising under this Agreement, whether as to the amount of any adjustments necessary in the determination of net costs in Great Britain and Northern Ireland for the purposes of article 1 of this Agreement, or of any contribution payable under article 2, or otherwise, shall, in default of agreement between the Commissioners of Her Majesty’s Treasury and the Ministry of Finance for Northern Ireland, be determined by the Joint Exchequer Board, whose decision shall be final.
6
This Agreement shall not come into operation until confirmed by Acts of the Parliaments of the United Kingdom and Northern Ireland respectively, but upon being so confirmed shall have effect as from 1st April 1971.
In Witness whereof Walter Clegg and Hector Monro two of the Commissioners of Her Majesty’s Treasury have hereunto set their hands and seals and the Official Seal of the Ministry of Finance for Northern Ireland has been hereunto affixed this 14th day of April 1971.
Signed Sealed and Delivered by Walter Clegg one of the Commissioners of Her Majesty’s Treasury in the presence of:— | Walter Clegg (L.S.) |
Albert George Nicholson Civil Servant, House of Commons, London S.W.1. | |
Signed Sealed and Delivered by Hector Monro one of the Commissioners of Her Majesty’s Treasury in the presence of:— | Hector Monro (L.S) |
Albert George Nicholson Civil Servant, House of Commons, London S.W.1 | |
The Official Seal of the Ministry of Finance for Northern Ireland was hereunto affixed in the presence of:— | H. V. Kirk (L.S.) |
D. C. B. Holden Civil Servant, Ministry of Finance, Stormont, Belfast. | |
C13SCHEDULE 14 ENACTMENTS REPEALED
The text of Sch. 14 is as it appears in the Taxes Acts (edited by Inland Revenue) and is incomplete.
PART I OCCUPATIONAL PENSIONS SCHEMES
Section 21.
Chapter | Short Title | Extent of Repeal |
|---|---|---|
1970 c.9 | The Taxes Management Act 1970. | In the Table in section 98(3) the entry (in each column) relating to section 224 of the Taxes Act, but not as regards any penalty incurred before this repeal takes effect. |
1970 c.10 | The Income and Corporation Taxes Act 1970. | [See 1987edition for these repeals.] |
1970 c.24 | The Finance Act 1970. | |
[The repeals of theTaxes Management Act 1970took effect on 6th April 1980.
PART II NEW METHOD OF CHARGING TAX
Words omitted and repealed byFinance (No. 2) Act 1975 (c. 45), s. 75, Sch. 14 Part III
Section 37.
Chapter | Short Title | Extent of Repeal |
|---|---|---|
1970 c.9 | The Taxes Management Act 1970. | In section 7(2), the words from “or in the case” to the end. |
In section 8, subsections (5) and (6) and in subsection (8), the words from “which are required” to “standard rate” and the words “for either or both of those purposes.” | ||
In section 12(1), the words “at the standard rate”. | ||
In section 22, the words “for the purpose of charging surtax”. | ||
In section 29, in subsections (4) and (7), the words “at the standard rate.” | ||
In section 31(3)(a), the words “assessment to surtax, or any other”. | ||
In section 33(2), the words from “including” to “surtax”. | ||
. . . F57 | ||
In section 77(1), the words “chargeable at the standard rate”. | ||
In section 91(3), paragraph (a) and in paragraph (b), sub-paragraph (i). | ||
1970 c.10 | The Income and Corporation Taxes Act 1970. | [See 1987edition for these repeals.] |
1970 c.24 | The Finance Act 1970 | |
1970 c.54 | The Income and Corporation Taxes (No.2) Act 1970. | |
These repeals have effect subject to section 38 of this Act.
PART III BETTERMENT LEVY
Section 55.
Chapter | Short Title | Extent of Repeal |
|---|---|---|
1970 c.9 | The Taxes Management Act 1970. | Section 57(2). |
1970 c.10 | The Income and Corporation Taxes Act 1970. | |
Section 269(2). | ||
1970 c.24 | The Finance Act 1970. | In section 29, in subsection (2)(b) the words from “including” to “Act”, and in subsection (3) paragraphs (b) and (c). |
In Schedule 6, Part I; and in paragraph 4(1) the words from “but without prejudice” to the end. | ||
These repeals have effect subject to section 55(2) of this Act.
PART IV CASE VII
Section 56.
Chapter | Short Title | Extent of Repeal |
|---|---|---|
1970 c.9 | The Taxes Management Act 1970. | Section 9(5). |
In section 98, in Table I, the words “section 167(4)”. | ||
1970 c.10 | The Income and Corporation Taxes Act 1970. | |
In section 270, subsections (1) and (2). | ||
In section 271, subsections (1) to (3). | ||
1970 c.24 | The Finance Act 1970. | |
These repeals have effect subject to section 56(4) of this Act.
PART VII
[See 1987edition for these provisions.]
Act partly in force at Royal Assent, partly retrospective, partly prospective, see individual sections; all provisions so far as unrepealed wholly in force at 1.2.1991