Finance Act 1981

Part I U.K. Customs and Excise

X1 1 Spirits, beer, wine, made-wine and cider. U.K.

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F1

(2) In section 36 of that Act (excise duty on beer) for “£13.05” and “£0.435” there shall be substituted “ £18.00 ” and “ £0.60 ” respectively.

(3)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F1

(5) In section 62(1) of that Act (excise duty on cider) for “£6.05” there shall be substituted “ £7.20 ”.

(6) This section shall be deemed to have come into force on 11th March 1981.

Editorial Information

X1 The text of ss. 1, 7, 8, 9(1)(8) is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and, except as specified, does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

Textual Amendments

F1 S. 1(1)(3)(4) repealed by Finance Act 1982 (c. 39, SIF 40:1), s. 157(6), Sch. 22 Pt. I

2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F2 U.K.

Textual Amendments

F2 S. 2 repealed by Finance Act 1982 (c. 39, SIF 40:1), s. 157(6), Sch. 22 Pt. I

X2 3 Matches and mechanical lighters. U.K.

(1) In section 1(1) of the M1 Matches and Mechanical Lighters Duties Act 1979 (duty on matches at the rate of £0.49 for every 7,200 matches) for “£0.49” there shall be substituted “£1.15”.

(2) In section 6(1) of that Act (duty on mechanical lighters at the rate of £0.20 for each lighter) for “£0.20” there shall be substituted “£0.50”.

(3) In section 6(3) of that Act (exemption for lighters constructed solely for the purpose of igniting gas for domestic use) after the word “domestic” there shall be inserted the words “or industrial”

(4) This section shall be deemed to have come into force on 11th March 1981.

Editorial Information

X2 The text of ss. 3-5, 6(2)(3), 10(2)(4) is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

Marginal Citations

M1 1979 c. 6.

X3 4 Increase on duty on hydrocarbon oil etc. U.K.

(1) In section 6(1) of the M2 Hydrocarbon Oil Duties Act 1979 for the words “a duty of excise at the rate of £0.10 a litre” there shall be substituted the words “a duty of excise at the rate of £0.1382 a litre in the case of light oil and £0.1191 a litre in the case of heavy oil”.

(2) In consequence of subsection (1) above—

(a) in sections 7 and 8(3) and (4)(c) of the said Act of 1979 and Article 3 of the M3 Excise Duties (Gas as Road Fuel) Order 1972 (under which duty is charged by reference to the duty on hydrocarbon oil); and

(b) in section 92(2) of the M4 Finance Act 1965 and section 14(2) of the M5 Finance Act (Northern Ireland) 1966 (grants towards duty on bus fuel),

for the words “hydrocarbon oil” there shall be substituted the words “light oil”.

(3) This section shall be deemed to have come into force at 6 o’clock in the evening on 10th March 1981 but as respects the period beginning at that time and ending at 6 o’clock in the evening on 2nd July 1981 the rate of the duty of excise charged by section 6(1) of the said Act of 1979 shall, notwithstanding subsection (1) above, be £0.1382 a litre in the case of heavy oil as well as light oil and the provisions mentioned in subsection (2) above shall have effect accordingly.

Editorial Information

X3 The text of ss. 3-5, 6(2)(3), 10(2)(4) is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

Marginal Citations

M2 1979 c. 5.

M3 S.I. 1972/567.

M4 1965 c. 25.

M5 1966 c. 21 (N.I.).

X4 5 Energy for refineries etc. U.K.

(1) The Hydrocarbon Oil Duties Act 1979 shall have effect with the following amendments, being amendments providing for relief from duty where energy is produced for use in refineries and other premises used for the production of hydrocarbon oil.

(2) After section 19 there shall be inserted—

“19A Fuel for producing energy for refineries etc.

(1) If on an application made for the purposes of this section by an approved person it is shown to the satisfaction of the Commissioners—

(a) that any quantity of rebated hydrocarbon oil has been used by him, otherwise than at a refinery or other premises used for the production of hydrocarbon oil, as fuel for producing energy; and

(b) that not less than one-sixth or more than one-third of that energy was used in the treatment of hydrocarbon oil at a refinery or in the production of hydrocarbon oil at other premises used for the production of such oil,

the applicant shall be entitled to obtain from the Commissioners repayment of one-third of the amountof excise duty which has been paid in respect of the quantity so used less the rebate allowed in respect of the duty.

(2) In this section “an approved person” means a person for the time being approved in accordance with regulations made for the purposes of this section under section 24(1) below.”

(3) In section 27(1) for the definition of “refinery” there shall be substituted—

““refinery” means any premises which—

(a) are approved by the Commissioners for the treatment of hydrocarbon oil; or

(b) are approved by them for the production of energy for use in the treatment of hydrocarbon oil at premises approved under paragraph (a) above or in the production of hydrocarbon oil at other premises used for the production of such oil;

and the Commissioners may approve any premises under paragraph (b) above if it appears to them that more than one-third of the energy will be produced for such use as is mentioned in that paragraph; ”.

(4) after section 27(1) there shall be inserted—

“(1A) If in the case of any premises which the Commissioners can approve under paragraph (b) of the definition of “refinery” in subsection (1) above it appears to them appropriate to do so, they may direct that the provisions of this Act (other than that definition) shall apply to them as if, instead of being a refinery, they were other premises used for the production of hydrocarbon oil.”

(5) Subsection (2) above has effect in relation to oil used on or after 1st September 1981.

Editorial Information

X4 The text of ss. 3-5, 6(2)(3), 10(2)(4) is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

6 Repayment of hydrocarbon oil duty. U.K.

(1) The M6 Hydrocarbon Oil Duties Act 1979 shall have effect with the amendments in subsections (2) and (3) below, being amendments which enable regulations to be made with respect to applications for repayment of duty under sections 17, 18(1), 19 and 19A of that Act.

X5 (2) In section 24(1) for the words “or section 14(1) above” there shall be substituted the words “, section 14(1), section 17, section 18(1), 19 or section 19A above”.

X5 (3) For paragraph 3 of Schedule 4 there shall be substituted—

“3 Requiring claims or applications for repayment under section 9(4), 17, 18(1), 19 or 19A of this Act to be made at such times and in respect of such periods as are prescribed; providing that no such claim or application shall lie where the amount to be paid is less than the prescribed minimum; and preventing, where a claim or application can be made under section 9(4) or 19, the payment of drawback.”

X6 (4) It is hereby declared for the avoidance of doubt that references in sections 17(1), 18(1) and 19(3) of the said Act of 1979 to duty paid in respect of the oil used as mentioned in those provisions are to the duty less any rebate allowed in respect of it and accordingly those provisions shall have effect, and be deemed always to have had effect, with the insertion after the words “so used” of the words “less any rebate allowed in respect of the duty”.

Editorial Information

X5 The text of ss. 3-5, 6(2)(3), 10(2)(4) is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

X6 The text from "and accordingly" to the end of s. 6(4) is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

Marginal Citations

M6 1979 c. 5.

7 Vehicles excise duty: Great Britain. U.K.

(1) The M7 Vehicles (Excise) Act 1971 shall be amended as follows.

F3 (2)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F4 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) This section has effect in relation to licences taken out after 10th March 1981.

Textual Amendments

F3 S. 7(2)(3) repealed by Finance Act 1982 (c. 39, SIF 40:1), s. 157(6), Sch. 22 Pt. II

F4 S. 7(4) repealed (retrospectively) by Finance Act 1985 (c. 54, SIF 40:1), s. 98(6), Sch. 27 Pt. II

Modifications etc. (not altering text)

C1 The text of ss. 1, 7, 8, 9(1)(8) is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and, except as specified, does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

Marginal Citations

M7 1971 c. 10

X7 8 Vehicles excise duty: Northern Ireland. U.K.

(1) The M8 Vehicles (Excise) Act (Northern Ireland) 1972 shall be amended as follows.

F5 (2)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) This section has effect in relation to licences taken out after 10th March 1981.

Editorial Information

X7 The text of ss. 1, 7, 8, 9(1)(8) is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and, except as specified, does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

Textual Amendments

F5 S. 8(2)(3) repealed by Finance Act 1982 (c. 39, SIF 40:1), s. 157(6), Sch. 22 Pt. II

F6 S. 8(4) repealed (retrospectively) by Finance Act 1985 (c. 54, SIF 40:1), s. 98(6), Sch. 27 Pt. II

Marginal Citations

M8 1972 c. 10 (N.I.).

9 Betting and gaming duties. U.K.

X8 (1) In section 1(2)(b) of the M9 Betting and Gaming Duties Act 1972 and section 17(1)(b) of the M10 Miscellaneous Transferred Excise Duties Act (Northern Ireland) 1972 (general betting duty on bets other than on-course bets) for the words “7½ percent.” there shall be substituted the words “8 per cent.”.

F7 (2)—(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F8 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F9 (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

X8 (8) Subsection (1) above shall be deemed to have come into force on 12th July 1981, . . . F10 and (6) above shall come into force on 1st October 1981.

Editorial Information

X8 The text of ss. 1, 7, 8, 9(1)(8) is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and, except as specified, does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

Textual Amendments

F7 S. 9(2)–(5) repealed by Betting and Gaming Duties Act 1981 (c. 63, SIF 12:2), s. 34(2), Sch. 7

F8 S. 9(6) repealed by Finance Act 1982 (c. 39, SIF 12:2), s. 157(6), Sch. 22 Pt. III

F9 S. 9(7) repealed by Betting and Gaming Duties Act 1981 (c. 63, SIF 12:2), s. 34(2), Sch. 7

F10 Words repealed by Betting and Gaming Duties Act 1981 (c. 63, SIF 12:2), s. 34(2), Sch. 7

Marginal Citations

M9 1972 c. 25.

M10 1972 c. 11 (N.I.).

10 Import and export procedures. U.K.

(1) The M11 Customs and Excise Management Act 1979 shall have effect with the amendments specified in Schedule 6 to this Act, being amendments relating to the control of importation.

X9 (2) For sections 53 to 58 of that Act (which relate to the control of exportation) there shall be substituted the sections set out in Part I of Schedule 7 to this Act ; and the provisions of that Act mentioned in Part II of that Schedule (which also relate to that matter) shall have effect with the amendments there specified.

(3) Subsection (1) above shall come into force on such day as may be appointed by the Commissioners of Customs and Excise by order made by statutory instrument and different days may be appointed in relation to different paragraphs of the Schedule mentioned in that subsection.

X9 (4) Subsection (2) above does not affect the operation of the said Act of 1979 in relation to goods exported before 1st October 1981.

Editorial Information

X9 The text of ss. 3-5, 6(2)(3), 10(2)(4) is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

Modifications etc. (not altering text)

C2 Power of appointment conferred by section 10(3) fully exercised by S.I. 1982/205. Appointed day 1.4.1982

Marginal Citations

M11 1979 c. 2.

11 Miscellaneous customs and excise amendments. U.K.

(1) The enactments mentioned in Schedule 8 to this Act (which relate among other things to the administration and regulation of alcoholic liquor duties, warehousing and excise licences) shall have effect with the amendments there specified.

(2) The following provisions of that Schedule shall come into force on 1st July 1982, namely—

(a) paragraph 5, so far as it affects section 105 of the M12 Customs and Excise Management Act 1979;

(b) paragraph 20, in so far as it affects sections 65(1) to (7), 70, 86(1)(a) and (2) and 89 of the M13 Alcoholic Liquor Duties Act 1979; and

(c) paragraphs 24 to 28.

(3) Section 16 of the M14 Customs Duties (Dumping and Subsidies) Act 1969 (which requires the Secretary of State to lay before Parliament for each financial year a report on the anti-dumping and countervailing duties in force under that Act) shall not apply to any financial year ending after 31st March 1981.

Marginal Citations

M12 1979 c. 2.

M13 1979 c. 4.

M14 1969 c. 16.

Part II U.K.

12—15. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F11 U.K.

Textual Amendments

F11 Ss. 12–15 repealed by Value Added Tax Act 1983 (c. 55), s. 50(2), Sch. 11

Part III U.K.

16—18. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F12 U.K.

Textual Amendments

F12 Ss. 16–18 repealed by Car Tax Act 1983 (c. 53), s. 10(4), Sch. 3

Part IV U.K. Income Tax, Corporation Tax and Capital Gains Tax

Chapter I U.K. General

19—37. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F13 U.K.

Textual Amendments

F13 Ss. 19–37 repealed by Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 31. See 1987 edition for these provisions.

38 Interest charged to capital. U.K.

(1)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F14

(3) In section 269 of the Taxes Act (interest charged to capital), paragraph (c) together with the word “and” immediately preceding it shall be omitted and for the words following that paragraph there shall be substituted the words “the sums so allowable under the said section 32 shall, subject to subsection (1A) below, include the amount of any interest on that borrowed money which is referable to a period or part of a period ending on or before the disposal.

(1A) Subsection (1) above has effect subject to section 33 of the said Act of 1979 and does not apply to interest which is a charge on income.”.

(4) This section has effect in relation to interest paid in any accounting period ending on or after 1st April 1981.

Textual Amendments

F14 S. 38(1)(2) repealed by Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 31

Modifications etc. (not altering text)

C3 The text from “the sums” to the end of s. 38(3) is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2. 1991.

39—51. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F15 U.K.

Textual Amendments

F15 Ss. 39–51 repealed by Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 31

Chapter II U.K. Relief for Investments in New Corporate Trades

52—67. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F16 U.K.

Textual Amendments

F16 Ss. 52–67 repealed by Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 31

Chapter III U.K. Benefits in Kind

68—72. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F17 U.K.

Textual Amendments

F17 Ss. 68–72 repealed by Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 31. See 1987 edition for these provisions.

Chapter IV U.K. Capital Allowances

73—77. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F18 U.K.

Textual Amendments

F18 Ss. 73–77 repealed by Capital Allowances Act 1990 (c. 1), s. 164(4)(5), Sch. 2. See 1989 edition for these provisions.

Chapter V U.K. Capital Gains

[F19 78

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F20

(2) In subsection (3)(a) of [F21 section 79 of the Finance Act 1980] for the words “section 19(3)” there shall be substituted the words “ any provision ”.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F22

(4) This section applies to disposals after 5th april 1981.]

Textual Amendments

F19 S. 78 repealed by Finance Act 1989 (c. 26), s. 187, Sch. 17 Pt. VII in relation to dispoals on or after 14 March 1989 (except where relief given under s. 79 of the Finance Act 1980 in respect of a disposal before that date).

F20 S. 78(1) repealed by Finance Act 1982 (c. 39), ss. 82(4), 157, Sch. 22 Pt. VI in relation to disposals on or after 6 April 1982.

F21 Words substituted by Finance Act 1982 (c. 39), ss. 82(4) in relation to disposals on or after 6 April 1982.

F22 S. 78(3) repealed by Finance Act 1982 (c. 39), ss. 82(4), 157, Sch. 22 Pt. VI in relation to disposals on or after 6 April 1982.

79 Emigration of donee. U.K.

(1) If—

[F23 (a) relief is given under section 126 of the Capital Gains Tax Act 1979 in respect of a disposal to an individual or the trustees of a settlement or under section 147A of that Act in respect of any disposal (“the relevant disposal”);] and

(b) at a time when he has not disposed of the asset in question, the transferee becomes neither resident nor ordinarily resident in the United Kingdom,

then, subject to the following provisions of this section, a chargeable gain shall be deemed to have accrued to the transferee immediately before that time, and its amount shall be equal to the held-over gain (within the meaning of [F24 section 126 or 147A] on the relevant disposal.

(2) For the purposes of subsection (1) above the transferee shall be taken to have disposed of an asset before the time there referred to only if he has made a disposal or disposals in connection with which the whole of the held-over gain on the relevant disposal was represented by reductions made in accordance with [F24 section 126(3)(b) or 147A(3)(b) of the Capital Gains Tax Act 1979]; and where he has made a disposal in connection with which part of that gain was so represented, the amount of the chargeable gain deemed by virtue of this section to accrue to him shall be correspondingly reduced.

(3) The disposals by the transferee that are to be taken into account under subsection (2) above shall not include any disposal to which section 44 of the M15 Capital Gains Tax 1979 (disposals between spouses) applies; but where any such disposal is made by the transferee, disposals by his spouse shall be taken into account under subsection (2) above as if they had been made by him.

(4) Where the relevant disposal was made to an individual, subsection (1) above shall not apply by reason of his becoming neither resident nor ordinarily resident more than six years after the end of the year of assessment in which the relevant disposal was made.

(5) Subsection (1) above shall not apply where the relevant disposal was made to an individual and—

(a) the reason for his becoming neither resident nor ordinarily resident in the United Kingdom is that he works in an employment or office all the duties of which are performed outside the United Kingdom, and

(b) he again becomes resident or ordinarily resident in the United Kingdom within the period of three years from the time when he ceases to be so, without having meanwhile disposed of the asset in question;

and accordingly no assessment shall be made by virtue of subsection (1) above before the end of the said period of three years in any case where the condition in paragraph (a) above is, and the condition of paragraph (b) above may be, satisfied.

(6) For the purposes of subsection (5) above a person shall be taken to have disposed of an asset if he has made a disposal in connection with which the whole or part of the held-over gain on the relevant disposal would, had he been resident in the United Kingdom, have been represented by a reduction made in accordance with [F25 section 126(3)(b) or 147A(3)(b) of the Capital Gains Tax Act 1979]; and subsection (3) above shall have effect for the purposes of this subsection as it has effect for the purposes of subsection (2) above.

(7) Where an amount of tax assessed on a transferee by virtue of subsection (1) above is not paid within the period of twelve months beginning with the date when the tax becomes payable then, subject to subsection (8) below, the transferor may be assessed and charged (in the name of the transferee) to all or any part of that tax.

(8) No assessment shall be made under subsection (7) above more than six years after the end of the year of assessment in which the relevant disposal was made.

(9) Where the transferor pays an amount of tax in pursuance of subsection (7) above, he shall be entitled to recover a corresponding sum from the transferee.

(10) Gains on disposals made after a chargeable gain has under this section been deemed to accrue by reference to a held-over gain shall be computed without any reduction under [F25 section 126(3)(b) or 147A(3)(b) of the Capital Gains Tax Act 1979] in respect of that held-over gain.

Textual Amendments

F23 Words substituted by Finance Act 1989 (c. 26), s. 124, Sch. 14 para. 6(3) in relation to disposals on or after 14 March 1989 (except where relief given under s. 79 of the Finance Act 1980 in respect of a disposal before that date). Previously “(a) relief under section 79 of the Finance Act 1980 is given in respect of a disposal made after 5th April 1981 (“the relevant disposal”)”.

F24 Words substituted by Finance Act 1989 (c. 26), s. 124, Sch. 14 para. 6(3) in relation to disposals on or after 14 March 1989 (except where relief given under s. 79 of the Finance Act 1980 in respect of a disposal before that date). Previously, “the said section 79” and “subsection (1)(b) of the the said section 79”.

F25 Words substituted by Finance Act 1989 (c. 26), s. 124, Sch. 14 para. 6(3)(b) on or after 14 March 1989 (except where relief given under s. 79 of the Finance Act 1980 in respect of a disposal before that date). Previously, “section 79(1)(b) of the Finance Act 1980”.

Modifications etc. (not altering text)

C4 See Finance Act 1986 (c. 41), s. 58(5)—application of s. 79 to the held-over gains of trusts which become dual resident trusts on or after 18 March 1986.

C5 See Finance Act 1988 (c. 39, SIF 63:1, 2), Sch. 9 para. 3—deferred charges on gains before 31st March 1982.

Marginal Citations

M15 1979 c. 14.

80 Gains of non-resident settlements. U.K.

(1) This section applies to a settlement for any year of assessment (beginning on or after 6th April 1981) during which the trustees are at no time resident or ordinarily resident in the United Kingdom if the settlor or one of the settlors is at any time during that year, or was when he made his settlement, domiciled and either resident or ordinarily resident in the United Kingdom.

(2) There shall be computed in respect of every year of assessment for which this section applies the amount on which the trustees would have been chargeable to tax under section 4(1) of the M16 Capital Gains Tax Act 1979 if they had been resident or ordinarily resident in the United Kingdom in the year; and that amount, together with the corresponding amount in respect of any earlier such year so far as not already treated under subsection (3) or section 81(2) below as chargeable gains accruing to beneficiaries under the settlement, is in this section and sections 81 and 82 below referred to as the trust gains for the year.

(3) Subject to the following provisions of this section, the trust gains for a year of assessment shall be treated as chargeable gains accruing in that year to beneficiaries of the settlement who receive capital payments from the trustees in that year or have received such payments in any earlier year.

(4) The attribution of chargeable gains to beneficiaries under subsection (3) above shall be made in proportion to, but shall not exceed, the amounts of the capital payments received by them.

(5) A capital payment shall be left out of account for the purposes of subsections (3) and (4) above to the extent that chargeable gains have by reason of the payment been treated as accruing to the recipient in an earlier year.

(6) A beneficiary shall not be charged to tax on chargeable gains treated by virtue of subsection (3) above as accruing to him in any year unless he is domiciled in the United Kingdom at some time in that year.

(7) For the purposes of this section a settlement arising under a will or intestacy shall be treated as made by the testator or intestate at the time of his death.

(8) Section 17 of the Capital Gains Tax Act 1979 shall not apply as respects chargeable gains accruing to the trustees of a settlement after 5th April 1981; and the references in subsections (3) and (4) above to capital payments received by beneficiaries do not include references to any payment received before 10th March 1981, or any payment received on or after that date [F26 and before the 6th April 1984] so far as it represents a chargeable gain which accrued to the trustees before 6th April 1981.

Textual Amendments

F26 Words inserted by Finance Act 1984 (c. 43), s. 70(3)

Modifications etc. (not altering text)

C6 See Income and Corporation Taxes 1988 (c. 1, SIF 63:1), s. 762—ss. 80 to 84 to have effect for offshore income gains subject to 1988 s. 762(4) and to the modifications contained in 1988 s. 762.

C7 See Finance Act 1984 (c. 43), s. 70, Sch. 14 paras. 7(5), 8(3)(4), 12(2)—capital payments to be left out of account for the purposes of s. 80(3)(4) where postponement of capital gains tax under 1984 Sch. 14

Marginal Citations

M16 1979 c. 14.

Valid from 25/07/1991

[80A F27 Gains of dual-resident settlements. U.K.

(1) Section 80 above also applies to a settlement for any year of assessment beginning on or after 6th April 1991 if—

(a) the trustees are resident in the United Kingdom during any part of the year or ordinarily resident in the United Kingdom during the year,

(b) at any time of such residence or ordinary residence they fall to be regarded for the purposes of any double taxation relief arrangements as resident in a territory outside the United Kingdom, and

(c) the settlor or one of the settlors is at any time during that year, or was when he made his settlement, domiciled and either resident or ordinarily resident in the United Kingdom;

and “double taxation relief arrangements” here means arrangements having effect by virtue of section 788 of the Taxes Act 1988 (as extended to capital gains tax by section 10 of the Capital Gains Tax Act 1979).

(2) In respect of every year of assessment for which section 80 above applies by virtue of this section, section 80 shall have effect as if the amount to be computed under section 80(2) were the assumed chargeable amount; and the reference in section 80(2) to the corresponding amount in respect of an earlier year shall be construed as a reference to the amount computed under section 80(2) apart from this section or (as the case may be) the amount computed under section 80(2) by virtue of this section.

(3) For the purposes of subsection (2) above the assumed chargeable amount in respect of a year of assessment is the lesser of the following two amounts—

(a) the amount on which the trustees would be chargeable to tax for the year under section 4(1) of the Capital Gains Tax Act 1979 on the assumption that the double taxation relief arrangements did not apply;

(b) the amount on which, by virtue of disposals of protected assets, the trustees would be chargeable to tax for the year under section 4(1) of that Act on the assumption that those arrangements did not apply.

(4) For the purposes of subsection (3)(b) above assets are protected assets if—

(a) they are of a description specified in the double taxation relief arrangements, and

(b) were the trustees to dispose of them at any relevant time, the trustees would fall to be regarded for the purposes of the arrangements as not liable in the United Kingdom to tax on gains accruing to them on the disposal.

(5) For the purposes of subsection (4) above—

(a) the assumption specified in subsection (3)(b) above shall be ignored;

(b) a relevant time is any time, in the year of assessment concerned, when the trustees fall to be regarded for the purposes of the arrangements as resident in a territory outside the United Kingdom;

(c) if different assets are identified by reference to different relevant times, all of them are protected assets.

(6) In computing the assumed chargeable amount in respect of a particular year of assessment, the effect of Schedule 10 to the Finance Act 1988 (settlor chargeable instead of trustees in certain circumstances) shall be ignored.

(7) For the purposes of section 80 above as it applies by virtue of this section, capital payments received before 6th April 1991 shall be disregarded.]

Textual Amendments

F27 S. 80A inserted by Finance Act 1991 (c. 31, SIF 63:2), s. 91, Sch. 18, para.2.

Modifications etc. (not altering text)

C8 S. 80A: definition of "capital payment" applied by Finance Act 1991 (c. 31, SIF 63:2), s. 90, Sch. 17 para. 1(c).

81 Migrant settlements. U.K.

(1) Where a period of one or more years of assessment for which section 80 above applies to a settlement (in this section referred to as a “non-resident period”) succeeds a period of one or more years of assessment in each of which the trustees were at some time resident or ordinarily resident in the United Kingdom (in this section referred to as a “resident period”), a capital payment received by a beneficiary in the resident period shall be disregarded for the purposes of section 80 if it was not made in anticipation of a disposal made by the trustees in the non-resident period.

(2) Where—

(a) a non-resident period is succeeded by a resident period, and

(b) the trust gains for the last year of the non-resident period are not (or not wholly) treated as chargeable gains accruing in that year to beneficiaries,

then, subject to subsection (3) below, those trust gains (or the outstanding part of them) shall be treated as chargeable gains accruing in the first year of the resident period to beneficiaries of the settlement who receive capital payments from the trustees in that year; and so on for the second and subsequent years until the amount treated as accruing to beneficiaries is equal to the amount of the trust gains for the last year of the non-resident period.

(3) Subsections (4) and (6) of section 80 above shall apply in relation to subsection (2) above as they apply in relation to subsection (3) of that section

82 Transfers between settlements. U.K.

(1) If in a year of assessment for which section 80 or 81(2) above applies to a settlement (“the transferor settlement”) the trustees transfer all or part of the settled property to the trustees of another settlement (“the transferee settlement”) then, subject to the following provisions—

(a) if section 80 applies to the transferee settlement for the year, its trust gains for the year shall be treated as increased by an amount equal to the outstanding trust gains for the year of the transferor settlement or, where part only of the settled property is transferred, to a proportionate part of those trust gains;

(b) if section 81(2) applies to the transferee settlement for year (otherwise than by virtue of paragraph (c) below), the trust gains referred to in section 81(2) shall be treated as increased by the amount mentioned in paragraph (a) above;

(c) if (apart from this paragraph) neither section 80 nor section 81(2) above applies to the transferee settlement for the year, section 81(2) shall apply to it as if the year were the first year of a resident period succeeding a non-resident period and the trust gains referred to in section 81(2) were equal to the amount mentioned in paragraph (a) above.

(2) Subject to subsection (3) below, the reference in subsection (1)(a) above to the outstanding trust gains for the year of the transferor settlement is a reference to the amount of its trust gains for the year so far as they are not treated under section 80(3) above as chargeable gains accruing to beneficiaries in that year.

(3) Where section 81(2) above applies to the transferor settlement for the year, the reference in subsection (1)(a) above to the outstanding trust gains of the settlement is a reference to the trust gains referred to in section 81(2) so far as not treated as chargeable gains accruing to beneficiaries in that or an earlier year.

(4) This section shall not apply to a transfer so far as it is made for consideration in money or money’s worth.

Valid from 25/07/1991

[82A F28 Payments by and to companies. U.K.

(1) Where a capital payment is received from a qualifying company which is controlled by the trustees of a settlement at the time it is received, for the purposes of sections 80 to 82 above it shall be treated as received from the trustees.

(2) Where a capital payment is received from the trustees of a settlement (or treated as so received by virtue of subsection (1) above) and it is received by a non-resident qualifying company, the rules in subsections (3) to (6) below shall apply for the purposes of sections 80 to 82 above.

(3) If the company is controlled by one person alone at the time the payment is received, and that person is then resident or ordinarily resident in the United Kingdom, it shall be treated as a capital payment received by that person.

(4) If the company is controlled by two or more persons (taking each one separately) at the time the payment is received, then—

(a) if one of them is then resident or ordinarily resident in the United Kingdom, it shall be treated as a capital payment received by that person;

(b) if two or more of them are then resident or ordinarily resident in the United Kingdom (the residents) it shall be treated as being as many equal capital payments as there are residents and each of them shall be treated as receiving one of the payments.

(5) If the company is controlled by two or more persons (taking them together) at the time the payment is received and each of them is then resident or ordinarily resident in the United Kingdom—

(a) it shall be treated as being as many capital payments as there are participators in the company at the time it is received, and

(b) each such participator (whatever his residence or ordinary residence) shall be treated as receiving one of the payments, quantified on the basis of a just and reasonable apportionment.

(6) But where (by virtue of subsection (5) above and apart from this subsection) a participator would be treated as receiving less than one twentieth of the payment actually received by the company, he shall not be treated as receiving anything by virtue of subsection (5) above.

(7) For the purposes of subsection (1) above a qualifying company is a close company or a company which would be a close company if it were resident in the United Kingdom.

(8) For the purposes of subsection (1) above a company is controlled by the trustees of a settlement if it is controlled by the trustees alone or by the trustees together with a person who (or persons each of whom) falls within subsection (9) below.

(9) A person falls within this subsection if—

(a) he is a settlor in relation to the settlement, or

(b) he is connected with a person falling within paragraph (a) above.

(10) For the purposes of subsection (2) above a non-resident qualifying company is a company which is not resident in the United Kingdom and would be a close company if it were so resident.

(11) For the purposes of this section the question whether a company is controlled by a person or persons shall be construed in accordance with section 416 of the Taxes Act 1988; but in deciding that question for those purposes no rights or powers of (or attributed to) an associate or associates of a person shall be attributed to him under section 416(6) if he is not a participator in the company.

(12) In this section “participator” has the meaning given by section 417(1) of the Taxes Act 1988.

(13) This section shall apply to payments received on or after 19th March 1991.]

Textual Amendments

F28 S. 82A inserted by Finance Act 1991 (c. 31, SIF 63:2), s. 91, Sch. 18 para.4

Modifications etc. (not altering text)

C9 S. 82A: definition of "capital payment" applied by Finance Act 1991 (c. 31, SIF 63:2), s. 90, Sch. 17 para. 1(c).

83 Provisions supplementary to sections 80 to 82. U.K.

(1) In sections 80 to 82 above “capital payment” means any payment which is not chargeable to income tax on the beneficiary or, in the case of a beneficiary who is neither resident nor ordinarily resident in the United Kingdom, any payment received otherwise than as income.

(2) In subsection (1) above references to a payment include references to the transfer of an asset and the conferring of any other benefit, and to any occasion on which settled property becomes property to which section 46 of the M17 Capital Gains Tax Act 1979 applies.

(3) The fact that the whole or part of a benefit is by virtue of [F29 section 740(2)(b) of the Taxes Act] treated as the recipient’s income for a year of assessment after that in which it is received—

(a) shall not prevent the benefit or that part of it being treated for the purposes of sections 80 to 82 above as a capital payment in relation to any year of assessment earlier than that in which it is treated as his income; but

(b) shall preclude its being treated for those purposes as a capital payment in relation to that or any later year of assessment.

(4) For the purposes of sections 80 to 82 above the amount of a capital payment made by way of loan, and of any other capital payment which is not an outright payment of money, shall be taken to be equal to the value of the benefit conferred by it.

(5) For the purposes of sections 80 to 82 above a capital payment shall be regarded as received by a beneficiary from the trustees of a settlement if—

(a) he receives it from them directly or indirectly, or

(b) it is directly or indirectly applied by them in payment of any debt of his or is otherwise paid or applied for his benefit, or

(c) it is received by a third person at the beneficiary’s direction.

(6) Section 29(3) of the M18 Capital Gains Tax Act 1979 (losses accruing to non-residents not to be allowable losses) shall not prevent losses accruing to trustees in a year of assessment for which section 80 above or section 17 of that Act applied to the settlement from being allowed as a deduction from chargeable gains accruing in any later year beginning after 5th April 1981 (so far as they have not previously been set against gains for the purposes of a computation under either of those sections or otherwise).

[F30 (7) In sections 80 to 82 above and in the preceding provisions of this section—

• “settlement” and “settlor” have the meaning given by section [F31 681(4)] of the Taxes Act and “settlor” includes, in the case of a settlement arising under a will or intestacy, the testator or intestate; and

• “settled property” shall be construed accordingly.]

Textual Amendments

F29 Words substituted by Finance Act 1990 (c. 29), s. 89, Sch. 14 para. 18 (correction of errors)—treated as if made by Income and Corporation Tax Act 1988. Previously “section 45(2)(b) above”.

F30 S. 83(7) added by Finance Act 1984 (c. 43), s. 71

F31 Words substituted by Income and Corporation Taxes Act 1988, Sch. 29 para. 32

Modifications etc. (not altering text)

C10 See Finance Act 1984 (c. 43), s. 70(1), Sch. 14 para. 1(2)—subject to 1984 s. 70(4), s. 83 to apply for the purposes of 1984 Sch. 14 as it does for 1981 ss. 80 to 82.

Marginal Citations

M17 1979 c. 14.

M18 1979 c. 14.

84 Power to obtain information for purposes of sections 80 to 82. U.K.

(1) The Board may by notice in writing require any person to furnish them within such time as they may direct, not being less than twenty-eight days, with such particulars as they think necessary for the purposes of sections 80 to 82 above.

(2) Subsections (2) to (4) of section 481 of the Taxes Act shall have effect in relation to subsection (1) above as they have effect in relation to section [F32 745(1)], but in their application by virtue of this subsection—

(a) references to Chapter III of Part XVII of the Taxes Act shall be construed as references to sections 80 to 82 above; and

(b) the expressions “settlement” and “settlor” have the same meanings as in those sections.

Textual Amendments

F32 Words substituted by Income and Corporation Taxes Act 1988 (c. 1), Sch. 29 para. 32

85 Non-resident trustees and non-resident companies. U.K.

(1) The persons treated by section 15 of the Capital Gains Tax Act 1979 as if a part of a chargeable gain accruing to a company had accrued to them shall include trustees owning shares in the company if when the gain accrues to the company the trustees are neither resident nor ordinarily resident in the United Kingdom.

(2) This section applies to gains accruing to a company on or after 10th March 1981.

86 Transfers into settlement. U.K.

(1) In section 53 of the M19 Capital Gains Tax Act 1979 (which provides that a gift in settlement is a disposal of the entire property settled notwithstanding that the donor is a beneficiary or trustee) for the words “gift in” and “donor” there shall be substituted the words “transfer into” and “transferor” respectively.

(2) This section shall be deemed to have come into force on the 10th March 1981.

Marginal Citations

M19 1979 c. 14.

87 Appointments to persons under disability. U.K.

(1) In section 54 of the Capital Gains Tax Act 1979 (deemed disposal for market value when a person becomes absolutely entitled to settled property) after subsection (2) there shall be added—

“(3) References in this section to the case where a person becomes absolutely entitled to settled property as against the trustee shall be taken to include references to the case where a person would become so entitled but for being an infant or other person under disability.”

(2) In section 56(1) of that Act (death of life tenant) after the word “becomes” there shall be inserted the words “(or would but for a disability become)”.

(3) This section applies where the occasion concerned occurs on or after 10th March 1981.

Modifications etc. (not altering text)

C11 The text beginning “(3) References in this section” to the end of s. 87(1) is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

88 Disposal of interests in non-resident settlements. U.K.

(1) Subsection (1) of section 58 of the Capital Gains Tax Act 1979 shall not apply to the disposal of an interest in settled property, other than one treated under subsection (2) of that section as made in consideration of obtaining the settled property, if at the time of the disposal the trustees are neither resident nor ordinarily resident in the United Kingdom.

(2) If—

(a) a gain accrues to a person (“the transferor”) on the disposal by him of an interest in settled property but, by reason of section 58(1) of the Capital Gains Tax Act 1979, it is not a chargeable gain, and

(b) at any time after the disposal the trustees of the settlement become neither resident nor ordinarily resident in the United Kingdom,

then, subject to subsection (3) below, a chargeable gain shall be deemed to have accrued to the trustees immediately before that time, and its amount shall be equal to that of the gain which accrued to the transferor

(3) Subsection (2) above shall not apply if, before the end of the year in which they become neither resident nor ordinarily resident, the trustees have disposed of all the assets which, when the transferor disposed of his interest, constituted the settled property in which the interest subsisted; and where under that subsection a chargeable gain is deemed to accrue to the trustees at any time its amount shall not exceed the market value at that time of such of those assets as have not been disposed of by the trustees before the end of that year.

(4) For the purposes of subsection (3) above the trustees shall be regarded as not having disposed of an asset if and to the extent that they retain part of it, an interest in or right over it, or property derived from it.

(5) Where an amount of tax assessed on trustees by virtue of this section is not paid within the period of twelve months beginning with the date when the tax becomes payable, the transferor may be assessed and charged (in the name of the trustees) to all or any part of that tax but no assessment may be made under this subsection after the end of the period of six years beginning with the date when the transferor disposed of his interest.

(6) Where the transferor pays an amount of tax in pursuance of subsection (5) above, he shall be entitled to recover a corresponding sum from the trustees.

(7) This section applies to disposals on or after 10th March 1981.

X10 89 Trusts for the disabled. U.K.

(1) Paragraph 5 of Schedule 1 to the M20 Capital Gains Tax Act 1979 (which extends to certain trusts for the disabled the £3,000 exemption given to individuals by section 5) shall be amended as follows.

(2) In sub-paragraph (1) for the words from “any of the property” to “that person” there shall be substituted the words—

“(a) not less than half of the property which is applied is applied for the benefit of that person, and

(b) that person is entitled to not less than half of the income arising from the property, or no such income may be applied for the benefit of any other person.”

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

“(1A) The trusts on which settled property is held shall not be treated as falling outside sub-paragraph (1) above by reason only of the powers conferred on the trustees by section 32 of the Trustee Act 1925 or section 33 of the Trustee Act (Northern Ireland) 1958 (powers of advancement); and the reference in that sub-paragraph to the life-time of a person shall, where the income from the settled property is held for his benefit on trusts of the kind discribed in section 33 of the Trustee Act 1925 (protective trusts), be construed as a reference to the period during which the income is held on trust for him.

(1B) In relation to a settlement which is one of two or more qualifying settlements comprised in a group, this paragraph shall have effect as if for the references in section 5 of this Act to £3,000 there were substituted references to £300 or, if it is more, to such amount as results from dividing £3,000 by the number of settlements in the group.

(1C) For the purposes of sub-paragraph (1B) above—

(a) a qualifying settlement is any settlement (other than an excluded settlement) which is made on or after 10th March 1981 and to the trustees of which this paragraph applies for the year of assessmnt; and

(b) all qualifying settlements in relation to which the same person is the settlor constitute a group.

(1D) If, in consequence of two or more persons being settlors in relation to it, a settlement is comprised in two or more groups comprising different numbers of settlements, sub-paragraph (1B) above shall apply to it as if the number by which the amount of £3,000 is to be divided were the number of settlements in the largest group.”

(4) At the end of sub-paragraph (2) there shall be added the words “; and “settlor” and “excluded settlement” have the same meanings as in paragraph 6 below”.

(5) After sub-paragraph (2) there shall be added—

“(3) An inspector may by notice in writing require any person, being a party to a settlement, to furnish him within such time as he may direct (not being less than twenty-eight days) with such particulars as he thinks necessary for the purposes of this paragraph.”

Editorial Information

X10 The text of part of ss. 89, 90, 91, 114, 116, 119 is in the form in which it was originally enacted: it was not reproduced in Satutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

Marginal Citations

M20 1979 c. 14.

X11 90 Market value. U.K.

(1) After section 29 of the Capital Gains Tax Act 1979 there shall be inserted—

“29A Disposals and acquisitions treated as made at market value.

(1) Subject to the provisions of this Act, a person’s acquisition or disposal of an asset shall for the purposes of this Act be deemed to be for a consideration equal to the market value of the asset—

(a) where he acquires or, as the case may be, disposes of the asset otherwise than by way of a bargain made at arm’s length, and in particular where he acquires or disposes of it by way of gift or on a transfer into settlement by a settlor or by way of distribution from a company in respect of shares in the company, or

(b) where he acquires or, as the case may be, disposes of the asset wholly or partly for a consideration that cannot be valued, or in connection with his own or another’s loss of office or employment or diminution of emoluments, or otherwise in consideration for or recognition of his or another’s services or past services in any office or employment or of any other service rendered or to be rendered by him or another.

(2) Except in the case specified in subsection (4) below, subsection (1) above shall not apply to the acquisition of an asset if—

(a) there is no corresponding disposal of it, or the corresponding disposal is made by an excluded person, and

(b) there is no consideration in money or money’s worth or the consideration is of an amount or value lower than the market value of the asset.

(3) Where in the case of an acquisition within subsection (2) above there is a corresponding disposal by an excluded person, subsection (1) above shall not apply to that disposal.

(4) The exception referred to in subsection (2) above is the acquisition by an individual of tangible movable property or currency in circumstances where there is a corresponding disposal by an individual who is neither resident nor ordinarily resident in the United Kingdom ; and for this purpose “tangible movable property” dos not include commodities of a kind dealt with on a terminal market, or a mere right in or over any property.

(5) In this section “excluded person” means—

(a) a person who is neither resident nor ordinarily resident in the United Kingdom ; or

(b) a person who is wholly exempt from tax in respect of chargeable gains, or would be so exempt on making a claim for exemption ; or

(c) a charity ; or

(d) a registered friendly society ; or

(e) a person making the disposal for the purposes of —

(i) a fund to which section 218 or 226(6) of the Taxes Act or section 36 of the Finance Act 1980 applies, or

(ii) an exempt approved scheme or statutory scheme as defined in Chapter II of Part II of the Finance Act 1970.”

(2) In section 32 of the M21 Capital Gains Tax Act 1979 (allowance of expenditure in computation of gains) after subsection (4) there shall be added—

“(5) Where—

(a) a person acquires an asset for no consideration in money or money’s worth or for a consideration of an amount or value lower than the market value of the asset, and is not treated under any provision of this Act as acquiring it for a consideration other than the actual consideration, and

(b) there is a corresponding disposal of the asset by a person who is neither resident nor ordinarily resident in the United Kingdom, and

(c) a charge to income tax, corporation tax or capital gains tax arises in respect of the acquistion,

the sums allowable under this section as a deduction in the computation made on the first-mentioned person’s disposal of the asset shall include a sum equal to the amount in respect of which the charge arises.

(6) The condition in paragraph (c) of subsection (5) above shall be taken to be satisfied where under section 80(3) of the Finance Act 1981 chargeable gains are treated as accruing to a person in any year by reason of his acquisition of an asset in that or an earlier year ; and the reference in subsection (5) above to the amount in respect of which the charge arises shall be taken to be a reference to the amount of the gains treated as accruing to him.”.

(3) Subsection (3) of section 19 of the M22 Capital Gains Tax Act 1979 (which is superseded by this section) shall cease to have effect; and—

(a) for the references to that subsection (or to a paragraph of it) in sections 49(5), 62(2), 90(3), 126(6), 146(2) and 149(2) of that Act and in section 47(1)(b)(ii) of the M23 Finance Act 1980 there shall be substituted references to section 29A(1) of the said Act of 1979; and

(b) In section 62(5) of that Act for the words “the amount of the consideration for the acquisition being” there shall be substituted the words “where the amount of the consideration for the acquisition is”.

(4) This section has effect in relation to acquisitions and disposals on or after 10th March 1981.

Editorial Information

X11 The text of part of ss. 89, 90, 91, 114, 116, 119 is in the form in which it was originally enacted: it was not reproduced in Satutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

Marginal Citations

M21 1979 c. 14.

M22 1979 c. 14.

M23 1980 c. 48.

X12 91 Consideration on reorganisation of share capital etc. U.K.

(1) In section 79 of the Capital Gains Tax Act 1979 at the end of subsection (1) there shall be added—

“Provided also that, in the case of a reorganisation on or after 10th March 1981, any consideration given for the new holding or any part of it otherwise than by way of a bargain made at arm’s length shall be disregarded to the extent that its amount or value exceeds the relevant increase in value; and for this purpose “the relevant increase in value” means the amount by which the market value of the new holding immediately after the reorganisation exceeds the market value of the original shares immediately before the reorganisation.”.

(2) In consequence of subsection (1) above—

(a) in section 89(2) of the Capital Gains Tax Act 1979, for the word “proviso” there shall be substituted the word “provisos”; and

(b) in section 37(12) of the Finance Act 1980, in the definition of “new consideration”, for the words “the proviso” there shall be substituted the words “the first proviso”.

Editorial Information

X12 The text of part of ss. 89, 90, 91, 114, 116, 119 is in the form in which it was originally enacted: it was not reproduced in Satutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

Part V U.K. Capital Transfer Tax

92—95. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F33 U.K.

Textual Amendments

F33 Ss. 92–95 repealed by Capital Transfer Tax Act 1984 (c. 51), ss. 274, 277, Schs. 7, 9

96

(1)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F34

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F35

(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F35

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F36

Textual Amendments

F34 S. 96(1)(2) repealed by Capital Transfer Tax Act 1984 (c. 51), ss. 274, 277, Schs. 7, 9

F35 S. 96(3)(e) repealed by Finance Act 1989 (c. 26, SIF 63:2), s. 187(1), Sch. 17 Pt. VII Note 7

F36 S. 96(4) repealed by Finance Act 1989 (c. 26, SIF 63:2), s. 187(1), Sch. 17 Pt. VII Note 7

97—106. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F37 U.K.

Textual Amendments

F37 Ss. 97–106 repealed by Capital Transfer Tax Act 1984 (c. 51), ss. 274, 277, Schs. 7, 9

Part VI U.K. Stamp Duty

107 Sale of houses at discount by local authorities etc. U.K.

(1) Where a conveyance or transfer to which this section applies is subject contingently to the payment of any money (whether by virtue of that conveyance or transfer or otherwise), then, notwithstanding section 57 of the M24 Stamp Act 1891, that money shall not be deemed to be part of the consideration in respect of which the conveyance or transfer is chargeable with ad valorem duty.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F38

(3) This section applies to any conveyance or transfer on sale of a dwelling-house (including the grant of a lease) at a discount by—

(a) any Minister of the Crown or Northern Ireland department;

(b) a [F39 local housing authority within the meaning of the Housing Act 1985], a county council, a district council within the meaning of the M25 Local Government Act (Northern Ireland) 1972 or in Scotland a regional, district or islands council, the common good of such a council or any trust under its control;

(c) the Housing Corporation;

[F40 (ca) Housing for Wales]

(d) the [F41 Scottish Homes];

(e) the Northern Ireland Housing Executive;

(f) a housing association registered under [F42 the Housing Associations Act 1985] or Article 124 of the M26 Housing (Northern Ireland) Order 1981;

[F43 (ff) a housing action trust established under Part III of the Housing Act 1988;]

(g) a development corporation established by an order made or having effect as if made under the M27 New Towns Act 1965 or the M28 New Towns (Scotland) Act 1968 or an urban development corporation established by an order made under section 135 of the M29 Local Government, Planning and Land Act 1980;

(h) the Commission for the New Towns or a new town commission established under section 7 of the M30 New Towns Act (Northern Ireland) 1965;

(i) the Development Board for Rural Wales;

(j) the Council of the Isles of Scilly;

(k) a police authority within the meaning of section 62(b) of the M31 Police Act 1964 or section 2(1) or 19(9)(b) of the M32 Police (Scotland) Act 1967, or the Police Authority for Northern Ireland;

(l) an Education and Libraries Board established under the M33 Education and Libraries (Northern Ireland) Order 1972;

(m) any person mentioned in paragraph (e), (i), (j) or (l) of section 1(10) of the M34 Tenants’ Rights, Etc. (Scotland) Act 1980.

[F44 (n) the United Kingdom Atomic Energy Authority]

[F45 (o) such other body as the Treasury may, by order made by statutory instument, prescribe for the purposes of this section]

[F46 (3A) This section also applies to any conveyance or transfer on sale of a dwelling house where the conveyance or transfer is made pursuant to a sub-sale made at a discount by a body falling within subsection (3)(f) above.]

[F47 (3B) This section also applies to a conveyance or transfer on sale (including the grant of a lease) by a person against whom the right to buy under Part V of the Housing Act 1985 is exercisable by virtue of section 171A of that Act (preservation of right to buy on disposal to private sector landlord) to a person who is the qualifying person for the purposes of the preserved right to buy and in relation to whom that dwelling-house is the qualifying dwelling-house.]

(4) This section applies to instruments executed on or after 23rd March 1981 and shall be deemed to have come into force on that date.

Textual Amendments

F38 S. 107(2) repealed by Finance Act 1985 (c. 54, SIF 114), s. 98(6), Sch. 27 Pt. IX(1)

F39 Words substituted by Housing (Consequential Provisions) Act 1985 (c. 71, SIF 61), s. 4, Sch. 2 para. 48(a)

F40 S. 107(3)(ca) inserted (E.W.S.) by Housing Act 1988 (c. 50, SIF 61), s. 140, Sch. 17 Pt. II para. 105

F41 Reference to Scottish Homes substituted (E.W.S.) for the reference to Scottish Special Housing Association by Housing (Scotland) Act (c. 43, SIF 61), Ss. 1, 3 Sch. 2 para. 1

F42 Words substituted by Housing (Consequential Provisions) Act 1985 (c. 71, SIF 61), s. 4, Sch. 2 para. 48(b)

F43 S. 107(3)(ff) inserted by Finance Act 1988 (c. 39, SIF 114), s. 142(2)

F44 S. 107(3)(n) added by Finance Act 1984 (c. 43, SIF 114), s. 110(1)(2)(4)

F45 S. 107(3)(o) added by Finance Act 1984 (c. 43, SIF 114), s. 110(5)

F46 S. 107(3A) added by Finance Act 1984 (c. 43, SIF 114), s. 110(1)(3)(4)

F47 S. 107(3B) inserted (prosp.) by Housing and Planning Act 1986 (c. 63, SIF 114), s. 24(1)(2), Sch. 5 Pt. II para. 18.

Modifications etc. (not altering text)

C12 S. 107 applied by S.I. 1986/2092, art. 12

Marginal Citations

M24 1891 c. 39.

M25 1972 c. 9 (N.I.)

M26 S.I. 1981/156 (N.I. 3).

M27 1965 c. 59.

M28 1968 c. 16.

M29 1980 c. 65.

M30 1965 c. 13. (N.I.)

M31 1964 c. 48.

M32 1967 c. 77.

M33 S.I. 1972/1263 (N.I. 12).

M34 1980 c. 52.

108 Shared ownership transactions. U.K.

(1) Section 97 of the M35 Finance Act 1980 (shared ownership transactions) shall have effect with the amendments specified in subsections (2) to (4) below.

X13 (2) In subsection (1) after the word “value” there shall be inserted the words “ or sum ”.

X13 (3) In subsection (2)—

(a) for paragraph (b) there shall be substituted—

“(b) is granted partly in consideration of a premium calculated by reference to—

(i) the market value of the dwelling, or

(ii) a sum calculated by reference to that value, and partly in consideration of rent” ; and

(b) in paragraph (d) for the words “paragraph (b) above” there shall be substituted the words “ paragraph (b)(i) above or, as the case may be, the sum referred to in paragraph (b) (ii) above ” and at the end there shall be added the words “ or as the case may be, to that sum ”.

X13 (4) In subsection (3)(b) for the reference to Article 13 of the M36 Housing (Northern Ireland) Order 1976 there shall be substituted a reference to Article 124 of the Housing (Northern Ireland) Order 1981.

(5) Where a lease is granted by a body mentioned in subsection (3) of the said section 97 which—

(a) is of a dwelling for the exclusive use of the lessee or, if there are joint lessees, of those lessees;

(b) provides that the lessee may on payment of a sum require the terms of the lease to be altered so that the rent payable under it is reduced;

(c) is granted partly in consideration of rent and partly in consideration of a premium calculated by reference to—

(i) the premium obtainable on the open market for the grant of a lease containing the same terms as the lease but with the substitution for the rent payable under the lease of the minimum rent, or

(ii) a sum calculated by reference to that premium; and

(d) contains a statement of the minimum rent and the premium referred to in paragraph (c)(i) above or, as the case may be, the sum referred to in paragraph (c)(ii) above and a statement to the effect that the parties intend duty to be charged in accordance with this section by reference to that rent and that premium or, as the case may be, that sum,

the lease shall be chargeable to stamp duty as if the premium paid by the lessee were equal to the premium or, as the case may be, the sum, stated in the lease in accordance with paragraph (d) above and the rent payable were as so stated.

(6) In subsection (5) above “minimum rent” in relation to any lease means the lowest rent which could become payable under the lease if it were altered as mentioned in paragraph (b) of that subsection at the date when the lease is granted.

(7) This section applies to instruments executed on or after 23rd March 1981 and shall be deemed to have come into force on that date.

Editorial Information

X13 The text of s. 108(2)-(4) is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

Modifications etc. (not altering text)

C13 S. 108(5)(6) extended by Finance Act 1987 (c. 16, SIF 114), s. 54(2)–(4)

Marginal Citations

M35 1980 c. 48.

M36 S.I 1981/156 (N.I. 3).

109 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F48 U.K.

Textual Amendments

F48 S. 109 repealed by Finance Act 1986 (c. 41, SIF 40:1), s. 114, Sch. 23 Pt. IX(2)

110 Pooled pension funds. U.K.

In Part VII of the M37 Finance Act 1946, Part III of the M38 Finance (No. 2) Act (Northern Ireland) 1946, . . . F49 the references to unit trust schemes shall be deemed not to include references to common investment arrangements made by the trustees of exempt approved schemes (within the meaning of section [F50 592(1) of the Taxes Act]) solely for the purposes of the schemes.

Textual Amendments

F49 Words repealed by Finance Act 1988 (c. 39, SIF 114), s. 148, Sch. 14 Pt. XI

F50 Words substituted by Finance Act 1988 (c. 39, SIF 114), s. 146, Sch. 13 Pt. II paras. 21, 25

Marginal Citations

M37 1946 c. 64.

M38 1946 c. 17 (N.I.)

Part VII U.K. Petroleum Revenue Tax

111 Restriction of expenditure supplement. U.K.

(1) Expenditure taken into account under section 2(9) (b)(i) or (c)(i) of the M39 Oil Taxation Act 1975 (“the principal Act”) in computing the assessable profit or allowable loss accruing to a participator in a chargeable period from an oil field shall not qualify for supplement under section 2(9)(b)(ii) or (c)(ii) of that Act if it is incurred after the end of the chargeable period (“the net profit period”) [F51 which is the earliest chargeable period ending after a development decision has been made for the field in which—

(a) the amount of oil won and saved from the field exceeds 1,000 metric tonnes (counting 1,100 cubic metres of gas at a temperature of 15 degrees centigrade and pressure of one atmosphere as equilavent to one metric tonne); and

(b) a net profit from the field accrues to the participator;

and subsection (7) of section 5A of the principal Act (time when development decision is made) shall apply for the purposes of this subsection as it applies for the purposes of subsection (1)(c) of that section.]

(2) Subject to subsections (3) and (4) below, a net profit shall be treated as having accrued to a participator from an oil field in a chargeable period when the total assessable profits (without any reduction under section 7 or 8 of the principal Act) that have accrued to him from the field in chargeable periods up to and including that period [F52 exceed the aggregate of the total allowable losses that have so accrued to him and the total amount of advance petroleum revenue tax paid by him in respect of that field for chargeable periods up to and including that period].

[F53 (2A) For the purposes of subsection (2) above the total amount of advance petroleum revenue tax paid by the participator does not include any amount of that tax repaid to him before the end of the chargeable period first referred to in that subsection or any amount of that tax subsequently repaid to him under section 142(1) of the Finance Act 1982 or under paragraph 9 of Schedule 19 to that Act.]

(3) In determining for the purposes of subsection (2) above whether any, and if so what, assessable profit or allowable loss has accrued to a participator from an oil field in a chargeable period—

(a) there shall be excluded from its computation any expenditure allowed under Schedule 7 and any loss allowed under Schedule 8 to the principal Act [F54 (abortive exploration expenditure [F55 exploration and appraisal expenditure] and unrelievable field losses);]

(b) any election under paragraph 9(1) of Schedule 3 to that Act (spreading of allowable expenditure) shall be disregarded; and

(c) in the case of the last chargeable period taken into account in deciding what is the net profit period there shall be included in that computation any amount which, by reason of an adjustment under section 4(9) of that Act (long-term assets) for a claim period ending not later than that period, will fall to be taken into account under paragraph 6 of Schedule 4 to that Act for the next chargeable period [F56 and

(d) if any qualifying tariff receipts, within the meaning of section 9 of the Oil Taxation Act 1983, are received or receivable by the participator for that period, any amount by which those receipts are treated as reduced by virtue of that section shall be brought into account in that computation as an addition to the positive amounts referred to in section 2(3)(a) of the principal Act].

(4) A net profit shall not by virtue of subsection (2) above be treated as having accrued to a participator from an oil field in a chargeable period if—

(a) after an assessment or determination has been made in respect of that period under paragraph 10 of Schedule 2 to the principal Act any expenditure incurred before the end period is allowed on a claim under Schedule 5 or Schedule 6 to that Act; and

(b) a net profit would not have accrued to the participator from the field in that period if that expenditure (or, as respects expenditure allowed under Schedule 5, his share of it) had been taken into account in the assessment or determination together with any amount falling to be taken into account under section 2(9)(b)(ii) or (c)(ii) of the principal Act by reference to (or, as the case may be, to his share of) that expenditure.

(5) The expenditure referred to in subsection (4) above does not include expenditure allowed for any claim period beginning after the chargeable period in respect of which the assessment or determination was made.

(6) In the following provisions, that is to say—

(a) paragraphs 2(4)(a) and 3(1)(b) of Schedule 5 to the principal Act (claims for and determination of expenditure qualifying for supplement), including those paragraphs as applied by Schedule 6 to that Act;

(b) paragraph 2(4)(b) of the Schedule to the M40 Petroleum Revenue Tax Act 1980 (computation of payment on account),

references to expenditure qualifying for supplement shall include references to expenditure that would so qualify apart from this section; but the responsible person need not make a claim under paragraph 2(4)(a) of the said Schedule 5 if it appears to him that none of the expenditure is likely to qualify because of this section.

(7) This section applies whether the net profit period ends before or after the passing of this Act but subsection (1) above shall not disqualify any expenditure which was incurred before 1st January 1981 or which is incurred before 1st January 1983 in pursuance of a contract entered into before 1st January 1981.

Textual Amendments

F51 Words substituted by Finance Act 1985 (c. 54), s. 91(3) with respect to chargeable periods ending after 30 June 1985. Previously “in which a net profit from the field first accrues to the participator.”

F52 Words substituted by Finance Act 1982 (c. 39), s. 139(6), Sch. 19 para. 16(2). Previously “exceed the total allowable losses that have so accrued to him”

F53 S. 111(2A) substituted by Finance Act 1982 (c. 39), s. 139(6), Sch. 19 para. 16(2). Previously “exceed the total allowable losses that have so accrued to him”

F54 Words repealed by Finance Act 1987 (c. 16), ss. 64(2), 72(7), Sch. 13 Pt. II para. 8, Sch. 16 Pt. X

F55 Words added by Finance Act 1983 (c. 28), s. 37(2), Sch. 8 Pt. II para. 9

F56 Word “and” and s. 111(3)(d) inserted by Oil Taxation Act 1983 (c. 56), s. 9(8)—to have effect with respect to chargeable periods ending after 1 July 1982

Modifications etc. (not altering text)

C14 See 1987 s. 65(4)(c)—exclusion of coss-field allowance in determining assessable profit or allowable loss for s. 111(2)

C15 See s. 117(4), post—includes an election under 1981 s. 117

C16 See Oil Taxation Act 1983 (c. 56), Sch. 1 para. 2(4) where expenditure incurred in respect of a remote associated asset

Marginal Citations

M39 1975 c. 22.

M40 1980 c. 1.

112 Restriction of expenditure supplement: transfers of interest. U.K.

(1) Section 111 above shall have effect in accordance with this section where a participator in an oil field has acquired the whole or part of his interest in the field as a result of one or more transfers to him within the meaning of Schedule 17 to the M41 Finance Act 1980, and in this section “the new participator and the “the old participator” mean respectively the first-mentioned participator and any participator from whom he has acquired the whole or part of his interest.

(2) The new participator’s net profit period shall be whichever is the earlier of—

(a) his own net profit period as determined in accordance with section 111 above and subsections (3) and (4) below; or

(b) subject to subsection (5) below, the chargeable period which is the net profit period of the old participator or, if there are two or more old participators, of whichever of them has the earliest net profit period.

(3) Where the old participator has transferred the whole of his interest in the field to the new participator, the net profit period of the new participator shall be determined by treating as if they were his the total assessable profits and allowable losses of the old participator as determined for the purposes of section 111 above.

(4) Where the old participator has transferred part of his interest in the field to the new participator, the net profit period of the old and new participators shall be determined by treating as if they were the new participator’s and not the old participator’s such part of the total assessable profits and allowable losses of the old participator (as determined for the purposes of section 111 above) as may be just and reasonable.

[F57 (4A) Subsections (2) and (2A) of section 111 shall have effect as if references to the amount of advance petroleum revenue tax paid by the new participator or repaid to him included references to the amount of that tax paid by or repaid to the old participator or, where the old participator has transferred part of his interest, such part of that amount as is just and reasonable.]

(5) The net profit period of an old participator shall not be taken into account under subsection (2)(b) above if the new participator’s own net profit period, as determined without reference under subsection (3) or (4) above to the old participator’s assessable profits or allowable losses, fell before the chargeable period in which the new participator acquired the whole or part of the old participator’s interest.

Textual Amendments

F57 S. 112(4A) inserted by Finance Act 1982 (c. 39), s. 139(6), Sch. 19 para. 16(3)

Marginal Citations

M41 1980 c. 48.

113 Restriction of expenditure supplement: loss following net profit period. U.K.

[F58 (1) This section has effect where the aggregate of—

(a) the total allowable losses that have accrued to a participator from an oil field in chargeable periods up to and including a chargeable period ending not more than three years after his net profit period, and

(b) the amount of advance petroleum revenue tax paid by him in respect of that field for those periods less any such tax repaid to him before the end of those periods or repaid subsequently under section 142(1) of the Finance Act 1982 or paragraph 9 of Schedule 19 to that Act,

exceeds the total assessable profits (without any reduction under section 7 or 8 of the principal Act) that have so accrued to him.]

(2) Section 111(1) above shall not disqualify for supplement under section 2(9)(b)(ii) or (c)(ii) of the principal Act expenditure which is incurred up to the end of—

(a) the last chargeable period in the three years mentioned in subsection (1) above; or

(b) the chargeable period in which a net profit next accrues to the participator from the field after the chargeable period mentioned in that subsection,

whichever is the earlier.

(3) Subsection (3) of section 111 above shall apply for the purposes of subsection (1) above as it applies for the purposes of subsection (2) of that section and subsections (3), (4) and (5) of that section shall apply for the purposes of subsection (2)(b) above as they apply for the purposes of subsection (2) of that section.

Textual Amendments

F58 S. 113(1) substituted by Finance Act 1982 (c. 39), s. 139(6), Sch. 19 para. 16(4). Previously “(1) This section has effect where the total allowable losses that have accrued to a participator from an oil field in chargeable periods up to and including a chargeable period ending not more than three years after his net profit period exceed the total assessable profits (without any reduction under section 7 or 8 of the principal Act) that have so accrued to him.”

X14 114 Restriction of limit on amount of tax payable. U.K.

(1) For section 9 of the principal Act (annual limit on amount of tax payable by participator) there shall be substituted—

“9 (1) The tax payable by a participator in an oil field for any chargeable period to which this subsection applies shall not exceed 80 per cent. of the amount (if any) by which his adjusted profit for that period (as defined in this section) exceeds 15 per cent. of his accumulated capital expenditure at the end of that period (as so defined).

(1A) Subsection (1) above applies to—

(a) any chargeable period from the first chargeable period up to and including the period which is the participator’s net profit period for the field for the purposes of section 111 of the Finance Act 1981 or where section 113 of that Act applies, up to and including the earlier of the periods mentioned in subsection (2) of that section; and

(b) any subsequent chargeable period up to such number of periods as is equal to half the number of chargeable periods included in paragraph (a) above (counting any resulting fraction of a period as a whole period).

(2) The adjusted profit of a participator in an oil field for any chargeable period shall be determined as follows—

(a) there shall be ascertained—

(i) the assessable profit (without any reduction under section 7 or 8 of this Act) or allowable loss accruing to him in that period; and

(ii) the total amount taken into account under section 2(9)(b), (c), (d) and (e) of this Act in computing that profit or loss, excluding expenditure so taken into account under section 2(9)(b)(i) or (c)(i) which was not allowed as qualifying for supplement under section 2(9)(b)(ii) or (c)(ii);

(b) if there is a profit under paragraph (a)(i) above, the sum of that profit and the total ascertained under paragraph (a)(ii) above is his adjusted profit for the period;

(c) if there is a 1oss under paragraph (a)(i) above smaller than the total ascertained under paragraph (a)(ii) above, the difference is his adjusted profit for the period.

(3) The accumulated capital expenditure of a participator in an oil field at the end of any chargeable period is the total amount of expenditure taken into account under section 2(9)(b)(i) and (c)(i) of this Act in computing the assessable profit or allowable loss accruing to him in that period and all earlier chargeable periods excluding all expenditure so taken into account which was not allowed as qualifying for supplement under section 2(9)(b)(ii) or (c)(ii).

(4) Where a participator has made an election under paragraph 9(1) of Schedule 3 to this Act the amount of any reduction by virtue of this section in the tax payable by him for any chargeable period shall not be greater than it would have been if he had not made any such election and for the purposes of subsection (3) above his accumulated capital expenditure at the end of any chargeable period shall be taken to be what it would have been if he had made no such election.”

(2) In consequence of subsection (1) above, Schedule 17 to the M42 Finance Act 1980 (transfers of interests in oil fields) shall be amended as follows—

(a) in paragraph 1(3) for the words from “the transfer period” onwards there shall be substituted the words “ “the transfer period” means the chargeable period in which the transfer takes place ”;

(b) in paragraph 8(1) for the words from “the last calendar year” onwards there shall be substituted “ the last chargeable period before the transfer period ”;

(c) in paragraph 8(2) for the words “year” (in both places) and “calendar years” there shall be substituted respectively the words “ period ” and “ chargeable periods ”;

(d) in paragraph 18 for the word “year”, wherever it occurs, there shall be substituted the word “ period ”.

(3) This section applies whether the net profit period ends before or after the passing of this Act.

Editorial Information

X14 The text of part of ss. 89, 90, 91, 114, 116, 119 is in the form in which it was originally enacted: it was not reproduced in Satutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

Marginal Citations

M42 1980 c. 48.

115 Contracts with deferred payment. U.K.

(1) Expenditure incurred in pursuance of a contract to which this section applies shall not qualify for supplement under section 2(9)(b)(ii) or (c)(ii) of the principal Act.

(2) This section applies to any contract which is entered into after 1st July 1980 unless—

(a) the amount required to be paid under it by the person incurring the expenditure is less than £10 million; or

(b) it is reasonable to expect, at the time when the contract is entered into—

(i) that not less than 90 per cent. of that amount be paid within nine months of the date on which the other party begins to perform the contract; or

(ii) that a payment or payments in respect of that amount will be made which comply with subsection (3) below;

and for the purposes of paragraph (a) above there may be disregarded any provision of the contract allowing for variations in the amount payable to take account of changes in costs or design.

(3) The payment or payments referred to in subsection (2)(b)(ii) above must be such that the amount to be paid up to any time after the date on which the other party to the contract begins to perform it is equal to not less than 75 per cent. of the amount that would have become payable up to that time if—

(a) the payments required to be made under the contract were such that the first of them was payable within six months after that date and each subsequent one within six months after the previous one; and

(b) the first of the payments were required to be of an amount proportionate to the extent to which the contract has been performed by that party since that date and each subsequent one to be of an amount proportionate to the extent to which the contract has been so performed since the previous payment was required to be made.

(4) Where a contract requires a payment in respect of any period or in respect of the completion of any stage in the performance of the contract to be made within three months after the end of that period or within three months after the completion of that stage the amount to be paid up to any time shall be determined for the purposes of subsection (3) above as if the payment were required to be made at the end of that period or on completion of that stage.

(5) Where a contract provides for payments in respect of the completion of stages in the performance of separate parts of the work specified in the contract, the payments under the contract shall be treated as complying with subsection (3) above if the payments attributable to each part of the contract would have complied with that subsection if that part had been the subject of a separate contract.

X15 116 Spreading of capital expenditure. U.K.

(1) For paragraph 9 of Schedule 3 to the principal Act (spreading of capital expenditure) there shall be substituted—

“9 (1) A participator in an oil field may by notice in writing to the Board elect—

(a) that the relief for supplemented expenditure to be taken into account in computing the assessable profit or allowable loss accruing to him from the field in the chargeable period specified in the notice shall not exceed such amount as is so specified; and

(b) that any excess shall be dealt with in accordance with the following provisions of this paragraph.

(2) Subject to sub-paragraphs (3) and (4) below, one-twentieth of any excess of the relief over the amount specified for the chargeable period in question shall be taken into account in computing the assessable profit or allowable loss accruing to the participator from the field in each of the next twenty chargeable periods.

(3) A participator may, in the first notice given by him under sub-paragraph (1) above in respect of a field, elect that sub-paragraph (2) above shall have effect in relation to that and any subsequent notice given by him in respect of that field with the substitution for the denominator of the fraction and the number of chargeable periods of such number, being three, five, ten or fifteen, as is specified in the election.

(4) A participator may by a notice in writing given to the Board and applying to any of the chargeable periods referred to in sub-paragraph (2) above before the last elect that so much of the excess as has not been taken into account in a previous chargeable period shall be taken into account in the period specified in the notice instead of partly in that period and partly in the subsequent periods.

(5) Any notice under this paragraph shall be in such form as the Board may prescribe and shall be given within three months after the end of the chargeable period to which it relates or, if later, twenty-seven months after the end of the first chargeable period of the field.

(6) Any tax charged or repayable in respect of the first four chargeable periods of an oil field in consequence of an election under this paragraph shall not carry interest under paragraph 15 or 16 of Schedule 2 to this Act in respect of any period before the date of the election.

(7) In this paragraph “relief for supplemental expenditure” means the amount attributable to expenditure qualifying for supplement under paragraph (b)(ii) or (c)(ii) of section 2(9) of this Act which would, apart from any election under this paragraph, fall to be taken into account under paragraph (b) or (c) of section 2(9) in computing the assessable profit or allowable loss accruing to the participator from the field in the chargeable period in question; and the reference in this sub-paragraph to the amount attributable to expenditure qualifying for supplement as aforesaid includes the amount attributable to the expenditure itself as well as to the amount calculated by reference to it under the said paragraph (b)(ii) or (c)(ii).”

(2) For paragraph 10 of Schedule 3 to the principal Act there shall be substituted—

“10 Where a participator has made an election under paragraph 9(1) above the reduction to be made in his case under section 8(1) of this Act for any chargeable period (whether or not that to which the election relates) shall not be greater than it would have been if he had made no such election.”

(3) This section has effect in relation to any chargeable period ending after 31st December 1979.

Editorial Information

X15 The text of part of ss. 89, 90, 91, 114, 116, 119 is in the form in which it was originally enacted: it was not reproduced in Satutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

117 Spreading of capital expenditure: transitional provisions. U.K.

(1) Where allowable losses have accrued to a participator from an oil field in chargeable periods ending before 1st January 1980 he may by notice in writing given to the Board elect that so much of those losses as would, apart from this section, be available for set off under section 7 of the principal Act against assessable profits accruing to him from the field in chargeable periods beginning on or after that date shall instead be treated as an amount of relief for supplemented expenditure which, subject to any election under paragraph 9 of Schedule 3 to that Act, falls to be taken into account in computing the assessable profit or allowable loss accruing to him from the field in the chargeable period ending on 30th June 1980.

(2) The amount to which an election under this section applies shall not exceed the total amount of relief for supplemented expenditure taken into account in computing the assessable profits or allowable losses accruing to the participator in chargeable periods ending before 1st January 1980.

(3) Any notice under this section shall be in such form as the Board may prescribe and shall be given before 1st April 1982; and—

(a) any notice under paragraph 9 of Schedule 3 to the principal Act in respect of a chargeable period ending before that date shall not be out of time if given before that date;

(b) any tax charged or repayable in respect of any such chargeable period in consequence of an election under that paragraph shall not carry interest under paragraph 15 or 16 of Schedule 2 to that Act in respect of any period before the date of the election.

(4) In section 111(3)(b) above and in section 9(4) of, and paragraph 10 of Schedule 3 to, the principal Act references to an election under paragraph 9(1) of that Schedule shall include references to an election under this section.

(5) This section shall be construed as one with Part I of the principal Act and paragraph 9(7) of Schedule 3 to that Act shall apply for the interpretation of subsections (1) and (2) above.

118 Licence payments other than royalties. U.K.

(1) For the purpose of computing under section 2 of the principal Act the assessable profit or allowable loss accruing to a participator in any chargeable period from an oil field—

(a) there shall be included as a positive amount any chargeable sum paid to the participator in the period by the Secretary of State; and

(b) there shall be included as a negative amount any allowable sum paid by the participator in the period to the Secretary of State.

(2) In this section “chargeable sum” and “allowable sum” mean any sum which after 31st December 1980 is paid to a participator by the Secretary of State or, as the case may be, by the participator to the Secretary of State by reference to a relevant licence except—

(a) any sum falling to be taken into account under section 2(6) of the principal Act (licence debit or credit) or section 3(1)(b) of that Act (payment under or for the purpose of obtaining a relevant licence);

(b) any sum consisting of interest on a sum payable to or by the Secretary of State;

(c) any repayment by the Secretary of State under section 41(3) of the M43 Petroleum and Submarine Pipe-lines Act 1975 (repayment of royalty for facilitating or maintaining the development of United Kingdom petroleum resources); and

(d) any payment or repayment of royalty in respect of excluded oil (as defined in section 10 of the principal Act) and any other payment attributable to such oil.

(3) Where the relevent licence by reference to which a chargeable sum or allowable sum is paid relates to a licensed area comprising the whole or part of two or more oil fields, that sum shall for the purposes of this section be apportioned between all or any of those fields, or attributed wholly to one of them, as may be just and reasonable.

(4) A return under paragraph 2 of Schedule 2 to the principal Act shall include a statement of the chargeable sums and allowable sums, if any, paid to or by the participator in the chargeable period to which the return relates.

(5) In considering for the purposes of paragraph 8(1) of Schedule 3 to the principal Act (subsidised expenditure) how far any expenditure has been or is to be met directly or indirectly by the Crown or by any authority or person other than the person incurring the expenditure, any chargeable sum shall be left out of account.

(6) This section shall be construed as one with Part I of the principal Act.

Marginal Citations

M43 1975 c. 74.

X16 119 Transportation costs for off-shore oil. U.K.

(1) In section 3(4)(c) of the principal Act (buildings and structures eligible for expenditure relief) after paragraph (iii) there shall be inserted—

“(iv) a building or structure used or to be used for transporting such oil as is mentioned in subsection (1)(f) above from the place where it is first landed in the United Kingdom to the place in the United Kingdom at which the seller in a sale at arm’s length could reasonably be expected to deliver it or, if there is more than one place at which he could reasonably be expected to deliver it, the one nearest to the place of extraction; or”.

(2) This section shall have effect in relation to any expenditure in respect of which a claim is made after 31st December 1978.

Editorial Information

X16 The text of part of ss. 89, 90, 91, 114, 116, 119 is in the form in which it was originally enacted: it was not reproduced in Satutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

120 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F59 U.K.

Textual Amendments

F59 Repealed by Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 31. See 1987 edition for these provisions.

121 Gas banking schemes. U.K.

Regulation under section 108 of the M44 Finance Act 1980 (gas banking schemes) may provide for the modifications made by them to have effect from a date before the regulations are made and for any election made under that section to have effect from a date before the election is made.

Marginal Citations

M44 1980 c. 48.

[F60 Part VIII U.K. Supplementary Petroleum Duty

Textual Amendments

F60 Part VIII (ss. 122–128) repealed by Finance Act 1982 (c. 39), s. 157(6), Sch. 22 Pt. IX for chargeable periods ending after 31 December 1982.

122 Charge of supplementary petroleum duty. U.K.

(1) Every participator in an oilfield shall, in accordance with this Part of this Act, be chargeable with a tax (to be known as supplementary petroleum duty) on the gross profit accruing to him from the field in any chargeable period to which this section applies.

(2) The duty shall be charged at the rate of 20 per cent.

(3) For the purposes of the duty the gross profit shall, except so far as otherwise provided in this Part of this Act, be determined in accordance with section [F61 2(4) to (5A)] of the Oil Taxation Act 1975 (“the principal Act”) as for the purposes of petroleum revenue tax.

(4) Any other expression used in this Part of this Act which also occurs in Part I of the principal Act shall be construed in the same way as for the purposes of that tax.

(5) This section applies to the chargeable periods ending on 30th June 1981, 31st December 1981, [F62 30th June 1982, and 31st December 1982 and to no other periods].

Textual Amendments

F61 Words substituted by Finance Act 1982 (c. 39), s. 133(2) for chargeable periods ending after 31 December 1981. Originally “2(4) and (5)”

F62 Words substituted by Finance Act 1982 (c. 39), s. 132(2). Originally “and 30th June 1982”.

Modifications etc. (not altering text)

C17 See Finance Act 1982 (c. 39), s. 135—in relation to determination of oil fields under Oil Taxation Act 1975 Sch. 1 made after 31 December 1981, Part VIII to apply to oil won before the date of determination.

123 Increase of gross profit by reference to royalties in kind. U.K.

(1) This section applies where part of a participator’s share of the oil won and saved from an oil field is delivered by him in a chargeable period to the Secretary of State pursuant to a requirement imposed under the terms of a licence granted under the Petroleum (Production) Act 1934.

(2) In determining for the purposes of the duty the gross profit accruing to the participator from the field in the chargeable period the aggregate of the amounts mentioned in section 2(5)(a), (b) and (c) of the principal Act shall be increased by multiplying it by a fraction of which—

(a) the numerator is the total of the quantity of oil won from the field which is delivered or relevantly appropriated by him in the period including the oil delivered to the Secretary of State; and

(b) the denominator is that total excluding the oil delivered to the Secretary of State.

(3) Where oil is delivered pursuant to a requirement which relates to oil of one or more kinds but not to others, subsection (2) above shall apply only in relation to oil of the kind or kinds to which the requirement relates; and where oil is delivered pursuant to a requirement which specifies different proportions in relation to different kinds of oil, that subsection shall apply separately in relation to each of those kinds.

(4) For the purposes of section 2(5) of the principal Act as applied by this Part of this Act the exclusion by paragraph 4 of Schedule 3 to that Act of oil delivered to the Secretary of State under the terms of a licence granted under the said Act of 1934 shall be deemed to extend to oil which is inadvertently delivered to him in excess of the amount required; and oil so delivered shall be treated for the purposes of this section as delivered pursuant to a requirement imposed under the terms of such a licence.

124 Reduction of gross profit by reference to exempt allowance. U.K.

(1) For the purposes of the duty there shall be for each oilfield in each chargeable period an exempt allowance of 500,000 metric tonnes of oil divided between the participators in shares proportionate to their shares of the oil won and saved from the field during the period.

(2) If the gross profit accruing to a participtor in a chargeable period from a field exceeds the cash equivalent of his share of the exempt allowance, the gross profit shall be reduced to an amount equal to the excess.

(3) If the gross profit accruing to a participator in a chargeable period from a field does not exceed the cash equivalent of his share of the exempt allowance, the gross profit shall be reduced to nil.

(4) Subject to subsection (5) below, the cash equivalent of a participator’s share of the exempt allowance for an oil field for a chargeable period shall be equal to such proportion of the gross profit accruing to him from the field in that period (before any reduction under this section) as his share of the exempt allowance bears to his share, exclusive of excluded oil within the meaning of section 10 of the principal Act, of the oil won and saved from the field during the period.

(5) If a participator in an oil field so elects by notice in writing given to the Board at the time when he makes his return under paragraph 2 of Schedule 2 to the principal Act for a chargeable period, the cash equivalent of his share of the exempt allowance for the field for that period shall be determined under subsection (4) above—

(a) to the extent that his share of that exempt allowance does not exceed his share of the oil (other than gas) won and saved from the field in the period, as if in computing the gross profit accruing to him in the period all amounts relating to gas fell to be disregarded; and

(b) to the extent, if any, that his share of that allowance exceeds his share of the oil (other than gas) so won and saved, as if in computing the gross profit so accruing all amounts relating to oil other than gas fell to be disregarded.

(6) In this section references to a participator’s share of the oil won and saved from a field are to his share as expressed in metric tonnes and for that purpose 1,100 cubic metres of oil consisting of gas at a temperature of 15 degrees centigrade and pressure of one atmosphere shall be counted as equivalent to one metric tonne of oil other than gas.

125 Repayment of duty in case of field showing loss on cessation. U.K.

(1) Subject to the provisions of this section, the duty paid by a participator in respect of an oil field shall be repaid to him if—

(a) a decision has been made under Schedule 8 to the principal Act (whether by the Board or on appeal) that the winning of oil from the field has permanently ceased;

(b) an unrelievable field loss, within the meaning of section 6 of that Act, has accrued to the participator from the field; and

(c) a claim for repayment is made under this section.

(2) The amount of duty to be repaid shall not exceed the amount of the unrelievable field loss; and where duty paid by a participator in respect of an oil field is repaid under this section the amount to be taken into account under section 2(9)(e) of the principal Act as the unrelievable field loss from that field in computing the assessable profit or allowable loss accruing from another field to—

(a) the participator; or

(b) a company which, within the meaning of the said section 6, is associated with him in respect of the loss,

shall not be greater than the amount (if any) by which it exceeds the amount repaid.

(3) If a claim for the allowance of the unrelievable field loss is made by the participator under Schedule 8 to the principal Act, the claim under this section shall be included in that claim; and in any other case the claim under this section shall be made within six years after the date of the decision mentioned in subsection (1)(a) above.

(4) Sub-paragraphs (2) and (3) of paragraph 4 of the said Schedule 8 shall, with the necessary modifications, apply in relation to a claim for repayment under this section as they apply in relation to a claim under sub-paragraph (1) of that paragraph.

(5) References in this section to duty paid by a participator are to duty paid by him and not previously repaid.

126 Deduction of duty in computing assessable profit or allowable loss for petroleum revenue tax. U.K.

(1) For the purpose of computing under section 2 of the principal Act the assessable profit or allowable loss accruing to a participator in any chargeable period from an oil field—

(a) there shall be included as a negative amount his duty debit (if any) for the period; and

(b) there shall be included as a positive amount his duty credit (if any) for the period.

(2) The participator’s duty debit or credit (if any) for the period is the difference (if any) between—

(a) the sum of the amounts mentioned in subsection (3) below; and

(b) the sum of—

(i) the amount taken into account under paragraph (a) of that subsection in computing his duty debit or credit for the preceding chargeable period; and

(ii) the amount of any duty repaid to him in the period in respect of the field;

and their difference (if any) is a duty debit if the sum mentioned in paragraph (a) above is greater than the sum mentioned in paragraph (b) above, and is otherwise a duty credit.

(3) The amounts referred to in subsection (2)(a) above are—

(a) the amount shown in the statement delivered by the participator under sub-paragraph (1)(a) of paragraph 10 of Schedule 16 to this Act as the duty payable by him under that paragraph for the period in respect of the field; and

(b) the amount of duty paid in the period in respect of the field for previous chargeable periods.

(4) For the purposes of subsection (3)(b) above duty for a period which is paid before the end of that period shall be treated as paid in the next chargeable period.

(5) Where a participator’s liability to petroleum revenue tax has been determined by reference to an amount of duty paid by him and there is a repayment of the duty which cannot be taken into account under the foregoing provisions of this section, an additional assessment to that tax may be made at any time not later than six years after the end of the chargeable period in which the duly is repaid.

(6) Paragraph 12 of Schedule 17 to the Finance Act 1980 (treatment of royalty payments where there is a transfer of an interest in an oil field) shall apply in relation to any duty debit or credit as it applies in relation to a licence debit or credit, taking references to subsection (6) of section 2 of the principal Act and paragraphs (a) and (b) of that subsection as references to subsection (2) above and paragraphs (a) and (b) of that subsection.

127 Deduction of duty in computing income for corporation tax. U.K.

(1) Where a participator in an oilfield has paid any duty with which he was chargeable for a chargeable period, then, in computing for corporation tax the amount of his income arising in the relevant accounting period from oil extraction activities or oil rights, there shall be deducted an amount equal to that duty; and there shall be made all such adjustments of assessments to corporation tax as are required in order to give effect to this subsection.

(2) For the Purposes of subsection (1) above the relevant accounting period, in relation to any duty paid by a company, is—

(a) the accounting period of the company in or at the end of which the chargeable period for which the duty was charged ends; or

(b) if that chargeable period ends after the accounting period of the company in or at the end of which the trade giving rise to the income referred to in subsection (1) above is permanently discontinued, that accounting period.

(3) Subject to subsection (4) below, if some or all of the duty in respect of which a deduction has been made under subsection (1) above is subsequently repaid, that deduction shall be reduced or extinguished accordingly; and any additional assessment to corporation tax required in order to give effect to this subsection may be made at any time not later than six years after the end of the accounting period in which the duty was repaid.

(4) Subsection (3) above does not apply to any repayment of duty under section 125 above but any amount of duty repaid to a person under that section shall be treated as his income for the purpose of corporation tax.

(5) Where, because of a deduction made under subsection (1) above in computing for corporation tax the amount of a company’s income of any kind, the amount of advance corporation tax which can be set against the company’s liability to corporation tax for an accounting period is less than the amount of advance corporation tax which could have been set against that liability if the deduction had not been made, then, if a claim in that behalf is made by the company not later than two years after the end of that accounting period, an amount of advance corporation tax equal to the difference shall be repaid to the company.

(6) In this section “oil extraction activities” and “oil rights” have the meaning given in section 19(1) of the principal Act.

Modifications etc. (not altering text)

C18 See Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), s. 498(8)—in determining the amount of any advance corporation tax (“ACT”) repayable under s. 172(5) any Act in respect of distribution actually made on or after 17 March 1987 shall be left out of account.

128 Supplementary Provisions. U.K.

(1) Schedule 16 to this Act shall have effect with respect to the management and collection of duty.

(2) In section 1(1) of the Provisional Collection of Taxes Act 1968 after the words “petroleum revenue tax” there shall be inserted the words “ supplementary petroleum duty ”.

(3) This Part of this Act shall be included in the Oil Taxation Acts for the purposes of section 108 of the Finance Act 1980 (gas banking schemes).]

Modifications etc. (not altering text)

C19 See Part II, post.

Part IX U.K.

129—133. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F63 U.K.

Textual Amendments

F63 Ss. 129–133 repealed by Finance Act 1985 (c. 54), s. 98(6), Sch. 27 Pt. X Note 2

Part X U.K. Miscellaneous and Supplementary

X17 134 Special tax on banking deposits. U.K.

(1) Every person who on 10th March 1981 was carrying on a banking business in the United Kingdom shall be chargeable for the year beginning on 1st April 1981 with a tax (to be known as the special tax on banking deposits) if the average chargeable deposits held by him in the base period exceeded £15 million.

(2) The amount of tax chargeable in the case of any person shall be equal to 2 per cent. of the excess referred to in subsection (1) above or, if the excess is more than £200 million, the aggregate of 2 per cent. of the first £200 million and 2½ per cent. of the remainder.

(3) Part I of Schedule 17 to this Act shall have effect for determining the base period and the chargeable deposits held by a person in that period; and Part II of that Schedule shall have effect with respect to the management and collection of the tax.

(4) The tax paid by a person shall not be deductible in computing his income, profits or losses for the purposes of income tax or corporation tax.

(5) In this section and Schedule 17 references to a person carrying on a banking business do not include references to the Bank of England or the central bank of any country outside the United Kingdom.

Editorial Information

X17 The text of s. 134 is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

135 Chevening Estate. U.K.

(1) The enactments relating to capital gains tax [F64 and capital transfer tax] shall not apply in respect of property held on the trusts of the trust instrument set out in the M45 Schedule to Chevening Estate Act 1959.

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

Textual Amendments

F64 Words substituted by Finance Act 1985 (c. 54), s. 93(7), Sch. 25 para. 10

Marginal Citations

M45 1959 c. 49.

136 Exchange control. U.K.

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F65

(2) In section 2(1) of the M46 Banking and Financial Dealings Act 1971 (power to suspend financial dealings)—

(a) in paragraph (b) for the words “no authorised dealer in foreign currency”, and

(b) in paragraph (c) for the words “no authorised dealer in gold”,

there shall be substituted the words “ no person ”.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F65

Textual Amendments

F65 S. 136(1)(3) repealed by Finance Act 1987 (c. 16, SIF 99:6), s. 72(7), Sch. 16 Pt. XI

Modifications etc. (not altering text)

C20 The text of s. 136(2) is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

Marginal Citations

M46 1971 c. 80

137 Irish land Acts. U.K.

(1) Any sums required to be paid under—

(a) section 47(2) of the M47 Irish Land Act 1903 (sums required for paying dividends on and redeeming guaranteed stock) ; or

(b) section 26(2) of the M48 Government of Ireland Act 1920 (sums equal to amounts payable in respect of purchase annuities),

shall, instead of being paid out of moneys provided by Parliament, be paid out of the Consolidated Fund.

(2) So much of section 33 of the said Act of 1903 as requires the accounts of the Irish Land Purchase Fund to be laid before Parliament shall cease to have effect but the National Debt Commissioners shall furnish the Treasury with such information relating to those accounts as the Treasury may require.

(3) Any sums required to be paid under subsection (7) of section 16 of the M49 National Loans Act 1968 in respect of the management of securities issued under the M50 Northern Ireland Land Act 1925 shall be met out of the National Loans Fund with recourse to the Consolidated Fund.

(4) This section shall come into force on 1st April 1982.

Marginal Citations

M47 1903 c. 37.

M48 1920 c. 67.

M49 1968 c. 13.

M50 1925 c. 34.

138 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F66 U.K.

Textual Amendments

F66 S. 138 repealed by Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 31

139 Short title, interpretation, construction and repeals. U.K.

(1) This Act may be cited as the Finance Act 1981.

(2) In this Act “the Taxes Act” means the Income and Corporation Taxes Act [F67 1988].

(3) Part IV of this Act, so far as it relates to income tax, shall be construed as one with the Income Tax Acts, so far as it relates to corporation tax, shall be construed as one with the Corporation Tax Acts and, so far as it relates to capital gains tax, shall be construed as one with the M51 Capital Gains Tax Act 1979.

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F68

(5) In Parts VII and VIII of this Act “ the principal Act” means the M52 Oil Taxation Act 1975.

(6) The enactments mentioned in Schedule 19 to this Act are hereby repealed to the extent specified in the third column of that Schedule, but subject to any provision at the end of any Part of that Schedule.

Textual Amendments

F67 Word substituted by Income and Corporation Taxes Act 1988 (c. 1), Sch. 29 para. 32

F68 S. 139(4) repealed by Capital Transfer Tax Act 1984 (c. 51), ss. 274, 277, Schs. 7, 9

Marginal Citations

M51 1979 c. 14.

M52 1975 c. 22.