Finance Act 1984

Part I U.K. Customs and Excise, Value Added Tax and Car Tax

Chapter I U.K. Customs and Excise

1 Duties on spirits, beer, wine, made-wine and cider. U.K.

(1) In section 5 of the M1 Alcoholic Liquor Duties Act 1979 (excise duty on spirits) for “£15.19" there shall be substituted “ £ 15.48 ”.

(2) In section 36 of that Act (excise duty on beer) for “£21.60" and “£0.72" there shall be substituted “ £24.00 ” and “ £0.80 ” respectively.

(3) For the provisions of Schedule 1 to that Act (rates of excise duty on wine) there shall be substituted the provisions of Schedule 1 to this Act.

(4) The rates of duty on made-wine shall be the same as those on wine and, accordingly, in section 55(1) of that Act for the words “ Schedule 2" there shall be substituted the words “ Schedule 1 ”.

(5) In section 62(1) of that Act (excise duty on cider) for “£9.69" there shall be substituted “ £14.28 ” and in the definition of “cider" in section 1(6) of that Act for the words “less than 8.7 per cent" there shall be substituted the words “ less than 8.5 per cent. ”.

(6) This section, and Schedule 1 to this Act, other than the paragraphs headed “Interpretation", shall be deemed to have come into force on 14th March 1984.

Marginal Citations

M1 1979 c. 4.

2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F1 U.K.

Textual Amendments

F1 S. 2 repealed by Finance Act 1985 (c. 54), s. 98(6), Sch. 27 Pt. I

3 Hydrocarbon oil. U.K.

(1) In section 6(1) of the M2 Hydrocarbon Oil Duties Act 1979 (rates of duty on hydrocarbon oil) for “£0.1630" (light oil) and “£0.1382" (heavy oil) there shall be substituted “ £0.1716 ” and “ £0.1448 ” respectively.

(2) In section 11(1)(a) of that Act (rebate on kerosene, other than aviation turbine fuel) for the words “of £0.0022 a litre less than" there shall be substituted the words “ equal to ”.

(3) This section shall be deemed to have come into force at 6’oclock in the evening of 13th March 1984.

Marginal Citations

M2 1979 c. 5.

4 Vehicles excise duty. U.K.

(1) The M3 Vehicles (Excise) Act 1971 and the M4 Vehicles (Excise) Act (Northern Ireland) 1972 shall be amended as follows.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F2

(3) The provisions of Part I of Schedule 4 to each of those Acts (annual rates of duty on goods vehicles: general provisions) shall have effect subject to the amendments made by Part II of Schedule 2 to this Act.

(4) In section 16 of the Act of 1971 (rates of duty for trade licences)—

(a) in subsection (5), including that subsection as set out in paragraph 12 of Part I of Schedule 7 to that Act, for . . . F3 “£8·50" there shall be substituted . . . F3 “£9"; and

(b) in subsection (8) the following definition shall be inserted at the appropriate place—

• ““disabled vehicle” includes a vehicle which has been abandoned or is scrap;”.

(5) In section 16 of the Act of 1972 (rates of duty for trade licences)—

(a) in subsection (6), including that subsection as set out in paragraph 12 of Part I of Schedule 9 to that Act, for . . . F3 “£8·50" there shall be substituted . . . F3 “£9"; and

(b) in subsection (10) the following definition shall be inserted at the appropriate place—

• ““disabled vehicle” includes a vehicle which has been abandoned or is scrap;”.

(6) The provisions of this section other than subsections (4)(b) and (5)(b) apply in relation to licences taken out after 13th March 1984.

Textual Amendments

F2 S. 4(2) repealed by Finance Act 1985 (c. 54), s. 98(6), Sch. 27 Pt. II

F3 Words repealed by Finance Act 1985 (c. 54), s. 98(6), Sch. 27 Pt. II

Marginal Citations

M3 1971 c. 10.

M4 1972 c. 10 (N.I.).

5 Vehicles excise duty: recipients of mobility supplement. U.K.

(1) Section 7 of the Vehicles (Excise) Act 1971 and section 7 of the Vehicles (Excise) Act (Northern Ireland) 1972 (exemption from vehicles excise duty) shall have effect with the following amendments.

(2) In subsection (2) of that section of each Act (by virtue of which vehicles used by or for the purposes of persons in receipt of a mobility allowance are exempt from duty and vehicles are deemed to be registered in the names of such persons in certain circumstances)—

(a) after the words “mobility allowance", in both places, there shall be inserted the words “or a mobility supplement"; and

(b) for the words from “a person appointed" to “powers" and the words “a person so appointed" there shall in each case be substituted the words “an appointee".

(3) After subsection (2) of section 7 of the 1971 Act there shall be inserted—

“(2A) In subsection (2) above—

• “mobility supplement” means a mobility supplement under—

  (a)

  a scheme made under the Personal Injuries (Emergency Provisions) Act 1939, or

  (b)

  an Order in Council made under section 12 of the Social Security (Miscellaneous Provisions) Act 1977,

  or any payment appearing to the Secretary of State to be of a similar kind and specified by him by order made by statutory instrument; and

• “appointee” means—

  (i)

  a person appointed pursuant to regulations under the Social Security Act 1975 to exercise any of the rights or powers of a person in receipt of a mobility allowance, or

  (ii)

  a person to whom a mobility supplement is paid for application for the benefit of another person in receipt of the supplement.

(2B) An order under subsection (2A) above may provide that it shall be deemed to have come into force on any date after 20th November 1983.”.

(4) After subsection (2A) of section 7 of the 1972 Act there shall be inserted—

“(2AA) In subsection (2)—

• “mobility supplement” means a mobility supplement under—

  (a)

  a scheme made under the Personal Injuries (Emergency Provisions) Act 1939, or

  (b)

  an Order in Council made under section 12 of the Social Security (Miscellaneous Provisions) Act 1977,

  or any payment appearing to the Secretary of State to be of a similar kind and specified by him by order made by statutory instrument; and

• “appointee” means—

  (i)

  a person appointed pursuant to regulations under the Social Security (Northern Ireland) Act 1975 to exercise any of the rights or powers of a person in receipt of a mobility allowance, or

  (ii)

  a person to whom a mobility supplement is paid for application for the benefit of another person in receipt of the supplement.

(2AB) An order under subsection (2AA) above may provide that it shall be deemed to have come into force on any date after 20th November 1983.”.

(5) This section shall be deemed to have come into force on 21st November 1983.

6 Gaming licence duty. U.K.

(1) In section 14 of the M5 Betting and Gaming Duties Act 1981 (rate of gaming licence duty), for the Table set out in subsection (1) there shall be substituted the following Table—

“ Table

Part of gross gaming yield	Rate
The first £375,000	2½ per cent.
The next £1,875,000	12½ per cent.
The next £2,250,000	25 per cent.
The remainder	33⅓ per cent.”

(2) This section shall have effect in relation to gaming licences for any period beginning after 31st March 1984.

Marginal Citations

M5 1981 c. 63.

7 Gaming machine licence duty. U.K.

(1) For the purpose of providing for gaming machine licences to be granted, in certain circumstances, in respect of gaming machines instead of in respect of premises and of providing for whole-year gaming machine licences granted in respect of premises to run from different dates in different parts of Great Britain, the Betting and Gaming Duties Act 1981 shall have effect subject to the amendments set out in Schedule 3 to this Act.

(2) The amendments made by Part I of Schedule 3 shall not have effect in relation to any licence granted for a period beginning before 1st October 1984; and the Act of 1981 shall have effect subject to Part II of Schedule 3 (which makes transitional provision in relation to certain licences first having effect after 30th September 1984 but before 1st February 1986).

8 Free zones. U.K.

The provisions set out in Part I of Schedule 4 to this Act (which provide for special areas, to be known as free zones, to be designated for customs and excise purposes) shall be inserted in the M6 Customs and Excise Management Act 1979 after Part VIII as a new Part VIIIA, and that Act shall have effect with the amendments specified in Part II of that Schedule (which also relate to free zones).

Marginal Citations

M6 1979 c. 2.

9 Entry of goods on importation. U.K.

(1) The M7 Customs and Excise Management Act 1979 shall have effect with the amendments specified in Schedule 5 to this Act, being amendments relating to the entry of goods on importation.

(2) Paragraph 1 of that Schedule shall come into force on 1st January 1985.

Marginal Citations

M7 1979 c. 2.

Chapter II U.K. Value Added Tax

10 Zero-rating. U.K.

(1) Schedule 5 to the Value Added Tax Act 1983 (zero-rating) shall have effect subject to the modifications in Schedule 6 to this Act.

(2) In Schedule 6 to this Act—

(a) Part I has effect with respect to supplies made on or after 1st May 1984; and

(b) Parts II and III have effect with respect to supplies made on or after 1st June 1984.

11 Refund of tax to Government departments etc. in certain cases. U.K.

After subsection (2) of section 27 of the Value Added Tax Act 1983 (application of value added tax legislation to the Crown) there shall be inserted the following subsections—

“(2A) Where tax is chargeable on the supply of goods or services to, or on the importation of goods by, a Government department and the supply or importation is not for the purpose—

(a) of any business carried on by the department, or

(b) of a supply by the department which, by virtue of a direction under subsection (2) above, is treated as a supply in the course or furtherance of a business,

then, if and to the extent that the Treasury so direct and subject to subsection (2B) below, the Commissioners shall, on a claim made by the department at such time and in such form and manner as the Commissioners may determine, refund to it the amount of the tax so chargeable.

(2B) The Commissioners may make the refunding of any amount due under subsection (2A) above conditional upon compliance by the claimant with requirements with respect to the keeping, preservation and production of records relating to the supply or importation in question.”

12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F4 U.K.

Textual Amendments

F4 S. 12 repealed by Finance Act 1988 (c. 39), s. 148, Sch. 14 Pt. III and expressed to be repealed (1.9.1994 with effect as mentioned in s. 101(1) of the amending Act) by 1994 c. 23, ss. 100(2), 101(1), Sch. 15 (with Sch. 13 paras. 2, 9)

13 Certain zero-rated supplies and transactions. U.K.

In section 16 of the Value Added Tax Act 1983 (zero-rating) in subsection (5) (certain supplies outside the United Kingdom and other transactions to be treated as supplies of goods or services in the United Kingdom) the words “of a supply of goods or services outside the United Kingdom or" and “supply or" shall be omitted.

Chapter III U.K. Miscellaneous

14 Reliefs from duty and value added tax in respect of imported legacies. U.K.

(1) For section 7 of the M8 Customs and Excise Duties (General Reliefs) Act 1979 (relief from customs or excise duty on imported legacies) there shall be substituted—

“7 Power to provide for reliefs from duty and value added tax in respect of imported legacies.

(1) The Commissioners may by order make provision for conferring reliefs from duty and value added tax in respect of goods imported into the United Kingdom by or for any person who has become entitled to them as legatee.

(2) Any such relief may take the form either of an exemption from payment of duty and tax or of a provision whereby the sum payable by way of duty or tax is less than it would otherwise be.

(3) The Commissioners may by order make provision supplementing any Community relief, in such manner as they think necessary or expedient.

(4) An order under this section—

(a) may make any relief for which it provides or any Community relief subject to conditions, including conditions which are to be complied with after the importation of the goods to which the relief applies;

(b) may, in relation to any relief conferred by order made under this section, contain such incidental and supplementary provisions as the Commissioners think necessary or expedient; and

(c) may make different provision for different cases.

(5) In this section—

“Community relief” means any relief which is conferred by a Community instrument and is of a kind, or of a kind similar to that, which could otherwise be conferred by order made under this section;

“duty” means customs or excise duty chargeable on goods imported into the United Kingdom and, in the case of excise duty, includes any addition to the duty by virtue of section 1 of the Excise Duties (Surcharges or Rebates) Act 1979;

“legatee” means any person taking under a testamentary disposition or donation mortis causa or on an intestacy; and

“value added tax” means value added tax chargeable on the importation of goods.”

(2) In section 17 of the M9 Customs and Excise Duties (General Reliefs) Act 1979 (parliamentary control of orders and regulations), in subsection (3), after the figure “4"there shall be inserted “ 7 ”.

(3) This section shall be deemed to have come into force on 1st July 1984.

Marginal Citations

M8 1979 c. 3.

M9 1979 c. 3.

15 Extension to certain Community reliefs of power to make supplementary provision. U.K.

(1) Section 13 of the Customs and Excise Duties (General Reliefs) Act 1979 (orders providing for personal reliefs from duties etc.) shall be amended as provided by subsections (2) to (5) below.

(2) After subsection (1) there shall be inserted the following subsection—

“(1A) The Commissioners may by order make provision supplementing any Community relief, in such manner as they think necessary or expedient.”

(3) In subsection (3)(a), after the word “provides" there shall be inserted the words “ , or any Community relief ”.

(4) In subsection (3)(b), after the word “may" there shall be inserted the words “ , in relation to any relief conferred by order made under this section, ”.

(5) In subsection (4) there shall be inserted at the appropriate place—

““Community relief” means any relief which is conferred by a Community instrument and is of a kind, or of a kind similar to that, which could otherwise be conferred by order made under this section;.”

(6) In section 17 of the M10 Customs and Excise Duties (General Reliefs) Act 1979 (parliamentary control of orders and regulations), in subsection (4), after the figure “13" there shall be inserted “ (1) ”.

(7) In the M11 Isle of Man Act 1979—

(a) in section 8 (removal of goods from Isle of Man to United Kingdom), in subsection (3), the words “ or under any Community instrument ” shall be inserted after the words “imported goods)" and the words “ or under the Community instrument in question ” shall be added at the end; and

(b) in section 9 (removal of goods from United Kingdom to Isle of Man), in subsection (5), the words “ or under any Community instrument ” shall be added at the end.

(8) This section shall be deemed to have come into force on 31st March 1984.

Marginal Citations

M10 1979 c. 3.

M11 1979 c. 58.

[F5 16 Unpaid car tax and value added tax: distress and poinding. U.K.

(1) In paragraph 3(2)(a) and (b) of Schedule 1 to the Car Tax Act 1983 and in paragraph 6(4)(a) and (b) of Schedule 7 to the Value Added Tax Act 1983 (power by regulation to make provision for distress and poinding in connection with unpaid tax) there shall be inserted, after the word “regulations" the words “ and for the imposition and recovery of costs, charges, expenses and fees in connection with anything done under the regulations ”.

(2) Regulations 58 and 59 of the Value Added Tax (General) Regulations 1980 shall, so far as they relate to costs, charges, expenses and fees in connection with any distraining or poinding occurring after the commencement of this section, have effect as if paragraph 6(4) of Schedule 7 to the Act of 1983 and this section had been in force when those regulations were made.]

Textual Amendments

F5 S. 16 repealed (S.) by Debtors (Scotland) Act 1987 (c. 18), s. 108(3), Sch. 8 (with Sch. 8 para. 5)

PART II U.K. INCOME TAX, CORPORATION TAX AND CAPITAL GAINS TAX ETC.

CHAPTER I U.K. GENERAL

17—25. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F6 U.K.

Textual Amendments

F6 Ss. 17–25 repealed by Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 31

26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F7 U.K.

Textual Amendments

F7 S. 26 repealed by Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 31

27—43. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F8 U.K.

Textual Amendments

F8 Ss. 27–43 repealed by Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 31

44 Trustee savings banks. U.K.

(1) For the purposes of sections . . . F9 272 to 281 (groups of companies) of the Taxes Act, a trustee savings bank as defined in section 54(1) of the M12 Trustee Savings Banks Act 1981 shall be deemed to be a body corporate.

(2) In section 272(2) of the Taxes Act (meaning of “company” in provisions relating to transfer of assets within a group of companies) the following shall be added at the end—

“; and

(d) a trustee savings bank as defined in section 54(1) of the Trustee Savings Banks Act 1981.”

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F10

(4) Subsection (2) above, and subsection (1) above so far as it applies to sections 272 to 281, shall be deemed to have come into force on 21st November 1982.

Textual Amendments

F9 Words repealed by Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 31

F10 S. 44(3) repealed by Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 31

Marginal Citations

M12 1981 c. 65.

45—49. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F11 U.K.

Textual Amendments

F11 Ss. 45–49 repealed by Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 31

50 Furnished holiday lettings. U.K.

(1) Schedule 11 to this Act shall have effect with respect to the treatment for the purposes of [F12 capital gains tax or corporation tax on chargeable gains] of the commercial letting of furnished holiday accommodation in the United Kingdom.

(2) For the purposes of this section a letting—

(a) is a commercial letting if it is on a commercial basis and with a view to the realisation of profits; and

(b) is of furnished accommodation if the tenant is entitled to the use of furniture.

(3) Accommodation shall not be treated as holiday accommodation for the purposes of this section unless—

(a) it is available for commercial letting to the public generally as holiday accommodation for periods which amount, in the aggregate, to not less than 140 days;

(b) the periods for which it is so let amount, in the aggregate, to at least 70 days; and

(c) for a period comprising at least seven months (which need not be continuous but includes any months in which it is let as mentioned in paragraph (b) above) it is not normally in the same occupation for a continuous period exceeding 31 days.

(4) Any question whether accommodation let by any person other than a company is, at any time in a year of assessment, holiday accommodation shall be determined—

(a) if the accommodation was not let by him as furnished accommodation in the preceding year of assessment but is so let in the following year of assessment, by reference to the 12 months beginning with the date on which he first so let it in the year of assessment;

(b) if the accommodation was let by him as furnished accommodation in the preceding year of assessment but is not so let in the following year of assessment, by reference to the 12 months ending with the date on which he ceased so to let in the year of assessment; and

(c) in any other case, by reference to the year of assessment.

(5) Any question whether accommodation let by a company is at any time in an accounting period holiday accommodation shall be determined—

(a) if the accommodation was not let by it as furnished accommodation in the period of 12 months immediately preceding the accounting period but is so let in the period of 12 months immediately following the accounting period, by reference to the 12 months beginning with the date in the accounting period on which it first so let it;

(b) if the accommodation was let by it as furnished accommodation in the period of 12 months immediately preceding the accounting period but is not so let by it in the period of 12 months immediately following the accounting period, by reference to the 12 months ending with the date in the accounting period on which it ceased so to let it; and

(c) in any other case, by reference to the period of 12 months ending with the last day of the accounting period.

(6) Where, in any year of assessment or accounting period, a person lets furnished accommodation which is treated as holiday accommodation for the purposes of this section in that year or period (“the qualifying accommodation"), he may make a claim under this subsection, within two years after that year or period, for averaging treatment to apply for that year or period to that and any other accommodation specified in the claim which was let by him as furnished accommodation during that year or period and would fall to be treated as holiday accommodation in that year or period if paragraph (b) of subsection (3) were satisfied in relation to it.

(7) Where a claim is made under subsection (6) above in respect of any year of assessment or accounting period, any such other accommodation shall be treated as being holiday accommodation in that year or period if the number of days for which the qualifying accommodation and any other such accommodation was let by the claimant as mentioned in paragraph (a) of subsection (3) above during the year or period amounts on average to at least 70.

(8) Qualifying accommodation may not be specified in more than one claim in respect of any one year of assessment or accounting period.

(9) For the purposes of this section a person lets accommodation if he permits another person to occupy it, whether or not in pursuance of a lease; and “letting" and “tenant" shall be construed accordingly.

(10) This section has effect—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F13

(b) for the purposes of capital gains tax and corporation tax on chargeable gains—

(i) in so far as it applies in relation to sections 115 to 120 of the Capital Gains Tax Act 1979, where the acquisition of, or of the interest in, the new assets takes place on or after 6th April 1982, and

(ii) otherwise, in relation to disposals made on or after that date; and

(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F13

Textual Amendments

F12 Words substituted by Income and Corporation Taxes Act 1988 (c. 1), Sch. 29 para. 32

F13 S. 50(10)(a)(c) repealed by Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 31

51—55. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F14 U.K.

Textual Amendments

F14 Ss. 51–55 repealed by Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 31

56 Certain reliefs extended to Northern Ireland housing associations and societies. U.K.

(1)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F15

(3) After section 342A of the Taxes Act there shall be inserted the following section—

“342B Disposals by Northern Ireland housing associations.

(1) In any case where—

(a) a registered Northern Ireland housing association disposes of any land to another such association, or

(b) in pursuance of a direction of the Department of the Environment for Northern Ireland given under Chapter II of Part VII of the Housing (Northern Ireland) Order 1981 requiring it to do so, a registered Northern Ireland housing association disposes of any of its property, other than land, to another such association,

both parties to the disposal shall be treated for the purposes of corporation tax in respect of chargeable gains as if the land or property disposed of were acquired from the association making the disposal for a consideration of such an amount as would secure that on the disposal neither a gain nor a loss accrued to that association.

(2) In subsection (1) above “registered Northern Ireland housing association" means a registered housing association within the meaning of Part VII of the Order referred to in paragraph (b) of that subsection.”

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . M13

Textual Amendments

F15 S. 56(1)(2) repealed by Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 31

Marginal Citations

M13 1974 c. 44. S.I. 1981/1561 (N.I. 3).

57 Proceedings in magistrates’ courts and county courts. U.K.

(1) In section 65 of the Taxes Management Act 1970 (recovery of assessed tax in magistrates’ courts)—

(a) in subsection (1) for “£50" in each place where it occurs there shall be substituted “ £250 ”;

(b) in subsection (4) for the words from “in the manner" to the end there shall be substituted the words “ in proceedings under Article 62 of the Magistrates’ Courts (Northern Ireland) Order 1981 ”; and

(c) at the end of that section there shall be added the following subsection—

“(5) The Treasury may by Order made by statutory instrument increase the sums specified in subsection (1) above; and any such statutory instrument shall be subject to annulment in pursuance of a resolution of the Commons House of Parliament.”

(2) In section 66 of that Act (recovery of assessed tax in county courts) for subsection (2) there shall be substituted the following subsection—

“(2) An officer of the Board who is authorised by the Board to do so may address the court in any proceedings under this section in a county court in England and Wales.”

CHAPTER II U.K. CAPITAL ALLOWANCES

58—62. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F16 U.K.

Textual Amendments

F16 Ss. 58–62 repealed by Capital Allowances Act 1990 (c. 1), s. 164(4), Sch. 2

CHAPTER III U.K. CAPITAL GAINS

63 Capital gains tax: small gifts, instalments and monetary limits for reliefs etc. U.K.

(1) In the Capital Gains Tax Act 1979,—

(a) section 6 (gains accruing to an individual on gifts of assets not exceeding £100 in any year not to be chargeable gains), and

(b) sections 8 and 9 (postponement of payment of tax), shall cease to have effect.

(2) In section 107 of that Act (small part disposals of land) in each of paragraphs (a) and (b) of subsection (3) (the monetary limits) for “£10,000" there shall be substituted “£20,000".

(3) In section 80 of the Finance Act 1980 (exemption for gains on letting of private residences) in subsection (1)(b) (the monetary limit) for “£10,000" there shall be substituted “£20,000".

(4) In section 124 of the Capital Gains Tax Act 1979 (relief for transfer of business on retirement) in subsection (3) (the monetary limits)—

(a) in paragraph (a) for “£50,000", there shall be substituted “£100,000"; and

(b) in paragraph (b) for “£10,000", in each place where it occurs, there shall be substituted “£20,000".

(5) Subsection (1) above has effect with respect to disposals on or after 6th April 1984 and subsections (2) to (4) above have effect with respect to disposals on or after 6th April 1983.

64 Exemption for qualifying corporate bonds. U.K.

(1) Part I of Schedule 13 to this Act shall have effect for the purpose of—

(a) providing, in relation to qualifying corporate bonds, an exemption from capital gains tax and corporation tax on chargeable gains similar to that provided in relation to gilt-edged securities by Part IV of the Capital Gains Tax Act 1979; and

(b) making corresponding amendments of other enactments.

(2) For the purposes of this section, a “corporate bond” is a security, as defined in section 82(3)(b) of the Capital Gains Tax Act 1979,—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F17

(b) the debt on which represents and has at all times represented a normal commercial loan, as defined in paragraph 1(5) of Schedule 12 to the Finance Act 1973; and

(c) which is expressed in sterling and in respect of which no provision is made for conversion into, or redemption in, a currency other than sterling.

(3) For the purposes of subsection (2)(c) above,—

(a) a security shall not be regarded as expressed in sterling if the amount of sterling falls to be determined by reference to the value at any time of any other currency or asset; and

(b) a provision for redemption in a currency other than sterling but at the rate of exchange prevailing at redemption shall be disregarded.

[F18 (3A) For the purposes of this section “corporate bond” also includes a security—

(a) which is not included in the definition in subsection (2) above, and

(b) which is a deep gain security for the purposes of Schedule 11 to the Finance Act 1989.

(3B) For the purposes of this section “corporate bond” also includes a security—

(a) which is not included in the definition in subsection (2) above, and

(b) which, by virtue of paragraph 21(2) of Schedule 11 to the Finance Act 1989, falls to be treated as a deep gain security as there mentioned.

(3C) For the purposes of this section “corporate bond” also includes a security—

(a) which is not included in the definition in subsection (2) above, and

(b) which, by virtue of paragraph 22(2) of Schedule 11 to the Finance Act 1989, falls to be treated as a deep gain security as there mentioned.]

[F19 (3D) For the purposes of this section “corporate bond” also includes a security—

(a) which is not included in the definition in subsection (2) above, and

(b) which, by virtue of paragraph 22A(2) or 22B(3) of Schedule 11 to the Finance Act 1989, falls to be treated as a deep gain security as mentioned in the paragraph concerned.]

(4) Subject to subsection (6) below, for the purposes of this section and Schedule 13 to this Act, a corporate bond—

(a) is a “qualifying" corporate bond if it is issued after 13th March 1984; and

(b) becomes a “qualifying" corporate bond if, having been issued on or before that date, it is acquired by any person after that date and that acquisition is not as a result of a disposal which is excluded for the purposes of this subsection.

(5) Where a person disposes of a corporate bond which was issued on or before 13th March 1984 and, before the disposal, the bond had not become a qualifying corporate bond, the disposal is excluded for the purposes of subsection (4) above if, by virtue of any enactment,—

(a) the disposal is treated for the purposes of the Capital Gains Tax Act 1979 as one on which neither a gain nor a loss accrues to the person making the disposal; or

(b) the consideration for the disposal is treated for the purposes of that Act as reduced by an amount equal to the held-over gain on that disposal, as defined for the purposes of section 126 [F20 or 147A of that Act].

[F21 (5A) Subject to subsection (6) below, for the purposes of this section and Schedule 13 to this Act a corporate bond which falls within subsection (3A) above is a qualifying corporate bond, whatever the date of its issue; and subsections (4) and (5) above shall not apply in the case of such a bond.

(5B) Subject to subsection (6) below, for the purposes of this section and Schedule 13 to this Act a corporate bond which falls within subsection (3B) above is a qualifying corporate bond as regards a disposal made after the time mentioned in paragraph 21(1)(c) of Schedule 11 to the Finance Act 1989, whatever the date of its issue; and subsections (4) and (5) above shall not apply in the case of such a bond.

(5C) Subject to subsection (6) below, for the purposes of this section and Schedule 13 to this Act a corporate bond which falls within subsection (3C) above is a qualifying corporate bond as regards a disposal made after the time the agreement mentioned in paragraph 22(1)(b) of Schedule 11 to the Finance Act 1989 is made, whatever the date of its issue; and subsections (4) and (5) above shall not apply in the case of such a bond.]

[F22 (5D) Subject to subsection (6) below, for the purposes of this section and Schedule 13 to this Act a corporate bond which falls within subsection (3D) above is a qualifying corporate bond as regards a disposal made after the time mentioned in paragraph 22A(1)(c) or 22B(2)(b) (as the case may be) of Schedule 11 to the Finance Act 1989.]

(6) A security which is issued by a member of a group of companies to another member of the same group is not a qualifying corporate bond for the purposes of this section or Schedule 13 to this Act [F23 except in relation to a disposal by a person who (at the time of the disposal) is not a member of the same group as the company which issued the security]; and references in this subsection to a group of companies or to a member of a group shall be construed in accordance with section 272 of the Taxes Act.

(7) Part II of Schedule 13 to this Act shall have effect in any case where a transaction occurs of such a description that, apart from the provisions of that Schedule,—

(a) sections 78 to 81 of the Capital Gains Tax Act 1979 would apply by virtue of any provision of Chapter II of Part IV of that Act; and

(b) either the original shares would consist of or include a qualifying corporate bond and the new holding would not, or the original shares would not and the new holding would consist of or include such a bond;

and in paragraph (b) above “the original shares” and “the new holding” have the same meaning as they have for the purposes of the said sections 78 to 81.

(8) For the purposes of this section, in any case where—

(a) a security is comprised in a letter of allotment or similar instrument, and

(b) the right to the security thereby conferred remains provisional until accepted,

the security shall not be treated as issued until there has been acceptance.

Textual Amendments

F17 S. 64(2)(a) repealed by Finance Act 1989 ss. 139(1)(2), 187, Sch.17 Part VII

F18 S. 64(3A)–(3C) inserted by Finance Act 1989 s. 139(1)(3)

F19 S. 64(3D) inserted by Finance Act 1990 s. 56 and Sch. 10 paras. 28(2), 29(2) and deemed always to have had effect

F20 Words substituted by Finance Act 1989 s. 124, Sch. 14 para. 6(4)

F21 S. 64(5A)–(5C) inserted by Finance Act 1989 s. 139(1)(4)

F22 S. 64(5D) inserted by Finance Act 1990 s. 56, Sch. 10 paras. 28(3), 29(2) and deemed always to have had effect

F23 Words inserted by Finance Act 1989 s. 139(1)(5)

Modifications etc. (not altering text)

C1 S. 64(4) applied by Capital Gains Tax Act 1979 (c. 14), s. 136B

65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F24 U.K.

Textual Amendments

F24 S. 65 repealed by Finance (No. 2) Act 1987 s. 104(4), Sch. 9 Part II (and ss. 63 to 71 are expressed to be repealed, as mentioned in s. 289 of the 1992 Act, by Taxation of Chargeable Gains Act 1992 (c. 12), s. 290, Sch.12 (with ss. 101(1), 201(3), Sch. 11 paras. 20, 22, 26, 27)).

66 Disposals and acquisitions treated as made at market value: removal of certain exceptions. U.K.

(1) In section 29A of the Capital Gains Tax Act 1979 (certain disposals and acquisitions treated as made at market value) in subsection (2) (which, among other things, excludes certain acquisitions where the corresponding disposal is made by an excluded person) the words “Except in the case specified in subsection (4) below" and, in paragraph (a), the words “or the corresponding disposal is made by an excluded person" shall be omitted.

(2) For subsections (3) and (4) of the said section 29A there shall be substituted the following subsections:—

“(3) In any case where—

(a) apart from this subsection, subsection (1) above would apply to the acquisition of an asset, and

(b) the condition in subsection (2) above is fulfilled with respect to the acquisition, and

(c) the corresponding disposal is made on or after 6th April 1983 and before 6th April 1985, and

(d) the corresponding disposal is made by an excluded person who is within the charge to capital gains tax or corporation tax in respect of any chargeable gain accruing to him on the disposal,

then, if the person acquiring the asset and the excluded person so elect by notice in writing given to the Board within the period of two years beginning at the end of the chargeable period in which the corresponding disposal is made, subsection (1) above shall not apply to the acquisition or the corresponding disposal.

(4) There shall be made all such adjustments of capital gains tax or corporation tax (in respect of chargeable gains), whether by way of assessment or by way of discharge or repayment of tax, as may be required in consequence of the making of an election under subsection (3) above.”

(3) Subsections (5) and (6) of section 32 of the Capital Gains Tax Act 1979 (special rules as to sums allowable on account of expenditure in certain cases of disposals by non-residents) shall not apply where the disposal by the person who is neither resident nor ordinarily resident in the United Kingdom is made on or after 6th April 1985.

(4) Subsections (1) and (2) above have effect in relation to acquisitions and disposals on or after 6th April 1983.

67 Parallel pooling. U.K.

(1) Schedule 6 to the Finance Act 1983 (election for pooling) shall have effect, and be deemed always to have had effect, with the amendments set out in the following provisions of this section.

(2) In paragraph 1 (interpretation) at the end of sub-paragraph (2) (which excludes certain assets from being qualifying securities for the purposes of that Schedule) there shall be added the words

“nor

(c) securities which are, or have at any time after the expiry of the period which, in relation to a disposal of them, would be the qualifying period, been material interests in a non-qualifying offshore fund, within the meaning of Chapter VII of Part II of the Finance Act 1984”.

(3) In sub-paragraph (5) of paragraph 3 (effect of election: time when the holding comes into being) in paragraph (b) for the words “on 1st April 1982" there shall be substituted the words “immediately before 1st April 1982".

(4) In paragraph 9 (transfers on a no gain/no loss basis) for sub-paragraphs (2) and (3) there shall be substituted the following sub-paragraphs:—

“(2) The disposal referred to in sub-paragraph (1) above shall be regarded for the purposes of this Schedule as an operative event.

(3) Notwithstanding anything in paragraph 2 of Schedule 13 to the 1982 Act, the amount which, on the disposal referred to in sub-paragraph (1) above, is to be regarded as the consideration given by the second company for the acquisition of the securities (and, accordingly, the amount which is to be added to that company’s unindexed pool of expenditure on the disposal) shall not include the indexation allowance on that disposal.

(4) Nothing in sub-paragraph (3) above affects the amount which, by virtue of paragraph 2(3) of Schedule 13 to the 1982 Act, is to be treated as the consideration received by the first company on the disposal referred to in sub-paragraph (1) above, and it shall be that amount (rather than the smaller amount referred to in sub-paragraph (3) above) which, on that disposal, shall be added to the second company’s indexed pool of expenditure.

(5) Paragraph 3 of Schedule 13 to the 1982 Act shall not apply on any subsequent disposal of the holding in which the securities referred to in sub-paragraph (1) above are comprised.”

68 Maintenance funds for historic buildings. U.K.

In consequence of the operation of section 79 of the Finance Act 1980 (general relief for gifts) section 148 of the Capital Gains Tax Act 1979 (specific relief in the case of certain disposals relating to maintenance funds for historic buildings) shall cease to have effect with respect to disposals made on or after 6th April 1984.

69 Foreign currency accounts. U.K.

(1) At the end of subsection (4) of section 18 of the Capital Gains Tax Act 1979 (location of assets) there shall be added the following paragraph—

“(j) a debt which—

(i) is owed by a bank, and

(ii) is not in sterling, and

(iii) is represented by a sum standing to the credit of an account in the bank of an individual who is not domiciled in the United Kingdom,

is situated in the United Kingdom if and only if that individual is resident in the United Kingdom and the branch or other place of business of the bank at which the account is maintained is itself situated in the United Kingdom.”

(2) Subsection (1) above shall be deemed to have come into force on 6th April 1983.

F25 70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.K.

Textual Amendments

F25 Ss. 63 to 71 repealed (in relation to tax for the year 1992-1993 and subsequent years subject as mentioned in s. 289 of the amending Act) by Taxation of Chargeable Gains Act 1992 (c. 12), s. 290, Sch.12 (with savings in Sch. 11 para. 18(b)) (and with ss. 101(1), 201(3), Sch. 11 paras. 20, 22, 26, 27).

70 Postponement of tax due from beneficiaries on gains of non-resident trustees. U.K.

(1) The provisions of Schedule 14 to this Act have effect in any case where,—

(a) before 6th April 1981, a chargeable gain accrued to the trustees of a settlement in such circumstances that section 17 of the Capital Gains Tax Act 1979 (non-resident trust) applies as respects that chargeable gain; and

(b) by virtue of that section a beneficiary under the settlement is treated for the purposes of that Act as if, in the year 1983-84 or any earlier year of assessment, an amount determined by reference to the chargeable gain which accrued to the trustees or, as the case may be, the whole or part of that gain had been a chargeable gain accruing to the beneficiary; and

(c) at 29th March 1983 some or all of the capital gains tax payable in respect of the chargeable gain accruing to the beneficiary had not been paid.

(2) In subsection (3)(b) of the said section 17 (which relates to capital payments which are made in the exercise of a discretion, which are received at any time and which represent a chargeable gain to which that section applies) after the words “after the chargeable gain accrues" there shall be inserted the words “but before 6th April 1984".

(3) In consequence of the amendment made by subsection (2) above, in section 80 of the Finance Act 1981 (new provisions as to gains of non-resident settlements) in subsection (8) (which, among other things, excludes from the scope of that section payments received on or after 10th March 1981 so far as they represent chargeable gains accruing to the trustees before 6th April 1981) after the words “received on or after that date" there shall be inserted the words “and before 6th April 1984".

(4) In this section and Schedule 14 to this Act “settlement”, “settlor” and “settled property” have the same meaning as in section 17 of the Capital Gains Tax Act 1979.

71 Non-resident settlements: definition of “settlement" and “settlor". U.K.

(1) At the end of section 83 of the Finance Act 1981 (definitions etc. for provisions relating to gains of non-resident settlements) there shall be added the following subsection—

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

• “settlement" and “settlor" have the meaning given by section 454(3) 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.”

(2) This section has effect for the year 1984-85 and subsequent years of assessment.

CHAPTER IV U.K. INSURANCE

72 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F26 U.K.

Textual Amendments

F26 Ss. 72, 73(1)–(3) repealed by Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 31

73 Insurance business of registered friendly societies. U.K.

(1)—(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F27

(4) In consequence of the preceding provisions of this section and subsection (5) below, in section 1 of the M14 Friendly Societies Act (Northern Ireland) 1970 and section 7 of the M15 Friendly Societies Act 1974 (societies which may be registered),—

(a) paragraph (a) of subsection (3), and

(b) subsection (3A),

shall not have effect with respect to benefits secured by contracts made after 13th March 1984.

(5)—(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F28

(7) If, after 13th March 1984, the committee of a registered society or branch whose rules make provision for it to carry on life or endowment business resolve to accept, in respect of any contract falling within subsection (8) below, premiums of amounts arrived at by deducting 15 per cent. from the premiums provided for by the rules of the society or branch (that is to say by deducting the same amount as, apart from section 72 above, would have been deductible by way of relief under section 19 of the Taxes Act),—

(a) the resolution shall be deemed to be permitted by the principal Act and the rules of the society or branch; and

(b) nothing in the principal Act shall require the registration of the resolution; and

(c) together with the annual return of the society or branch for the year of account ending 31st December 1984, the society or branch shall send a copy of the resolution to the registrar.

(8) Subsection (7) above applies to any contract entered into by a registered society or branch—

(a) which is for the assurance under life or endowment business of any gross sum; and

(b) which is entered into pursuant to a proposal received by the society or branch on or before 13th March 1984; and

(c) which is one which the society might lawfully have entered into on that date; and

(d) which is entered into after 13th March 1984 and before 1st May 1984.

(9) In subsection (7) above “the principal Act” means, according to the enactment under which the society or branch is registered,—

(a) the M16 Friendly Societies Act (Northern Ireland) 1970; or

(b) the M17 Friendly Societies Act 1974;

and subsections (7) and (8) shall be construed as one with the principal Act.

Textual Amendments

F27 Ss. 72, 73(1)–(3) repealed by Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 31

F28 S. 73(5)(6) repealed by Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 31

Marginal Citations

M14 1970 c. 31 (N.I.).

M15 1974 c. 46.

M16 1970 c. 31 (N.I.).

M17 1974 c. 46.

74—76. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F29 U.K.

Textual Amendments

F29 Ss. 74–76 repealed by Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 31

CHAPTER V U.K. OIL AND GAS INDUSTRY

77 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F30 U.K.

Textual Amendments

F30 S. 77 repealed by Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 31

78 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F31 U.K.

Textual Amendments

F31 S. 78 repealed by Capital Allowances Act 1990 (c. 1), s. 164(4), Sch. 2

79 (1) This section applies where, on or after 13th March 1984 and in pursuance of a transfer by a participator in an oil field of the whole or part of his interest in the field, there is—

(a) a disposal of an interest in oil to be won from the oil field; or

(b) a disposal of an asset used in connection with the field;

and section 12 of the Oil Taxation Act 1975 (interpretation of Part I of that Act) applies for the interpretation of this subsection and the reference to the transfer by a participator in an oil field of the whole or part of his interest in the field shall be construed in accordance with paragraph 1 of Schedule 17 to the Finance Act 1980.

(2) In this section “disposal” has the same meaning as in the M18 Capital Gains Tax Act 1979 and “material disposal” means—

(a) a disposal falling within paragraph (a) or paragraph (b) of subsection (1) above; or

(b) the sale of an asset referred to in subsection (3) of section 278 of the Taxes Act (company ceasing to be a member of a group: notional sale and repurchase of asset acquired from another member) where the asset was acquired by the chargeable company (within the meaning of that section) on a disposal falling within one of those paragraphs.

(3) For any chargeable period (within the meaning of the Taxes Act) in which a chargeable gain or allowable loss accrues to any person (in the following provisions of this section referred to as “the chargeable person") on a material disposal (whether taking place in that period or not), subject to subsection (7) below there shall be aggregated—

(a) the chargeable gains accruing to him in that period on such disposals, and

(b) the allowable losses accruing to him in that period on such disposals,

and the lesser of the two aggregates shall be deducted from the other to give an aggregate gain or, as the case may be, an aggregate loss for that chargeable period.

(4) For the purposes of capital gains tax and corporation tax in respect of capital gains,—

(a) the several chargeable gains and allowable losses falling within paragraphs (a) and (b) of subsection (3) above shall be left out of account; and

(b) the aggregate gain or aggregate loss referred to in that subsection shall be treated as a single chargeable gain or allowable loss accruing to the chargeable person in the chargeable period concerned on the notional disposal of an asset; and

(c) if in any chargeable period there is an aggregate loss, then, except as provided by subsection (6) below, it shall not be allowable as a deduction against any chargeable gain arising in that or any later period, other than an aggregate gain treated as accruing in a later period by virtue of paragraph (b) above (so that the aggregate gain of that later period shall be reduced or extinguished accordingly); and

(d) if in any chargeable period there is an aggregate gain, no loss shall be deducted from it except in accordance with paragraph (c) above; and

(e) without prejudice to any indexation allowance which was taken into account in determining an aggregate gain or aggregate loss under subsection (3) above, no further indexation allowance shall be allowed on a notional disposal referred to in paragraph (b) above.

(5) Where, in accordance with subsection (3) above, the chargeable person has an aggregate gain, that gain . . . F32 and his ring fence income (if any) for the chargeable period concerned together constitute, for the purposes of this section, his ring fence profits for that period . . . F33

(6) In any case where—

(a) by virtue of subsection (4)(b) above, an aggregate loss is treated as accruing to the chargeable person in any chargeable period, and

(b) before the expiry of the period of two years beginning at the end of the chargeable period concerned, the chargeable person makes a claim under this subsection,

the whole, or such portion as is specified in the claim, of the aggregate loss shall be treated for the purposes of capital gains tax or corporation tax, as the case may be, as an allowable loss arising in that chargeable period otherwise than on a material disposal.

(7) In any case where a loss accrues to the chargeable person on a material disposal made to a person who is connected with him (within the meaning of section 63 of the M19 Capital Gains Tax Act 1979)—

(a) the loss shall be excluded from those referred to in paragraph (b) of subsection (3) above and, accordingly, shall not be aggregated under that subsection; and

(b) except as provided by subsection (8) below, section 62 of that Act shall apply in relation to the loss as if, in subsection (3) of that section (losses on disposals to a connected person to be set only against gains on disposals made to the same person at a time when he is a connected person), any reference to a disposal were a reference to a disposal which is a material disposal; and

(c) to the extent that the loss is set against a chargeable gain by virtue of paragraph (b) above, the gain shall be excluded from those referred to in paragraph (a) of subsection (3) above and, accordingly, shall not be aggregated under that subsection.

(8) In any case where—

(a) the losses accruing to the chargeable person in any chargeable period on material disposals to a connected person exceed the gains accruing to him in that chargeable period on material disposals made to that person at a time when they are connected persons, and

(b) before the expiry of the period of two years beginning at the end of the chargeable period concerned, the chargeable person makes a claim under this subsection,

the whole, or such part as is specified in the claim, of the excess referred to in paragraph (a) above shall be treated for the purposes of section 62 of the Capital Gains Tax Act 1979 as if it were a loss accruing on a disposal in that chargeable period, being a disposal which is not a material disposal and which is made by the chargeable person to the connected person referred to in paragraph (a) above.

(9) Where a claim is made under subsection (6) or subsection (8) above, all such adjustments shall be made, whether by way of discharge or repayment of tax (including capital gains tax) or otherwise, as may be required in consequence of the operation of that subsection.

(10) In subsection (5) above “ring fence income” means income arising from oil extraction activities or oil rights, within the meaning of [F34 Chapter V of Part XII of the Taxes Act 1988].

Textual Amendments

F32 Words repealed by Finance (No. 2) Act 1987 ss. 76(3)(a), 104(4), Sch. 9 Part II

F33 Words repealed by Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 31

F34 Words substituted by Income and Corporation Taxes Act 1988 (c. 1), Sch. 29 para. 32

Marginal Citations

M18 1979 c. 14.

M19 1979 c. 14.

80 Replacement of business assets used in connection with oil fields. U.K.

(1) If the consideration which a person obtains on a material disposal is applied, in whole or in part, as mentioned in subsection (1) of section 115 or section 116 of the M20 Capital Gains Tax Act 1979 (replacement of business assets), that section shall not apply unless the new assets are taken into use, and used only, for the purposes of the ring fence trade.

(2) Subsection (1) above has effect notwithstanding subsection (7) of the said section 115 (which treats two or more trades as a single trade for certain purposes).

(3) Where the said section 115 or the said section 116 applies in relation to any of the consideration on a material disposal, the asset which constitutes the new assets for the purposes of that section shall be conclusively presumed to be a depreciating asset, and section 117 of the Capital Gains Tax Act 1979 (special rules for depreciating assets) shall have effect accordingly, except that—

(a) the reference in subsection (2)(b) of that section to a trade carried on by the claimant shall be construed as a reference solely to his ring fence trade; and

(b) subsections (3) to (6) of that section shall be omitted.

(4) In any case where sections 115 to 117 of the Capital Gains Tax Act 1979 have effect in accordance with the preceding provisions of this section, the operation of section 276 of the Taxes Act (replacement of business assets by members of a group) shall be modified as follows:—

(a) only those members of a group which actually carry on a ring fence trade shall be treated for the purposes of those sections as carrying on a single trade which is a ring fence trade; and

(b) only those activities which, in relation to each individual member of the group, constitute its ring fence trade shall be treated as forming part of that single trade.

(5) In this section—

(a) “material disposal” has the meaning assigned to it by section 79 above; and

(b) “ring fence trade” means a trade consisting of either or both of the activities mentioned in paragraphs (a) and (b) of subsection (1) of section [F35 492 of the Taxes Act 1988].

Textual Amendments

F35 Words substituted by Finance Act 1988 (c. 39), s. 146, Sch. 13 paras. 22, 25

Marginal Citations

M20 1979 c. 14.

81 Disposals by non-residents etc. of assets used in connection with exploration and exploitation activities. U.K.

(1) Section 38 of the Finance Act 1973 (territorial extension of charge to income tax, capital gains tax and corporation tax) shall be amended in accordance with this section.

(2) After subsection (3) there shall be inserted the following subsections:—

“(3A) Gains accruing on the disposal of—

(a) exploration or exploitation assets which are situated in a designated area, or

(b) unquoted shares deriving their value or the greater part of their value directly or indirectly from exploration or exploitation assets situated in the United Kingdom or a designated area or from such assets and exploration or exploitation rights taken together,

shall be treated for the purposes of the Capital Gains Tax Act 1979 as gains accruing on the disposal of assets situated in the United Kingdom.

(3B) For the purposes of this section, an asset disposed of is an exploration or exploitation asset if either—

(a) it is not a mobile asset and it is being or has at some time within the period of two years ending at the date of the disposal been used in connection with exploration or exploitation activities carried on in the United Kingdom or a designated area; or

(b) it is a mobile asset which, at some time within the period of two years ending at the date of the disposal, has been used in connection with exploration or exploitation activities so carried on and is dedicated to an oil field in which the person making the disposal, or a person connected with him within the meaning of section 533 of the Taxes Act, is or has been a participator;

and expressions used in paragraphs (a) and (b) above have the same meaning as if those paragraphs were included in Part I of the Oil Taxation Act 1975.

(3C) In paragraph (b) of subsection (3A) above “unquoted shares" means shares other than those which are quoted on a recognised stock exchange (within the meaning of the Corporation Tax Acts); and references in subsections (4) and (5) below to exploration or exploitation assets include references to unquoted shares falling within that paragraph.”

(3) In subsection (4) (which, among other things, provides that certain gains are to be treated as gains accruing on the disposal of trade assets) after the words “such rights" there shall be inserted the words “or of exploration or exploitation assets."

(4) In subsection (5) (inter-company disposals) after the word “rights" there shall be inserted the words “or exploration or exploitation assets".

(5) This section has effect in relation to disposals on or after 13th March 1984.

CHAPTER VI U.K. CONTROLLED FOREIGN COMPANIES

82—91. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F36 U.K.

Textual Amendments

F36 Ss. 82–91 repealed by Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 31

92—100. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F37 U.K.

Textual Amendments

F37 Ss. 92–100 repealed by Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 31

101—107. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F38 U.K.

Textual Amendments

F38 Ss. 101–107 repealed by Inheritance Tax Act 1984 (c. 51), ss. 274, 277, Schs. 7, 9

108 Pre-consolidation amendments. U.K.

Schedule 21 to this Act (which contains amendments designed to facilitate, or otherwise desirable in connection with, the consolidation of the law relating to capital transfer tax) shall have effect.

PART IV U.K. STAMP DUTY

109 Reduction of stamp duty on conveyances and transfers. U.K.

(1) In subsection (1) of section 55 of the Finance Act 1963 and subsection (1) of section 4 of the Finance Act (Northern Ireland) 1963 for paragraphs (a) to (e) there shall be substituted the following paragraphs:—

“(a) where the amount or value of the consideration is £30,0001 or under and the instrument is certified, as described in section 34(4) of the Finance Act 1958, at £30,000, nil;

(b) where paragraph (a) above does not apply and the amount or value of the consideration does not exceed £500, the rate of 50p for every £50 or part of £50 of the consideration; and

(c) where paragraph (a) above does not apply and the amount or value of the consideration exceeds £500, the rate of £1 for every £100 or part of £100 of the consideration”; and in subsection (2) of each of those sections for the words from “as if" onwards there shall be substituted the words “as if paragraph (a) and, in paragraphs (b) and (c), the words “paragraph (a) above does not apply and" were omitted".

(2) Part III of Schedule 11 to the Finance Act 1974 (saving for certain transfers of stock or marketable securities) shall cease to have effect.

(3) Subject to subsection (4) below, subsections (1) and (2) above apply—

(a) to instruments executed on or after 20th March 1984; and

(b) to instruments executed on or after 13th March 1984 which are stamped on or after 20th March 1984;

and, for the purposes of section 14(4) of the Stamp Act 1891 (instruments not to be given in evidence etc. unless stamped in accordance with the law in force at the time of first execution), the law in force at the time of execution of an instrument falling within paragraph (b) above shall be deemed to be that as varied in accordance with subsections (1) and (2) above.

(4) In the case of an instrument giving effect to a stock exchange transaction, as defined in section 4 of the Stock Exchange Transfer Act 1963, subsections (1) to (3) above do not apply unless the transaction takes place on or after 12 March 1984 and is one in respect of which settlement is due on or after 13th March 1984.

(5) This section shall be deemed to have come into force on 20th March 1984.

110 Extension of stamp duty relief on sales at discount. U.K.

(1) Section 107 of the M21 Finance Act 1981 (sales of houses at discount by local authorities etc.) shall be amended in accordance with the following provision of this section.

(2) At the end of subsection (3) of that section (which lists the bodies a conveyance or transfer by which is affected by the section) there shall be added the following paragraph:—

“(n) the United Kingdom Atomic Energy Authority”.

(3) After subsection (3) of that section there shall be added the following subsection:—

“(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.”

(4) Subsections (2) and (3) above have effect with respect to instruments—

(a) executed on or after 20th March 1984, or

(b) executed on or after 13th March 1984 and stamped on or after 20th March 1984,

and, for the purposes of section 14(4) of the Stamp Act 1891 (instruments not to be given in evidence etc. unless stamped in accordance with the law in force at the time of first execution), the law in force at the time of execution of an instrument falling within paragraph (b) above shall be deemed to be that as varied in accordance with subsections (2) and (3) above.

(5) With respect to instruments executed on or after the passing of this Act, at the end of subsection (3) of that section, and after the paragraph inserted by subsection (2) above, there shall be added the following paragraph:—

“(o) such other body as the Treasury may, by order made by statutory instrument, prescribe for the purposes of this section”.

Marginal Citations

M21 1981 c. 35.

111 Agreements for leases. U.K.

(1) In section 75 of the M22 Stamp Act 1891 (agreements for leases for terms not exceeding 35 years to be stamped as if they were leases) in subsection (1) the words “not exceeding thirty-five years" shall be omitted and for subsection (2) (5 pence stamp on lease in conformity with duly stamped agreement) there shall be substituted the following subsection:—

“(2) Where duty has been duly paid on an agreement for a lease or tack and, subsequent to that agreement, a lease or tack is granted which either—

(a) is in conformity with the agreement, or

(b) relates to substantially the same property and term as the agreement,

then the duty which would otherwise be charged on the lease or tack shall be reduced (or, as the case may be, extinguished) by the deduction therefrom of the duty paid on the agreement.”

(2) In any case where—

(a) an interest in land is conveyed or transferred subject to an agreement for a lease or tack for a term exceeding 35 years, or

(b) a lease or tack is granted subject to an agreement for a lease or tack for a term exceeding 35 years,

then, whether or not the conveyance, transfer, lease or tack is expressed to be so subject, it shall not be taken to be duly stamped unless there is denoted upon the conveyance, transfer, lease or tack the duty paid on the agreement; and section 11 of the Stamp Act 1891 shall have effect for this purpose as if the duty chargeable on the conveyance, transfer, lease or tack depended on the duty paid on the agreement.

(3) For the purposes of subsection (2) above, an interest conveyed or transferred or, as the case may be, a lease or tack granted is not to be regarded as subject to an agreement for a lease or tack if that agreement is directly enforceable against another interest in the land in relation to which the interest conveyed or transferred or, as the case may be, the lease or tack granted is a superior interest.

(4) In section 15 of the Stamp Act 1891 (stamping of instruments after execution) in the Table following paragraph (d) of subsection (2) (instruments as to which certain special provisions apply), after the entry beginning “lease or tack", there shall be inserted:—

“Agreement for lease or tack chargeable under section 75.

The person contracting for the lease or tack to be granted to him or another.”

(5) This section applies to any agreement for a lease or tack entered into on or after 20th March 1984 and shall be deemed to have come into force on that date.

Marginal Citations

M22 1891 c. 39.

112 Sub-sales. U.K.

(1) In subsection (4) of section 58 of the M23 Stamp Act 1891 (in case of a sub-sale to a single purchaser, duty chargeable only on consideration moving from the sub-purchaser) after the words “conveyed immediately to the sub-purchaser" there shall be inserted the words “then, except where—

(a) the chargeable consideration moving from the sub-purchaser is less than the value of the property immediately before the contract of sale to him, and

(b) the conveyance is not one to which section 107 of the M24 Finance Act 1981 (sales of houses at discount by local authorities etc.) applies".

(2) In subsection (5) of section 58 of the Stamp Act 1891 (in case of a sub-sale in parts or parcels to different sub-purchasers, each conveyance chargeable with duty only on consideration moving from the sub-purchaser) after the words “to different persons in parts or parcels" there shall be inserted the words “ then, except where the aggregate of the chargeable consideration for the sale of all such parts or parcels is less than the value of the whole of the property immediately before the contract for their sale or, as the case may be, the first contract for the sale of any of them ”.

(3) At the end of the said section 58 there shall be inserted the following subsection:—

“(7) Any reference in subsection (4) or subsection (5) of this section to chargeable consideration is a reference to consideration which falls to be brought into account in determining the duty (if any) chargeable on the conveyance to the sub-purchaser or, as the case may be, on the conveyance of each of the parts or parcels in question; and in any case where it is necessary for the purposes of either of those subsections to determine the value of any property, that value shall be determined as for the purposes of section 74 of the Finance (1909-10) Act 1910 (gifts inter vivos).”

(4) This section applies where the contract for the sub-sale or, as the case may be, the first contract for sub-sale of a part or parcel is entered into on or after 20th March 1984, and shall be deemed to have come into force on that date.

Marginal Citations

M23 1891 c. 39.

M24 1981 c. 35.

PART V U.K. OIL TAXATION

113 Restriction on PRT reliefs. U.K.

(1) Subject to subsection (3) below, in determining whether any . . . F39 expenditure is allowable in the case of a participator in an oil field under section 5 or section 5A [F40 or section 5B] of the principal Act, no account shall be taken of any expenditure incurred before his qualifying date.

(2) Subject to subsection (3) below, in determining whether any unrelievable field losses are allowable in the case of a participator in an oil field under section 6 of that Act, no account shall be taken of any allowable loss which, in the case of any other oil field from which the winning of oil has permanently ceased, has accrued as mentioned in subsection (1) of that section unless the date on which the winning of oil from that other field permanently ceased fell on or after his qualifying date.

(3) Subsections (1) and (2) above do not apply in the case of a participator in an oil field if his qualifying date falls before 14th September 1983 or before the end of the first chargeable period in relation to the field.

(4) In this section “qualifying date”, in relation to a participator in an oil field, means whichever of the following dates is applicable in his case or (if there is more than one) the earliest of them—

(a) the date on which the participator first qualified in respect of any licensed area, being an area which is wholly or partly included in the field;

(b) if the participator is a company, the date on which another company first satisfied both of the following conditions, that is to say—

(i) it qualified in respect of any licensed area, being an area which is wholly or partly included in the field; and

(ii) it was connected with the participator; and

(c) if he is a participator in the field by reason of an arrangement between him and another company, being an arrangement to which paragraph 5 of Schedule 3 to the principal Act applies (transfer of rights etc. to associated company), the date on which the arrangement was made or, if later, the date on which that other company first qualified in respect of any licensed area, being an area which is wholly or partly included in the field.

(5) For the purposes of subsection (4) above, a person qualifies in respect of a licensed area when, in respect of that area—

(a) he is, or is one of those, entitled to the benefit of a licence, or

(b) he enjoys rights under an agreement, being an agreement which has been approved by the Board and certified by the Secretary of State to confer on him rights which are the same as, or similar to, those conferred by a licence.

(6) Where (apart from this section) expenditure would be allowable under section 5 or section 5A [F41 or section 5B] of the principal Act in the case of a participator in an oil field (in this subsection referred to as “the new participator") by virtue only of [F42 paragraphs 16 to 16B] of Schedule 17 to the Finance Act 1980 (transfers of interests in oil fields) then, for the purpose of determining whether the expenditure is allowable in his case in accordance with this section, the date which was the qualifying date in relation to the old participator (within the meaning of that Schedule) is an applicable date to be taken into account for the purposes of subsection (4) above in the case of the new participator.

(7) For the purposes of subsection (2) above the date on which the winning of oil from an oil field has permanently ceased is the date stated in a decision (whether of the Board or on appeal from the Board) under Schedule 8 to the principal Act to be that date.

(8) For the purposes of this section, one company is connected with another if—

(a) one is a 51 per cent. subsidiary of the other and the other is not a 51 per cent. subsidiary of any company; or

(b) each of them is a 51 per cent. subsidiary of a third company which is not itself a 51 per cent. subsidiary of any company; and section [F43 836 of the Taxes Act 1988] (subsidiaries) applies for the purposes of this subsection.

(9) In this section—

(a) “company” means any body corporate; and

(b) any reference to the winning of oil from an oil field permanently ceasing includes a reference to the permanent cessation of operations for the winning of oil from the field.

(10) This section shall have effect in relation to any expenditure or losses in respect of which a claim is made after 13th September 1983.

Textual Amendments

F39 Words repealed by Finance Act 1987 ss. 64(2), 72(7), Schs. 13 Part II para. 9(1)(a) and 16 Part X

F40 Words inserted by Finance Act 1987 s. 64(2), Sch. 13 Part II para. 9(1)(b)

F41 Words inserted by Finance Act 1987 s. 64(2), Sch. 13 Part II para. 9(2)

F42 Words substituted by Finance Act 1987 s. 64(2), Sch. 13 Part II para. 9(2)

F43 Words substituted by Income and Corporation Taxes Act 1988 (c. 1), Sch. 29 para. 32

114 Sales of gas: treatment of certain payments. U.K.

(1) This section applies only in relation to oil consisting of gas and references in the following provisions of this section to oil shall be construed accordingly.

(2) In any case where, under a contract for the sale of oil won from an oil field, the consideration includes any sum—

(a) which is payable by the buyer in respect of a quantity of oil to be delivered at a specified time or in a specified period, and

(b) which is payable whether or not the buyer takes delivery of the whole of the oil at that time or in that period, and

(c) which, in the event that the buyer does not take delivery of the whole of the oil, entitles the buyer to delivery of oil free of charge at a later time or in a later period,

then, to the extent that the sum is payable in respect of oil which is not delivered at the time or in the period in question, the sum shall be treated for the purposes of the principal Act as an advance payment for the oil to be delivered free of charge and, accordingly, that oil shall be treated for those purposes as sold for a price which (subject to any additional element arising under the following provisions of this section) is equal to that advance payment.

(3) Where, in a case falling within subsection (2) above, an amount of oil is delivered free of charge in pursuance of the entitlement referred to in paragraph (c) of that subsection, the proportion of the advance payment referred to in that subsection which is to be attributed to that amount of oil shall be that which that amount of oil bears to the total quantity of oil of which the buyer is entitled to delivery free of charge by virtue of the payment of the sum in question.

(4) In any case where—

(a) by virtue of subsection (2) above a sum falls to any extent to be treated as an advance payment for oil to be delivered free of charge, but

(b) at the latest date at which oil could be delivered free of charge in pursuance of the entitlement referred to in paragraph (c) of that subsection, the whole or any part of the oil to which that entitlement relates has not been so delivered,

then at that latest date, one tonne of oil shall be deemed to be delivered as mentioned in paragraph (b) above and so much of the advance payment as has not, under subsection (3) above, been attributed to oil actually delivered shall be attributed to that one tonne.

(5) Where, under a contract for the sale of oil won from an oil field, the consideration includes any sums (in this section referred to as “capacity payments")—

(a) which are payable by the buyer at specified times or in respect of specified periods, and

(b) which, though they may vary in amount by reference to deliveries of oil or other factors, are payable whether or not oil is delivered under the contract at particular times or in particular periods, and

(c) which do not, under the terms of the contract or by virtue of subsection (2) above, fall to be treated, in whole or in part, as advance payments for oil to be delivered at some time after the times or periods at or in respect of which the sums are payable,

then, in so far as they would not do so apart from this subsection, the capacity payments shall be treated for the purposes of the principal Act as an additional element of the price received or receivable for the oil sold under the contract.

(6) For the purpose of determining, in a case where there are capacity payments under a contract for the sale of oil won from an oil field, the assessable profit or allowable loss accruing in a particular chargeable period to the participator by whom oil is sold under the contract, each capacity payment shall be treated as an additional element of the price received or receivable for the oil delivered by him under the contract in the chargeable period in which the capacity payment is paid or payable; and if no oil is in fact so delivered in a chargeable period in which a capacity payment is paid or payable, one tonne of oil shall be deemed to be so delivered in that period and, accordingly, the capacity payment shall be treated for the purposes of the principal Act as the price for which that tonne is sold.

(7) If, by virtue of subsection (4) or subsection (6) above, one tonne of oil is deemed to be delivered in any chargeable period of the oil field referred to in subsection (2) or, as the case may be, subsection (5) above, a return for that period by the participator concerned under paragraph 2 of Schedule 2 to the principal Act shall give the like information in relation to that tonne as in relation to any other oil falling within sub-paragraph (2)(a) of that paragraph.

115 Information relating to sales at arm’s length and market value of oil. U.K.

(1) The Board may, by notice in writing given to a company which is or has been a participator in an oil field, require that company to give to the Board, within such time (not being less than thirty days) as may be specified in the notice, such particulars (which may include details of relevant documents) as may be so specified of any related transaction which appears to the Board to be relevant for the purpose of—

(a) determining whether a disposal of any oil is a sale at arm’s length, or

(b) ascertaining the market value of any oil.

(2) For the purposes of a notice under subsection (1) above a transaction is a related transaction if, but only if, it is one to which the company to whom the notice is given or a company associated with that company was a party; and for the purposes of this subsection two companies are associated with one another if—

(a) one is under the control of the other; or

(b) both are under the control of the same person or persons;

and in this subsection “control” has the meaning given by section [F44 840 of the Taxes Act 1988].

(3) In any case where a company (in this subsection and subsection (4) below referred to as “the participator company") is or has been a participator in an oil field and—

(a) the participator company is a 51 per cent. subsidiary of another company, or

(b) another company is a 51 per cent. subsidiary of the participator company, or

(c) the participator company and another company are both 51 per cent. subsidiaries of a third company,

the Board may, by notice in writing given to any company referred to in paragraphs (a) to (c) above which is resident in the United Kingdom, require it to make available for inspection any relevant books, accounts or other documents or records whatsoever of the company itself or, subject to subsection (5) below, of any other company which is its 51 per cent. subsidiary.

(4) In subsection (3) above “relevant” means relating to any transaction which is relevant for the purpose of—

(a) determining whether a disposal of any oil by the participator company is a sale at arm’s length; or

(b) ascertaining the market value of oil won by the participator company.

(5) In any case where—

(a) under subsection (3) above a company is by notice required to make available for inspection any books, accounts, documents or records of one of its 51 per cent. subsidiaries which is resident outside the United Kingdom, and

(b) it appears to the Board, on the application of the company, that the circumstances are such that the requirement ought not to have effect,

the Board shall direct that the company need not comply with the requirement.

(6) If, on an application under subsection (5) above, the Board refuse to give a direction under that subsection, the company concerned may, by notice in writing given to the Board within thirty days after the refusal, appeal to the Special Commissioners who, if satisfied that the requirement in question ought in the circumstances not to have effect, may determine accordingly.

(7) In this section—

• “company” means any body corporate; and

• “51 per cent. subsidiary" shall be construed in accordance with section [F44 838 of the Taxes Act 1988] (subsidiaries).

Textual Amendments

F44 Words substituted by Income and Corporation Taxes Act 1988 (c. 1), Sch. 29 para. 32

116 Offences relating to section 115. U.K.

(1) Where a company has been required by notice under subsection (1) or subsection (3) of section 115 above to give any particulars or, as the case may be, to make available for inspection any books, accounts, documents or records and fails to comply with the notice, the company shall be liable, subject to subsection (3) below—

(a) to a penalty not exceeding £500; and

(b) if the failure continues after it has been declared by the court or the Commissioners before whom proceedings for the penalty have been commenced, to a further penalty not exceeding £100 for each day on which the failure so continues.

(2) Where a company fraudulently or negligently furnishes, gives, produces or makes any incorrect information, document or record of a kind mentioned in subsection (1) or subsection (3) of section 115 above, the company shall be liable to a penalty not exceeding £2,500 or, in the case of fraud on its part, £5,000.

(3) A company shall not be liable to any penalty incurred under subsection (1) above for failure to comply with a notice if the failure is remedied before proceedings for the recovery of the penalty are commenced.

(4) In this section “company” has the same meaning as in section 115 above.

PART VI U.K. MISCELLANEOUS AND SUPPLEMENTARY

National insurance surcharge U.K.

117 Abolition of national insurance surcharge. U.K.

The surcharge payable under the M25 National Insurance Surcharge Act 1976 is hereby abolished—

(a) with respect to earnings paid on or after 6th April 1985, in the case of secondary Class 1 contributions payable by any of the bodies mentioned in section 143(4) of the M26 Finance Act 1982; and

(b) with respect to earnings paid on or after 1st October 1984, in any other case.

Marginal Citations

M25 1976 c. 85.

M26 1982 c. 39.

118—123. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F45 U.K.

Textual Amendments

F45 Ss. 118–123 repealed by Finance Act 1985 (c. 54), s. 98(6), Sch. 27 Pt. X Note 2

Miscellaneous U.K.

124 Recovery of certain tax assessed on non-residents. U.K.

(1) In paragraph 4 of Schedule 15 to the Finance Act 1973 (provisions supplementing the territorial extension of charge to tax under section 38 of that Act), after sub-paragraph (2) there shall be inserted the following sub-paragraph—

“(3) A payment in pursuance of a notice under this paragraph shall not be allowed as a deduction in computing any income, profits or losses for any tax purposes.”

(2) After that paragraph, there shall be inserted the following paragraph—

“4A (1) Subject to the following provisions of this Schedule, the power of the Board under paragraph 4 above to serve a notice in respect of tax remaining unpaid as there mentioned shall also apply where—

(a) tax is assessed on any person not resident in the United Kingdom as mentioned in paragraph 4(1)(a) or (b) but more than one licence under the Petroleum (Production) Act 1934 is the basis for the assessment; or

(b) tax assessed on any such person includes, but is not limited to, tax assessed on him as so mentioned (whether by reference to one or to more than one such licence);

but in any such case the amount the holder of any licence in question may be required to pay by a notice under that paragraph shall be the amount of the tax remaining unpaid under the assessment which is attributable to the profits or gains in respect of which that licence was the basis for the assessment, together with a corresponding proportion of any interest due as mentioned in paragraph 4(1).

(2) For the purposes of sub-paragrapah (1) above the amount of the tax remaining unpaid under the assessment which is attributable to the profits or gains in respect of which any licence in question was the basis for the assessment is such part of the total amount of that tax as bears to that total amount the same proportion as the proportion borne by the amount of the profits or gains in respect of which that licence was the basis for the assessment to the total amount of the profits or gains in respect of which the assessment was made.”

(3) In paragraph 6 of that Schedule, after the word “apply" there shall be inserted the words “ in relation to the holder of any licence ”.

(4) In paragraph 7 of that Schedule, at the end there shall be added the words “ or, if the certificate is cancelled under paragraph 8 below, to any such tax which becomes due after the cancellation of the certificate in respect of profits or gains arising while the certificate is in force (referred to below in this Schedule as pre-cancellation profits or gains) ”.

(5) After paragraph 7 of that Schedule, there shall be inserted the following paragraph—

“7A (1) Paragraph 7 above is subject to the following provisions of this paragraph in any case where—

(a) after the cancellation of a certificate issued to the holder of a licence under that paragraph tax is assessed as mentioned in paragraph 4(1)(a) or (b) above on the person who applied for the certificate; and

(b) the relevant profits or gains include (but are not limited to) pre-cancellation profits or gains.

(2) In this paragraph “the relevant profits or gains" means—

(a) in a case where the amount of the tax remaining unpaid under the assessment which, but for paragraph 7 above, the holder of the licence could be required to pay by a notice under paragraph 4 above (referred to below in this paragraph as the amount otherwise applicable in his case) is the whole of the amount remainig unpaid, all the profits or gains in respect of which the assessment was made; or

(b) in a case where the amount otherwise applicable in his case falls under paragraph 4A above to be determined by reference to profits or gains in respect of which the licence was the basis for the assessment, the profits or gains in question.

(3) In any case to which this paragraph applies, the amount the holder of the licence may be required to pay by a notice under paragraph 4 shall be the amount otherwise applicable in his case reduced by the amount of the tax remaining unpaid under the assessment which is attributable to the pre-cancellation profits or gains, together with a corresponding proportion of any interest due as mentioned in paragraph 4(1).

(4) For the purposes of sub-paragraph (3) above the amount of the tax remaining unpaid under the assessment which is attributable to the pre-cancellation profits or gains is such part of the amount otherwise applicable in the case of the holder of the licence as bears to the whole of the amount otherwise so applicable the same proportion as the proportion borne by the amount of the pre-cancellation profits or gains to the total amount of the relevant profits or gains.”

(6) After paragraph 8 of that Schedule, there shall be inserted the following paragraph—

“8A (1) For the purposes of paragraphs 4A and 7A above and this paragraph, profits or gains in respect of which an assessment is made as mentioned in paragraph 4(1)(a) or (b) above are profits or gains in respect of which any licence in question was the basis for the assessment if those profits or gains fall within paragraph 4(1)(a) or (b) by reference to that licence.

(2) In determining—

(a) for the purposes of paragraph 4A(2) or 7A(4) above, the amount of the profits or gains in erespect of which any licence was the basis for an assessment; or

(b) for the purposes of paragraph 7A(4) above, the amount of any pre-cancellation profits or gains;

the Board shall compute that amount as if for the purposes of making a separate assessment in respect of those profits or gains on the person on whom the assessment was made, making all such allocations and apportionments of receipts, expenses, allowances and deductions taken into account or made for the purposes of the actual assessment as appear to the Board to be just and reasonable in the circumstances.

(3) A notice under paragraph 4 above as it applies by virtue of paragraph 4A or 7A above shall give particulars of the manner in which the amount required to be paid was determined.

(4) References in paragraphs 4A, 7 and 7A above and in this paragraph to profits or gains include chargeable gains.”

(7) In section 3(4) of the Oil Taxation Act 1975 (items excluded from allowable expenditure under that section for any oil field)—

(a) the word “or" at the end of paragraph (d) shall be omitted; and

(b) after paragraph (e) there shall be inserted the following words—

“or

(f) any payment made in pursuance of a notice under paragraph 4 of Schedule 15 to the Finance Act 1973 (provisions supplementing the territorial extension of charge to tax under section 38 of that Act).”

(8) Schedule 15 to the Finance Act 1973 shall apply as modified by subsections (2) and (3) above in any case where a period of thirty days relevant for the purposes of the service of a notice under paragraph 4 of that Schedule in relation to any tax expires on or after 12th March 1984.

125 Local loans. U.K.

(1) For section 4 of the M27 National Loans Act 1968 (power to make local loans) there shall be substituted the following section—

“4 Limit for local loans.

(1) The aggregate of—

(a) any commitments of the Loan Commissioners outstanding in respect of undertakings entered into by them to grant local loans; and

(b) any amount outstanding in respect of the principal of any local loans;

shall not at any time exceed £28,000 million or such other (lower or higher) sum, not exceeding £35,000 million, as the Treasury may from time to time specify by order made by statutory instrument.

(2) No order shall be made under this section unless a draft of it has been laid before and approved by a resolution of the Commons House of Parliament.”

(2) In section 3 of that Act—

(a) in subsection (5), the words from “and" to “future Act" shall be omitted; and

(b) in subsection (11), for the words from the beginning to “those" there shall be substituted the words “ Subject to the limit in this Act, the Loan Commissioners may make loans of the descriptions ”.

Marginal Citations

M27 1968 c. 13.

126 Tax exemptions in relation to designated international organisations. U.K.

(1) Where—

(a) the United Kingdom or any of the Communities is a member of an international organisation; and

(b) the agreement under which it became a member provides for exemption from tax, in relation to the organisation, of the kind for which provision is made by this section; the Treasury may, by order made by statutory instrument, designate that organisation for the purposes of this section.

(2) Where an organisation has been so designated, the provisions mentioned in subsection (3) below shall, with the exception of any which may be excluded by the designation order, apply in relation to that organisation.

(3) The provisions are—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F46

(b) any security issued by the organisation shall be taken, for the purposes of capital transfer tax and capital gains tax, to be situated outside the United Kingdom; and

(c) no stamp duty shall be chargeable under the heading “ Bearer Instrument” in Schedule 1 to the Stamp Act 1891 on the issue of any instrument by the organisation or on the transfer of the stock constituted by, or transferable by means of, any instrument issued by the organisation.

[F47 (d) no stamp duty reserve tax shall be chargeable under section 93 (depositary receipts) or 96 (clearance services) of the Finance Act 1986 in respect of the issue of securities by the organisation.]

[F48 (4) The Treasury may, by order made by statutory instrument, designate any of the Communities or the European Investment Bank for the purposes of this section, and references in subsections (2) and (3) above to an organisation designated for the purposes of this section include references to a body so designated by virtue of this subsection.]

[F49 (5) Subsection (3) above, as it applies by virtue of subsection (4) above, shall be read as if the words “under the heading” “Bearer Instrument” in Schedule 1 to the Stamp Act 1891 were omitted]

Textual Amendments

F46 S. 126(3)(a) repealed by Income and Corporation Taxes Act 1988 (c. 1), s. 844, Sch. 31

F47 S. 126(3)(d) added by Finance Act 1990 s. 114(1)

F48 S. 126(4) inserted by Finance Act 1985 s. 96(1)

F49 S. 126(5) inserted by Finance Act 1985 s. 96(1)

Modifications etc. (not altering text)

C2 The Asian Development Bank so designated by S.I. 1984 No. 1215 and the African Development Bank by S.I. 1984 No. 1634

127 Special and General Commissioners. U.K.

(1) Schedule 22 to this Act shall have effect for the purpose of making provision in relation to the Special and General Commissioners.

(2) This section and Part XIII of Schedule 23 to this Act shall come into operation on such day as the Lord Chancellor may by order made by statutory instrument appoint, and different days may be so appointed for different provisions and for different purposes.

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

(1) This Act may be cited as the Finance Act 1984.

(2) In this Act “the Taxes Act” means the Income and Corporation Taxes Act [F50 1970 and “the Taxes Act 1988” means the Income and Corporation Taxes Act 1988].

(3) Part II 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 Capital Gains Tax Act 1979.

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F51

(5) Part V of this Act shall be construed as one with Part I of the Oil Taxation Act 1975 and references in Part V of this Act to the principal Act are references to that Act.

(6) The enactments specified in Schedule 23 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

F50 Words substituted by Income and Corporation Taxes Act 1988 (c. 1), Sch. 29 para. 32

F51 S. 128(4) repealed by Inheritance Tax Act 1984 (c. 51), ss. 274, 277, Schs. 7, 9