“(13)

Where an acquisition is made on or after 29th November 1994 section 164H shall be ignored in deciding whether it is an acquisition of a qualifying investment for the purposes of this section.”

“(2A)

In deciding for the purposes of subsection (2)(b) above whether a company is a qualifying company at a time falling on or after 29th November 1994 section 164H shall be ignored.”

“(4A)

In deciding whether a trade complies with this section at a time falling on or after 29th November 1994 paragraphs (g) and (h) of subsection (2) above shall be ignored.”

“(14)

This section is subject to sections 164FF and 164FG.”

“(10C)

Subsection (10A) above is subject to sections 164FF and 164FG.”

“164FF Qualifying investment acquired from husband or wife.

(1)

This section applies where—

(a)

a claim is made under subsection (2) of section 164A or subsection (10A) of section 164F; and

(b)

the qualifying investment as respects which the claim is made is acquired by a disposal to which section 58 applies.

(2)

The amounts by reference to which the reduction is determined shall be treated as including the amount of the consideration which the claimant would under this Act be treated as having given for the qualifying investment if he had, immediately upon acquiring the qualifying investment, disposed of it on a disposal which was not a no gain/no loss disposal.

(3)

Where—

(a)

the claimant makes a disposal, which is not a no gain/no loss disposal, of the qualifying investment, and

(b)

any disposal after 31st March 1982 and before he acquired the qualifying investment was a no gain/no loss disposal,

nothing in paragraph 1 of Schedule 3, section 35 or section 55 shall operate to defeat the reduction falling to be made under section 164A(2)(b) or, as the case may be, section 164F(10A)(b) in the consideration for the acquisition of the qualifying investment.

(4)

Where—

(a)

the claimant makes a disposal of the qualifying investment and that disposal is a disposal to which section 58 applies, and

(b)

any disposal after 31st March 1982 and before the claimant acquired the qualifying investment was a no gain/no loss disposal,

nothing in the application of paragraph 1 of Schedule 3, section 35 or section 55 to the person to whom the claimant makes the disposal of the qualifying investment shall operate to defeat the reduction made under section 164A(2)(b) or, as the case may be, section 164F(10A)(b).

(5)

For the purposes of this section a no gain/no loss disposal is one on which by virtue of any of the enactments specified in section 35(3)(d) neither a gain nor a loss accrues.”

“164FG Multiple claims.

(1)

This section applies where—

(a)

a reduction is claimed by a person as respects a qualifying investment under subsection (2) of section 164A or subsection (10A) of section 164F; and

(b)

any other reduction has been or is being claimed by that person under either subsection as respects that investment.

(2)

Subject to subsection (5) below, the reductions shall be treated as claimed separately in such sequence as the claimant elects or an officer of the Board in default of an election determines.

(3)

In relation to a later claim as respects the qualifying investment under either subsection, the subsection shall have effect as if each of the relevant amounts were reduced by the aggregate of any reductions made in the amount or value of the consideration for the acquisition of that investment by virtue of any earlier claims as respects that investment.

(4)

In subsection (3) above “the relevant amounts” means—

(a)

if the claim is under section 164A(2), the amounts referred to in subsection (2)(a)(ii) and (iii) and any amount required to be included by virtue of section 164FF(2); and

(b)

if the claim is under section 164F(10A), the amounts referred to in subsection (10A)(a)(i) and (ii) and any amount required to be included by virtue of section 164FF(2).

(5)

A claim that has become final shall be treated as made earlier than any claim that has not become final.

(6)

For the purposes of subsection (5) above, a claim becomes final when—

(a)

it may no longer be amended, or

(b)

it is finally determined,

whichever occurs first.”

“(2A)

Section 152 shall apply where—

(a)

the disposal is by a company which, at the time of the disposal, is a member of a group of companies,

(b)

the acquisition is by another company which, at the time of the acquisition, is a member of the same group, and

(c)

the claim is made by both companies,

as if both companies were the same person.

(2B)

Section 152 shall apply where a company which is a member of a group of companies but is not carrying on a trade—

(a)

disposes of assets (or an interest in assets) used, and used only, for the purposes of the trade which (in accordance with subsection (1) above) is treated as carried on by the members of the group which carry on a trade, or

(b)

acquires assets (or an interest in assets) taken into use, and used only, for those purposes,

as if the first company were carrying on that trade.

(2C)

Section 152 shall not apply if the acquisition of, or of the interest in, the new assets—

(a)

is made by a company which is a member of a group of companies, and

(b)

is one to which any of the enactments specified in section 35(3)(d) applies.”

“(5A)

Subsections (2A) and (2C) of section 175 shall apply in relation to this section as they apply in relation to section 152 (but as if the reference in subsection (2C) to the new assets were a reference to the new land).”

“(2A)

Where—

(a)

a company that has ceased to be a member of a group of companies (“the first group”) acquired an asset from another company which was a member of that group at the time of the acquisition,

(b)

subsection (2) above applies in the case of that company’s ceasing to be a member of the first group so that subsection (1) above does not have effect as respects the acquisition of that asset,

(c)

the company that made the acquisition subsequently ceases to be a member of another group of companies (“the second group”), and

(d)

there is a connection between the two groups,

subsection (1) above shall have effect in relation to the company’s ceasing to be a member of the second group as if it had been the second group of which both companies had been members at the time of the acquisition.

(2B)

For the purposes of subsection (2A) above there is a connection between the first group and the second group if, at the time when the chargeable company ceases to be a member of the second group, the company which is the principal company of that group is under the control of—

(a)

the company which is the principal company of the first group or, if that group no longer exists, which was the principal company of that group when the chargeable company ceased to be a member of it;

(b)

any company which controls the company mentioned in paragraph (a) above or which has had it under its control at any time in the period since the chargeable company ceased to be a member of the first group; or

(c)

any company which has, at any time in that period, had under its control either—

(i)

a company which would have fallen within paragraph (b) above if it had continued to exist, or

(ii)

a company which would have fallen within this paragraph (whether by reference to a company which would have fallen within that paragraph or to a company or series of companies falling within this sub-paragraph).”

“(9A)

Section 416(2) to (6) of the Taxes Act (meaning of control) shall have effect for the purposes of subsection (2B) above as it has effect for the purposes of Part XI of that Act; but a person carrying on a business of banking shall not for the purposes of that subsection be regarded as having control of any company by reason only of having, or of the consequences of having exercised, any rights of that person in respect of loan capital or debt issued or incurred by the company for money lent by that person to the company in the ordinary course of that business.”

(i)

is authorised to carry on long term business under section 3 or 4 of the M13Insurance Companies Act 1982; or

(ii)

carries on through a branch or agency in the United Kingdom the whole or any part of any long term business which it is authorised to carry on by an authorisation granted outside the United Kingdom for the purposes of the first long term insurance Directive;

and in paragraph (b) above “long term business” and “the first long term insurance Directive” have the same meanings as in that Act of 1982. ”

“(2)

The modifications are the following—

(a)

if, apart from paragraph 24, the old policy or any related policy (within the meaning of paragraph 17(2)(b)) of which account falls to be taken would have been a qualifying policy, that policy shall be assumed to have been a qualifying policy for the purposes of paragraph 17(2); and

(b)

if, apart from this paragraph, the new policy would be a qualifying policy, it shall not be such a policy unless the circumstances are as specified in paragraph 17(3); and

(c)

in paragraph 17(3)(c) the words “either by a branch or agency of theirs outside the United Kingdom or” shall be omitted;

and references in this sub-paragraph to being a qualifying policy shall have effect, in relation to any time before F17the appointed date, as including a reference to being capable of being certified as such a policy.”

“(12A)

In arriving at the relevant period for the purposes of sections 294 to 296 any time falling on or after 29th November 1994 shall be ignored; and subsection (12) above shall have effect subject to the preceding provisions of this subsection.”

“(5)

Subsection (2) above shall not apply where the reorganisation occurs on or after 29th November 1994.

(6)

Subsection (2) above shall not apply by virtue of subsection (3) above where the rights are disposed of on or after 29th November 1994.”

“151A Venture capital trusts: reliefs.

(1)

A gain or loss accruing to an individual on a qualifying disposal of any ordinary shares in a company which—

(a)

was a venture capital trust at the time when he acquired the shares, and

(b)

is still such a trust at the time of the disposal,

shall not be a chargeable gain or, as the case may be, an allowable loss.

(2)

For the purposes of this section a disposal of shares is a qualifying disposal in so far as—

(a)

it is made by an individual who has attained the age of eighteen years;

(b)

the shares disposed of were not acquired in excess of the permitted maximum for any year of assessment; and

(c)

that individual acquired those shares for bona fide commercial purposes and not as part of a scheme or arrangement the main purpose of which, or one of the main purposes of which, is the avoidance of tax.

(3)

Schedule 5C shall have effect for providing relief in respect of gains invested in venture capital trusts.

(4)

In determining for the purposes of this section whether a disposal by any person of shares in a venture capital trust relates to shares acquired in excess of the permitted maximum for any year of assessment, it shall be assumed (subject to subsection (5) below)—

(a)

as between shares acquired by the same person on different days, that those acquired on an earlier day are disposed of by that person before those acquired on a later day; and

(b)

as between shares acquired by the same person on the same day, that those acquired in excess of the permitted maximum are disposed of by that person before he disposes of any other shares acquired on that day.

(5)

It shall be assumed for the purposes of subsection (1) above that a person who disposes of shares in a venture capital trust disposes of shares acquired at a time when it was not such a trust before he disposes of any other shares in that trust.

(6)

References in this section to shares in a venture capital trust acquired in excess of the permitted maximum for any year of assessment shall be construed in accordance with the provisions of Part II of Schedule 15B to the Taxes Act; and the provisions of that Part of that Schedule shall apply (with subsections (4) and (5) above) for identifying the shares which are, in any case, to be treated as representing shares acquired in excess of the permitted maximum.

(7)

In this section and section 151B “ordinary shares”, in relation to a company, means any shares forming part of the company’s ordinary share capital (within the meaning of the Taxes Act).

151B Venture capital trusts: supplementary.

(1)

Sections 104, 105 and 107 shall not apply to any shares in a venture capital trust which are eligible for relief under section 151A(1).

(2)

Subject to the following provisions of this section, where—

(a)

an individual holds any ordinary shares in a venture capital trust,

(b)

some of those shares fall within one of the paragraphs of subsection (3) below, and

(c)

others of those shares fall within at least one other of those paragraphs,

then, if there is within the meaning of section 126 a reorganisation affecting those shares, section 127 shall apply separately in relation to the shares (if any) falling within each of the paragraphs of that subsection (so that shares of each kind are treated as a separate holding of original shares and identified with a separate new holding).

(3)

The kinds of shares referred to in subsection (2) above are—

(a)

any shares in a venture capital trust which are eligible for relief under section 151A(1) and by reference to which any person has been given or is entitled to claim relief under Part I of Schedule 15B to the Taxes Act;

(b)

any shares in a venture capital trust which are eligible for relief under section 151A(1) but by reference to which no person has been given, or is entitled to claim, any relief under that Part of that Schedule;

(c)

any shares in a venture capital trust by reference to which any person has been given, or is entitled to claim, any relief under that Part of that Schedule but which are not shares that are eligible for relief under section 151A(1); and

(d)

any shares in a venture capital trust that do not fall within any of paragraphs (a) to (c) above.

(4)

Where—

(a)

an individual holds ordinary shares in a company (“the existing holding”),

(b)

there is, by virtue of any such allotment for payment as is mentioned in section 126(2)(a), a reorganisation affecting the existing holding, and

(c)

immediately following the reorganisation, the shares or the allotted holding are shares falling within any of paragraphs (a) to (c) of subsection (3) above,

sections 127 to 130 shall not apply in relation to the existing holding.

(5)

Sections 135 and 136 shall not apply where—

(a)

the exchanged holding consists of shares falling within paragraph (a) or (b) of subsection (3) above; and

(b)

that for which the exchanged holding is or is treated as exchanged does not consist of ordinary shares in a venture capital trust.

(6)

Where—

(a)

the approval of any company as a venture capital trust is withdrawn, and

(b)

the withdrawal of the approval is not one to which section 842AA(8) of the Taxes Act applies,

any person who at the time when the withdrawal takes effect is holding shares in that company which (apart from the withdrawal) would be eligible for relief under section 151A(1) shall be deemed for the purposes of this Act, at that time, to have disposed of and immediately re-acquired those shares for a consideration equal to their market value at that time.

(7)

The disposal that is deemed to take place by virtue of subsection (6) above shall be deemed for the purposes of section 151A to take place while the company is still a venture capital trust; but, for the purpose of applying sections 104, 105 and 107 to the shares that are deemed to be re-acquired, it shall be assumed that the re-acquisition for which that subsection provides takes place immediately after the company ceases to be such a trust.

(8)

For the purposes of this section—

(a)

shares are eligible for relief under section 151A(1) at any time when they are held by an individual whose disposal of the shares at that time would (on the assumption, where it is not the case, that the individual attained the age of eighteen years before that time) be a disposal to which section 151A(1) would apply; and

(b)

shares shall not, in relation to any time, be treated as shares by reference to which relief has been given under Part I of Schedule 15B to the Taxes Act if that time falls after—

(i)

any relief given by reference to those shares has been reduced or withdrawn,

(ii)

any chargeable event (within the meaning of Schedule 5C) has occurred in relation to those shares, or

(iii)

the death of a person who held those shares immediately before his death;

and

(c)

the references, in relation to sections 135 and 136, to the exchanged holding is a reference to the shares in company B or, as the case may be, to the shares or debentures in respect of which shares or debentures are issued under the arrangement in question.”

“and the disposal is not one in relation to which section 151A(1) has effect.”

““venture capital trust” has the meaning given by section 842AA of the Taxes Act;”.

“51B Periodic accounting for tax on interest on gilt-edged securities.

(1)

The Treasury may by regulations provide for persons to whom payments of interest on relevant gilt-edged securities are made without deduction of tax to be required to make periodic returns to an officer of the Board of—

(a)

amounts of any payments of such interest made to that person, and

(b)

amounts of tax for which, assuming the payments to bear tax at the basic rate for the relevant year of assessment, that person is to be accountable under the regulations in respect of those payments;

and any such regulations may further provide for the amounts of tax required to be included in any such return to become due, at the time when the return is required to be made, from the person required to make it.

(2)

Regulations made by the Treasury for the purposes of this section may—

(a)

specify such periods as the Treasury may consider appropriate as the periods for which returns are to be made, and in respect of which any person is to account for tax, under the regulations;

(b)

make provision for enabling returns under the regulations to be combined with returns under Schedule 16 and for requiring particulars of claims and calculations made for the purposes of the regulations to be set out in the returns;

(c)

provide, in respect of any period for which a return is to be made by any person under the regulations, for that person to be obliged, before the end of the period, to make a payment on account of amounts that may become due from him in respect of that period;

(d)

impose a requirement for a special return to be made for the purposes of any obligation imposed by virtue of paragraph (c) above;

(e)

provide for the amount which, under the regulations, is to be due from any person in respect of any period to be reduced by reference to amounts which—

(i)

are paid by or on behalf of that person under contracts or arrangements relating to transfers of gilt-edged securities; and

(ii)

are or fall to be treated as representative of interest on those securities;

(f)

authorise amounts in respect of which there is an obligation to account for tax under the regulations to be treated for specified purposes of the Tax Acts as payments on which a person has borne income tax by deduction;

(g)

make provision for the assessment of amounts due under the regulations and for the repayment in specified circumstances of amounts paid under the regulations;

(h)

make provision for interest to be payable, at such rate as may be determined by or under the regulations, on amounts that have become due under the regulations but have not been paid;

(i)

make provision, where payments of interest on any relevant gilt-edged securities would be comprised in the income of a member of Lloyd’s, for obligations that may be imposed by regulations under this section on the person to whom the interest is paid to be imposed, instead, on such other person as may be described in the regulations.

(3)

Regulations made by the Treasury for the purposes of this section may—

(a)

include provision which for the purposes of the regulations makes any provision corresponding, with or without modifications, to any of the provisions of Schedule 16;

(b)

make provision modifying the operation of Schedule 19AB in relation to cases where payments of interest on relevant gilt-edged securities are made without deduction of tax to companies carrying on pension business;

(c)

include provision which requires obligations and liabilities under the regulations to be treated as obligations and liabilities to which provisions of Schedule 23 to the Finance Act 1995 (UK representatives) apply; and

(d)

include provision which, for any of the purposes of the regulations, applies provisions of sections 126 and 127 of, and Schedule 23 to, that Act in relation to times before those provisions otherwise come into force.

(4)

Regulations made by the Treasury for the purposes of this section may—

(a)

make different provision for different cases; and

(b)

contain such supplementary, incidental, consequential and transitional provision as appears to the Treasury to be appropriate;

and subsection (3) of section 178 of the M17Finance Act 1989 (extent of powers to set rates of interest) shall apply for the purposes of the power conferred by virtue of subsection (2)(h) above as it applies for the purposes of the power to make regulations under that section.

(5)

In this section “relevant gilt-edged securities” means securities which are gilt-edged securities within the meaning of section 51A, other than any to which a direction of the Treasury under section 50 relates.

(6)

In this section “relevant year of assessment”—

(a)

in relation to a manufactured payment, means the year of assessment in which it is received by the person to whom it is paid; and

(b)

in relation to any other payment of interest, means the year of assessment in which the payment is made;

and in this subsection “manufactured payment” means any payment which for the purposes of Schedule 23A is a payment of manufactured interest.”

“regulations under section 51B;”.

“(5A)

This section shall not apply where section 737A applies; and this section shall be disregarded in determining whether the condition in subsection (2)(b) of that section is fulfilled in any case.”

“263A Agreements for sale and repurchase of securities.

(1)

Subject to subsections (2) to (4) below, in any case falling within subsection (1) of section 730A of the Taxes Act (treatment of price differential on sale and repurchase of securities) and in any case which would fall within that subsection if the sale price and the repurchase price were different—

(a)

the acquisition of the securities in question by the interim holder and the disposal of those securities by him to the repurchaser, and

(b)

except where the repurchaser is or may be different from the original owner, the disposal of those securities by the original owner and any acquisition of those securities by the original owner as the repurchaser,

shall be disregarded for the purposes of capital gains tax.

(2)

Subsection (1) above does not apply in any case where the repurchase price of the securities in question falls to be calculated for the purposes of section 730A of the Taxes Act by reference to provisions of section 737C of that Act that are not in force in relation to those securities when the repurchase price becomes due.

(3)

Subsection (1) above does not apply if—

(a)

the agreement or agreements under which provision is made for the sale and repurchase are not such as would be entered into by persons dealing with each other at arm’s length; or

(b)

any of the benefits or risks arising from fluctuations, before the repurchase takes place, in the market value of the securities sold accrues to, or falls on, the interim holder.

(4)

Subsection (1) above does not apply in relation to any disposal or acquisition of qualifying corporate bonds in a case where the securities disposed of by the original owner or those acquired by him, or by any other person, as the repurchaser are not such bonds.

(5)

Expressions used in this section and in section 730A of the Taxes Act have the same meanings in this section as in that section.”

“(ca)

for modifying the application of this Chapter in relation to cases where assets forming part of a premiums trust fund are the subject of—

(i)

any such arrangement as is mentioned in section 129(1), (2) or (2A) of the Taxes Act 1988 (stock lending etc.); or

(ii)

any such arrangements or agreements as are mentioned in section 737E(2) and (8) of the Taxes Act 1988 (sale and repurchase of securities etc.);”.

“62A Application of sections 63 to 66: supplementary.

In sections 63 to 66 below as they apply by virtue of section 61 above—

(a)

“the creditor company” means the company identified in subsection (1) of that section as the person entitled to the debt (referred to there as “the resident company”); and

(b)

“the commencement date” means 1st April 1993.”.

“(1A)

In a case where—

(a)

a trade is set up and commenced by a company, and

(b)

it is not set up and commenced before 6th April 1994,

sections 213(4) and (8) and 214(4) and (6) have effect only if it is set up and commenced on or after 6th April 1995.”

“(9)

For the purposes of this Act the relevant trustees of a settlement are—

(a)

in relation to income, the persons who are trustees when the income arises and any persons who subsequently become trustees; and

(b)

in relation to chargeable gains, the persons who are trustees in the year of assessment in which the chargeable gains accrue and any persons who subsequently become trustees.”

“(5)

The following references, namely—

(a)

references in section 9 or 28C of this Act to a person to whom a notice has been given under this section being chargeable to tax; and

(b)

references in section 29 of this Act to such a person being assessed to tax,

shall be construed as references to the relevant trustees of the settlement being so chargeable or, as the case may be, being so assessed.”

“ Settlements

107A Relevant trustees.

(1)

Subject to the following provisions of this section, anything which for the purposes of this Act is done at any time by or in relation to any one or more of the relevant trustees of a settlement shall be treated for those purposes as done at that time by or in relation to the other or others of those trustees.

(2)

Subject to subsection (3) below, where the relevant trustees of a settlement are liable—

(a)

to a penalty under section 7, 12B, 93, 95 or 97AA of this Act or paragraph 2A of Schedule 1A to this Act, or to interest under section 103A of this Act on such a penalty;

(b)

to make a payment in accordance with an assessment under section 30 of this Act, or to make a payment under section 59A or 59B of this Act;

(c)

to a surcharge under section 59C of this Act, or to interest under that section on such a surcharge; or

(d)

to interest under section 86 of this Act,

the penalty, interest, payment or surcharge may be recovered (but only once) from any one or more of those trustees.

(3)

No amount may be recovered by virtue of subsection (2)(a) or (c) above from a person who did not become a relevant trustee until after the relevant time, that is to say—

(a)

in relation to so much of a penalty under section 93(3) or 97AA(1)(b) of this Act as is payable in respect of any day, or to interest under section 103A of this Act on so much of such a penalty as is so payable, the beginning of that day;

(b)

in relation to a penalty under any other provision of this Act mentioned in subsection (2)(a) above, or to interest under section 103A of this Act on such a penalty, the time when the relevant act or omission occurred; and

(c)

in relation to a surcharge under subsection (2) or (3) of section 59C of this Act, or to interest under that section on such a surcharge, the beginning of the day mentioned in that subsection;

and in paragraph (b) above “the relevant act or omission” means the act or omission which caused the penalty to become payable.

(4)

In a case where—

(a)

subsection (2)(a) above applies in relation to a penalty under section 93 of this Act, or

(b)

subsection (2)(c) above applies in relation to a surcharge under section 59C of this Act,

subsection (8) of section 93 or, as the case may be, subsection (9) of section 59C of this Act shall have effect as if the reference to the taxpayer were a reference to each of the relevant trustees.”

““the relevant trustees”, in relation to a settlement, shall be construed in accordance with section 7(9) of this Act.”

“(5)

In this section and sections 8A, 9 and 12AA of this Act, any reference to income tax deducted at source is a reference to income tax deducted or treated as deducted from any income or treated as paid on any income.”

“(a)

on the basis of the information contained in the return; and

(b)

taking into account any relief, allowance or repayment of tax a claim for which is included in the return and giving credit for any income tax deducted at source and any tax credit to which section 231 of the principal Act applies,”.

“(a)

on the basis of the information contained in the return; and

(b)

taking into account any relief, allowance or repayment of tax a claim for which is included in the return,”.

“(1)

Where a trade, profession or business is carried on by two or more persons in partnership, for the purpose of facilitating the establishment of the following amounts, namely—

(a)

the amount in which each partner chargeable to income tax for any year of assessment is so chargeable, and

(b)

the amount in which each partner chargeable to corporation tax for any period is so chargeable,

an officer of the Board may act under subsection (2) or (3) below (or both).

(1A)

The amounts referred to in paragraphs (a) and (b) of subsection (1) above are net amounts, that is to say, amounts which—

(a)

take into account any relief, allowance or repayment of tax for which a claim is made; and

(b)

in the case of the amount referred to in paragraph (a) of that subsection, give credit for any income tax deducted at source and any tax credit to which section 231 of the principal Act applies.”

“(1)

Every return under section 12AA of this Act shall include a statement (a partnership statement) of the following amounts, namely—

(a)

in the case of each period of account ending within the period in respect of which the return is made—

(i)

the amount of income or loss from each source which, on the basis of the information contained in the return and taking into account any relief or allowance a section 42(7) claim for which is included in the return, has accrued to or has been sustained by the partnership for that period,

(ii)

each amount of income tax which, on that basis, has been deducted or treated as deducted from any income of the partnership, or treated as paid on any such income, for that period,

(iii)

the amount of each tax credit which, on that basis, has accrued to the partnership for that period, and

(iv)

the amount of each charge which, on that basis, was a charge on the income of the partnership for that period; and

(b)

in the case of each such period and each of the partners, the amount which, on that basis and (where applicable) taking into account any such relief or allowance, is equal to his share of that income, loss, tax, credit or charge.”

““section 42(7) claim” means a claim under any of the provisions mentioned in section 42(7) of this Act;

“tax credit” means a tax credit to which section 231 of the principal Act applies.”

“(b)

preserve those records until the end of the relevant day, that is to say, the day mentioned in subsection (2) below or, where a return is required by a notice given on or before that day, whichever of that day and the following is the latest, namely—

(i)

where enquiries into the return or any amendment of the return are made by an officer of the Board, the day on which, by virtue of section 28A(5) or 28B(5) of this Act, those enquiries are treated as completed; and

(ii)

where no enquiries into the return or any amendment of the return are so made, the day on which such an officer no longer has power to make such enquiries.”

“(2A)

Any person who—

(a)

is required, by such a notice as is mentioned in subsection (1) above given at any time after the end of the day mentioned in subsection (2) above, to make and deliver a return for a year of assessment or other period; and

(b)

has in his possession at that time any records which may be requisite for the purpose of enabling him to make and deliver a correct and complete return for the year or period,

shall preserve those records until the end of the relevant day, that is to say, the day which, if the notice had been given on or before the day mentioned in subsection (2) above, would have been the relevant day for the purposes of subsection (1) above.”

“(5A)

Subsection (5) above does not apply where the records which the person fails to keep or preserve are records which might have been requisite only for the purposes of claims, elections or notices which are not included in the return.”

“15 Return of employees’ emoluments etc.

(1)

Every employer, when required to do so by notice from an officer of the Board, shall, within the time limited by the notice, prepare and deliver to the officer a return relating to persons who are or have been employees of his, containing the information required under the following provisions of this section.

(2)

An employer shall not be required to include in his return information relating to any year of assessment if the notice is given more than five years after the 31st January next following that year.

(3)

A notice under subsection (1) above—

(a)

shall specify the employees for whom a return is to be made and may, in particular, specify individuals (by name or otherwise) or all employees of an employer or all his employees who are or have been in employment to which Chapter II of Part V of the principal Act applies; and

(b)

shall specify the years of assessment or other periods with respect to which the information is to be provided.

(4)

A notice under subsection (1) above may require the return to state the name and place of residence of an employee to whom it relates.

(5)

A notice under subsection (1) above may require the return to contain, in respect of an employee to whom it relates, the following particulars—

(a)

in the case of relevant payments made by the employer, particulars of the payments;

(b)

in the case of relevant payments not falling within paragraph (a) above the making of which by another person has been arranged by the employer—

(i)

particulars of the payments; and

(ii)

the name and business address of the other person; and

(c)

in the case of relevant payments not falling within either of the preceding paragraphs, the name and business address of any person who has, to the employer’s knowledge, made the payments.

(6)

Any payments made to an employee in respect of his employment are relevant payments for the purposes of this section, including—

(a)

payments to him in respect of expenses (including sums put at his disposal and paid away by him);

(b)

payments made on his behalf and not repaid; and

(c)

payments to him for services rendered in connection with a trade or business, whether the services were rendered in the course of his employment or not.

(7)

Where, for the purposes of his return, an employer apportions expenses incurred partly in or in connection with a particular matter and partly in or in connection with other matters—

(a)

the return shall contain a statement that the sum included in the return is the result of such an apportionment; and

(b)

if required to do so by notice from an officer of the Board, the employer shall prepare and deliver to the officer, within the time limited by the notice, a return containing full particulars as to the amount apportioned and the manner in which, and the grounds on which, the apportionment has been made.

(8)

A notice under subsection (1) above may require the return—

(a)

to state in respect of an employee to whom it relates whether any benefits are or have been provided for him (or for any other person) by reason of his employment, such as may give rise to charges to tax under the relevant sections, that is to say, sections 141, 142, 143, 144A, 145, 146 and 154 to 165 of the principal Act (miscellaneous benefits in cash or in kind); and

(b)

if such benefits are or have been provided, to contain such particulars of those benefits as may be specified in the notice.

(9)

Where such benefits are provided the notice may, without prejudice to subsection (8)(b) above, require the return to contain the following particulars—

(a)

in the case of benefits which are or have been provided by the employer, particulars of the amounts which may be chargeable to tax by virtue of the relevant sections;

(b)

in the case of benefits not falling within paragraph (a) above the provision of which by another person is or has been arranged by the employer—

(i)

particulars of the amounts which may be so chargeable; and

(ii)

the name and business address of the other person; and

(c)

in the case of benefits not falling within either of the preceding paragraphs, the name and business address of any person who has, to the employer’s knowledge, provided the benefits.

(10)

Where it appears to an officer of the Board that a person has, in any year of assessment, been concerned in making relevant payments to, or providing benefits to or in respect of, employees of another, the officer may at any time up to five years after the 31st January next following that year by notice require that person—

(a)

to deliver to the officer, within the time limited by the notice, such particulars of those payments or benefits, or of the amounts which may be chargeable to tax in respect of the benefits, as may be specified in the notice (so far as known to him); and

(b)

to include with those particulars the names and addresses (so far as known to him) of the employees concerned.

(11)

In determining, in pursuance of a notice under subsection (1) or (10) above, amounts which may be chargeable to tax by virtue of the relevant sections, a person—

(a)

shall not make—

(i)

any deduction or other adjustment which he is unable to show, by reference to information in his possession or otherwise available to him, is authorised or required by the relevant sections; or

(ii)

any deduction authorised by section 141(3), 142(2), 145(3) or 156(8) of the principal Act; but

(b)

subject to that, shall make all such deductions and other adjustments as may be authorised or required by the relevant sections.

(12)

Where the employer is a body of persons, the secretary of the body or other officer (by whatever name called) performing the duties of secretary shall be treated as the employer for the purposes of this section.

Where the employer is a body corporate, that body corporate, as well as the secretary or other officer, shall be liable to a penalty for failure to comply with this section.

(13)

In this section—

“arranged” includes guaranteed and in any way facilitated;

“employee” means an office holder or employee whose emoluments fall to be assessed under Schedule E, and related expressions are to be construed accordingly;

“relevant payments” has the meaning given by subsection (6) above; and

“the relevant sections” has the meaning given by subsection (8)(a) above.”

“(1A)

Subject to subsection (3) below, a claim for a relief, an allowance or a repayment of tax shall be for an amount which is quantified at the time when the claim is made.”

“(3A)

Where a person makes a claim requiring relief for a loss incurred or treated as incurred, or a payment made, in one year of assessment (“the later year”) to be given in an earlier year of assessment (“the earlier year”)—

(a)

subsection (2) above shall not apply in relation to the claim;

(b)

the claim shall be made in relation to the later year;

(c)

the claim shall be for an amount equal to the difference between—

(i)

the amount in which he has been assessed to tax under section 9 of this Act for the earlier year; and

(ii)

the amount in which he would have been so assessed if the claim could have been, and had been, included in a return made under section 8 or 8A of this Act for that year; and

(d)

effect shall be given to the claim in relation to the later year, whether by repayment or set-off, or by an addition to the aggregate amount given by section 59B(1)(b) of this Act, or otherwise.

(3B)

Where no notice under section 8 or 8A of this Act has been given to the person for the earlier year, subsection (3A)(c) above shall have effect as if—

(a)

sub-paragraph (i) referred to the amount in which he would have been assessed to tax under section 9 of this Act for that year if such a notice had been so given; and

(b)

sub-paragraph (ii) referred to the amount in which he would have been so assessed if such a notice had been so given and the claim could have been, and had been, included in a return made under section 8 or 8A of this Act for that year.”

“(4A)

Subsection (4) above shall not apply where—

(a)

the company is wholly exempt from corporation tax or is only not so exempt in respect of trading income; and

(b)

the tax credit is not one in respect of which a payment on account may be claimed by the company under Schedule 19AB to the principal Act.”

“86 Interest on overdue income tax and capital gains tax.

(1)

The following, namely—

(a)

any amount on account of income tax which becomes due and payable in accordance with section 59A(2) of this Act, and

(b)

any income tax or capital gains tax which becomes due and payable in accordance with section 55 or 59B of this Act,

shall carry interest at the rate applicable under section 178 of the M32Finance Act 1989 from the relevant date until payment.

(2)

For the purposes of subsection (1)(a) above the relevant date is whichever of the dates mentioned in section 59A(2) of this Act is applicable; and for the purposes of subsection (1)(b) above the relevant date is—

(a)

in any such case as is mentioned in subsection (3) of section 59B of this Act, the last day of the period of three months mentioned in that subsection; and

(b)

in any other case, the date mentioned in subsection (4) of that section.

(3)

Subsection (1) above applies even if the relevant date is a non-business day within the meaning of section 93 of the M33Bills of Exchange Act 1882.

(4)

Subsection (5) below applies where as regards a year of assessment—

(a)

any person makes a claim under subsection (3) or (4) of section 59A of this Act in respect of the amounts (the section 59A amounts) payable by him in accordance with subsection (2) of that section, and

(b)

an amount (the section 59B amount) becomes payable by him in accordance with section 59B(3), (4) or (5) of this Act.

(5)

Interest shall be payable under this section as if each of the section 59A amounts had been equal to—

(a)

the aggregate of that amount and 50 per cent. of the section 59B amount, or

(b)

the amount which would have been payable in accordance with subsection (2) of section 59A of this Act if the claim under subsection (3) or (4) of that section had not been made,

whichever is the less.

(6)

In determining for the purposes of subsections (4) and (5) above what amount (if any) is payable by any person in accordance with section 59B(3), (4) or (5) of this Act—

(a)

it shall be assumed that both of the section 59A amounts have been paid, and

(b)

no account shall be taken of any amount which has been paid on account otherwise than under section 59A(2) of this Act or is payable by way of capital gains tax.

(7)

Subsection (8) below applies where as regards any person and a year of assessment—

(a)

amounts (the section 59A amounts) become payable by him in accordance with section 59A(2) of this Act, and

(b)

an amount (the section 59B amount) becomes repayable to him in accordance with section 59B (3), (4) or (5) of this Act.

(8)

So much of any interest payable under this section on either of the section 59A amounts as is not attributable to the amount by which that amount exceeds 50 per cent. of the section 59B amount shall be remitted.

(9)

In determining for the purposes of subsections (7) and (8) above what amount (if any) is repayable to any person in accordance with section 59B(3), (4) or (5) of this Act, no account shall be taken of any amount which has been paid on account otherwise than under section 59A(2) of this Act or is payable by way of capital gains tax.”

“374A Interest which never has been relevant loan interest etc.

(1)

This section applies where, in the case of any loan, interest on the loan never has been relevant loan interest or the borrower never has been a qualifying borrower.

(2)

Without prejudice to subsection (3) below, in relation to a payment of interest—

(a)

as respects which either of the conditions mentioned in paragraphs (a) and (b) of section 374(1) is fulfilled, and

(b)

from which a deduction was made as mentioned in section 369(1),

section 369 shall have effect as if the payment of interest were a payment of relevant loan interest made by a qualifying borrower.

(3)

Nothing in subsection (2) above shall be taken as regards the borrower as entitling him to make any deduction or to retain any amount deducted and, accordingly, where any amount has been deducted, he shall be liable to make good that amount and an officer of the Board may make such assessments as may in his judgment be required for recovering that amount.

(4)

The Management Act shall apply to an assessment under subsection (3) above as if it were an assessment to income tax for the year of assessment in which the deduction was made and as if—

(a)

the assessment were among those specified in section 55(1) of that Act (recovery of tax not postponed);

(b)

the assessment were made for the purpose of making good to the Crown a loss of tax wholly attributable to such a failure or error as is mentioned in subsection (1) of section 88 of that Act (interest on tax recovered to make good loss due to taxpayer’s fault); and

(c)

for the purposes of that section the date when the tax ought to have been paid were the 1st December following the year of assessment.

(5)

If the borrower fraudulently or negligently makes any false statement or representation in connection with the making of any deduction, he shall be liable to a penalty not exceeding the amount deducted.”

“(aa)

as respects which any of the conditions mentioned in section 374(1) is fulfilled, and”.

“(4)

The Management Act shall apply to an assessment under subsection (3) above as it applies, by virtue of subsection (4) of section 374A, to an assessment under subsection (3) of that section.

(4A)

If there is any unreasonable delay in the giving of a notice under subsection (1) above, the borrower shall be liable to a penalty not exceeding so much of the aggregate amount that he is liable to make good under subsection (3) above as is attributable to that delay.”

“(8A)

In any case where an amount to which a person is not entitled is paid to him by the Board in pursuance of regulations made by virtue of subsection (8) above, regulations may—

(a)

provide for an officer of the Board to make such assessments as may in his judgment be required for recovering that amount from that person; and

(b)

make provision corresponding to that made by subsection (4A) above and subsections (4) and (5) of section 374A.”

“(2A)

A loss accruing to a person in a year of assessment shall not be an allowable loss for the purposes of this Act unless, in relation to that year, he gives a notice to an officer of the Board quantifying the amount of that loss; and sections 42 and 43 of the Management Act shall apply in relation to such a notice as if it were a claim for relief.”

“(1)

Subject to subsection (3) below, capital gains tax chargeable in respect of chargeable gains accruing to the trustees of a settlement or capital gains tax due from the personal representatives of a deceased person may be assessed and charged on and in the name of any one or more of the relevant trustees or the relevant personal representatives.”

“(3)

Where section 80 applies as regards the trustees of a settlement (“the migrating trustees”), nothing in subsection (1) above shall enable any person—

(a)

who ceased to be a trustee of the settlement before the end of the relevant period, and

(b)

who shows that, when he ceased to be a trustee of the settlement, there was no proposal that the trustees might become neither resident nor ordinarily resident in the United Kingdom,

to be assessed and charged to any capital gains tax which is payable by the migrating trustees by virtue of section 80(2).

(4)

In this section—

“the relevant period” has the same meaning as in section 82;

“the relevant trustees”, in relation to any chargeable gains, means the trustees in the year of assessment in which the chargeable gains accrue and any subsequent trustees of the settlement, and “the relevant personal representatives” has a corresponding meaning.”

“(l)

any exceptional items which fall within sub-paragraph (6A) below and should in accordance with any accounting practices regarded as standard be shown separately on the face of the profit and loss account.”

“(6A)

The items are—

(a)

profits or losses on the sale or termination of an operation;

(b)

costs of a fundamental reorganisation or restructuring having a material effect on the nature and focus of the employment unit’s operations;

(c)

profits or losses on the disposal of fixed assets; and

(d)

the effect on tax of any of the items mentioned in paragraphs (a) to (c) above.”

“19A

(1)

The Treasury may by order amend paragraph 19 above so as to add to, delete or vary any of the items mentioned in sub-paragraph (6) of that paragraph.

(2)

In this paragraph references to an order are references to an order under sub-paragraph (1) above.

(3)

Subject to sub-paragraphs (4) to (8) below, any amendment or amendments made by virtue of an order shall have effect in relation to the preparation, for the purposes of a scheme, of a profit and loss account in respect of a period beginning on or after the day on which the order comes into force.

(4)

Any amendment or amendments made by virtue of an order shall not have effect in relation to an existing scheme unless, before the end of the period of 6 months beginning with the day on which the order comes into force, the scheme is altered to take account of the amendment or amendments.

(5)

Sub-paragraphs (6) to (8) below apply where, before the end of the period mentioned in sub-paragraph (4) above, an existing scheme is altered as mentioned in that sub-paragraph.

(6)

The provision made by the scheme in compliance with paragraph 20(1) below shall not prevent a profit and loss account being prepared in accordance with the alteration.

(7)

Where the distributable pool would but for this sub-paragraph be determined by reference—

(a)

to an amount shown in a profit and loss account prepared in accordance with the altered scheme, and

(b)

to an amount shown in a profit and loss account (“an earlier account”) prepared in accordance with the scheme in a form in which it stood before the alteration,

then, for the purposes of the determination of the pool, the amount shown in the earlier account shall be recalculated using the same method as that used to calculate the amount mentioned in paragraph (a) above.

(8)

The alteration of the existing scheme shall be treated as being within subsection (8) of section 177B.

(9)

An order may include such supplementary, incidental or consequential provisions as appear to the Treasury to be necessary or expedient.

(10)

In this paragraph “an existing scheme”, in relation to an order, means a scheme which, immediately before the day on which the order comes into force, is a registered scheme.”

“(2)

The arrangements must be such as to secure that—

(a)

any income arising to the trustee or trustees of the special reserve fund shall be added to the capital of the fund and held on the same trusts as the fund; and

(b)

except as required or permitted by this Schedule, no payments shall be made into or out of the special reserve fund.”