Finance (No. 2) Act 1997

Part II U.K. Income tax and corporation tax

(1) Relief for mortgage interest payments

Chapter	Short title	Extent of repeal
1988 c. 1.	The Income and Corporation Taxes Act 1988.	In section 353(1G), the words after paragraph (b).
		In section 369(1A), the words after paragraph (b).

These repeals have effect in accordance with section 15 of this Act.

(2) Medical insurance relief

Chapter	Short title	Extent of repeal
1989 c. 26.	The Finance Act 1989.	Sections 54 to 57.
1994 c. 9.	The Finance Act 1994.	Section 83.
		Schedule 10.
1996 c. 8.	The Finance Act 1996.	In section 129—
		(a) paragraph (a) of subsection (1);
		(b) in subsection (2), the words “section 54(6)(b) of the 1989 Act and”; and
		(c) subsections (3) and (5).
		In Schedule 18—
		(a) paragraph 12; and
		(b) in paragraph 17, the words “12(2)(a) and (b)” and “12(2)(c) and (3)” wherever occurring and the words “12(2)(d)” in sub-paragraph (8).

These repeals have effect for the year 1997-98 and subsequent years of assessment except in relation to the cases in which the relief that has been or may be given under section 54 of the Finance Act 1989 in respect of any payment is unaffected by the provisions of section 17(1) of this Act.

(3) Corporation tax rates

Chapter	Short title	Extent of repeal
1997 c. 16.	The Finance Act 1997.	Section 58.
		Section 59(a).

(4) Taxation of distributions: surplus franked investment income

Chapter	Short title	Extent of repeal
1988 c. 1.	The Income and Corporation Taxes Act 1988.	In section 6(4), the words “242, 243”.
		In section 75(5), the words “or against a decision on a claim under section 242”.
		Sections 242 to 244.
		In section 704, in paragraph A, sub-paragraph (e).
		Section 825(4)(d).
		Section 826(7B).
1990 c. 1.	The Capital Allowances Act 1990.	In Schedule 1, paragraph 8(11).
1991 c. 31.	The Finance Act 1991.	In Schedule 15, paragraphs 5 and 6.
1993 c. 34.	The Finance Act 1993.	In section 78, subsections (8) to (10), and in subsection (11) the words from “but this subsection” to the end.
1995 c. 4.	The Finance Act 1995.	In Schedule 8, in paragraph 18, sub-paragraphs (7) and (8).
1996 c. 8.	The Finance Act 1996.	In Schedule 14, paragraph 12.
1997 c. 16.	The Finance Act 1997.	Section 71.

These repeals have effect in accordance with section 20 of this Act (and, accordingly, the repeal of subsection (7B) of section 826 of the Income and Corporation Taxes Act 1988 has effect only where the earlier period mentioned in that subsection begins on or after 2nd July 1997).

(5) Lloyd’s underwriters

Chapter	Short title	Extent of repeal
1993 c. 34.	The Finance Act 1993.	In paragraph 13 of Schedule 19—
		(a) in sub-paragraph (1), paragraph (b) and the word “or” immediately preceding it;
		(b) in sub-paragraph (3), the words “or paid” and, in paragraph (a), the words “or (as the case may be) that part of that income which includes the “qualifying distribution”;”
		(c) sub-paragraph (3A); and
		(d) sub-paragraph (4A).
1994 c. 9.	The Finance Act 1994.	In section 219(4), the words “(and any associated tax credits)”.
		In section 221(2), paragraph (b), and paragraph (d) and the word “and” immediately preceding it.
		In Schedule 21, paragraph 11.

These repeals have effect in relation to distributions made on or after 2nd July 1997.

(6) Insurance companies and friendly societies: repeals other than those relating to self-assessment

Chapter	Short title	Extent of repeal
1988 c. 1.	The Income and Corporation Taxes Act 1988.	In section 76(8), the definition of “relevant franked investment income”.
		In section 432E(6), paragraph (b) and the word “and” immediately preceding it.
		In section 434, in subsection (3), the words from “but it may be the subject of a claim” onwards, and, in subsection (8), the words from “or by payment of tax credit” onwards.
		Section 434A(1).
		In section 436(3), paragraphs (d) and (e).
		In section 438, subsections (3), (3AA), (5) to (7) and (9).
		Section 439B(7).
		Section 440B(1A) and (2).
		Section 441A(1).
		In paragraph 1 of Schedule 19AB—
		(a) in sub-paragraph (1), the words “the aggregate of”, and paragraph (b) and the word “and” immediately preceding it;
		(b) in sub-paragraph (7), the words “paid or”, paragraph (b) and the word “and” immediately preceding it, and the words “or in section 42(5A) of the Management Act”;
		(c) sub-paragraph (8); and
		(d) in sub-paragraph (10), the words “and payments of tax credits” and “or in section 42(5A) of the Management Act”.
		In Schedule 19AC, paragraph 2, in paragraph 5(1), the notionally inserted section 76(6B), in paragraph 5B, sub-paragraphs (1) to (3), and paragraphs 9A, 10, 10A, 11A(1), 12(1) and 15(1).
1989 c. 26.	The Finance Act 1989.	In section 89, in subsection (2), paragraph (a) and, in paragraph (b), the words “other unrelieved”, and subsection (8).
1990 c. 29.	The Finance Act 1990.	Section 45(9).
		In Schedule 6, paragraph 5.
1994 c. 9.	The Finance Act 1994.	In Schedule 16, paragraph 6.
1995 c. 4.	The Finance Act 1995.	In Schedule 8, paragraphs 19(2), 28(2), 29, 35(2), 36, 41, 43 and 47.
1996 c. 8.	The Finance Act 1996.	Section 164(2)(b) and (3)(a).
		In Schedule 14, paragraph 51.
		In Schedule 27, paragraph 5.
		In Schedule 34, paragraphs 1(7) and 5(2).

Except for the repeals in Schedule 34 to the Finance Act 1996, these repeals have effect in accordance with the provisions of Schedule 3 to this Act, other than paragraph 11.

(7) Insurance companies and friendly societies: repeals relating to self-assessment

Chapter	Short title	Extent of repeal
1988 c. 1.	The Income and Corporation Taxes Act 1988.	In paragraph 1 of Schedule 19AB, in sub-paragraph (7), the words “paid or”, paragraph (b) and the word “and” immediately preceding it, and the words “or section 42(4) of the Management Act”.
		In paragraph 3 of Schedule 19AB—
		(a) in sub-paragraph (1A), the words “paid or” and “or section 42(4) of the Management Act”, and paragraph (b) and the word “and” immediately preceding it;
		(b) in sub-paragraph (1B), the words “payments or” and paragraph (b) and the word “or” immediately preceding it; and
		(c) in sub-paragraph (8), the words “paid or” and paragraph (b) and the word “or” immediately preceding it.

These repeals have effect in accordance with paragraphs 11 and 12 of Schedule 3 to this Act.

(8) Taxation of dealers in respect of distributions etc.

Chapter	Short title	Extent of repeal
1988 c. 1.	The Income and Corporation Taxes Act 1988.	In section 95, in subsection (1A), paragraphs (b) and (d), subsection (1B), in subsection (2), the word “qualifying” in both places where it occurs, and subsections (4) and (5).
		In section 234(1), the words “but subject to section 95(1A)(c)”.
		In section 732, subsections (2) and (2A), in subsection (4) the words “on a stock exchange outside the United Kingdom”, and subsections (5) to (7).
		Section 738(1)(a) and (b).
		In Schedule 23A, paragraph 2A(2).
		In Schedule 28B, in paragraph 13(5), paragraph (b) and the word “and” immediately preceding it.
1990 c. 29.	The Finance Act 1990.	Section 53(1).
1991 c. 31.	The Finance Act 1991.	Section 56.
1997 c. 16.	The Finance Act 1997.	In Schedule 7, paragraph 2(3)(a).

1. The repeals in sections 95 and 234 of, and Schedule 23A to, the Income and Corporation Taxes Act 1988 and in Schedule 7 to the Finance Act 1997 have effect in accordance with section 24 of this Act.

2. The repeals in sections 732 and 738 of the Income and Corporation Taxes Act 1988 and section 53 of the Finance Act 1990, and the repeal of section 56 of the Finance Act 1991, have effect in accordance with section 26 of this Act.

3. The repeal in Schedule 28B to the Income and Corporation Taxes Act 1988 has effect in accordance with section 25 of this Act.

(9) Tax credits and Schedule F income

Chapter	Short title	Extent of repeal
1970 c. 9.	The Taxes Management Act 1970.	In section 42, subsections (4) and (4A) and in subsection (5), the words from “and the reference in subsection (4) above” onwards.
		In section 42, in subsection (5), the words “Subject to subsection (5A) below,” and subsections (5A) and (10A).
1988 c. 1.	The Income and Corporation Taxes Act 1988.	In section 231, subsection (2), in subsection (3), the words from“and subject to” onwards and subsections (3A) to (3D).
		Section 231A.
		Section 232(2) and (3).
		Sections 235 to 237.
		In section 246(6)(a)(ii) the words “section 231(1) and”.
		In section 709(2A), the words “and to a repayment of tax”, “respectively” and “and to a payment of any amount in respect of a tax credit”.
1989 c. 26.	The Finance Act 1989.	Section 106.
1990 c. 29.	The Finance Act 1990.	Section 97.
1993 c. 34.	The Finance Act 1993.	In Schedule 6, paragraph 3.
1994 c. 9.	The Finance Act 1994.	In Schedule 9, paragraph 2.
1995 c. 4.	The Finance Act 1995.	Section 107(5) and (6).
1997 c. 16.	The Finance Act 1997.	Section 70.
		In Schedule 7, paragraph 3.
1997 c. 58.	The Finance (No. 2) Act 1997.	Section 19.

1. The repeals in section 42 of the Taxes Management Act 1970 (and the related repeals of section 97 of the Finance Act 1990 and in section 107 of the Finance Act 1995) have effect in accordance with paragraphs 2 and 3 of Schedule 4 to this Act.

2. The repeal in section 709 of the Income and Corporation Taxes Act 1988 has effect for the year 1999-00 and subsequent years of assessment.

3. The other repeals have effect in relation to distributions made on or after 6th April 1999.

(10) Tax credits etc: insurance companies and Lloyd’s underwriters

Chapter	Short title	Extent of repeal
1988 c. 1.	The Income and Corporation Taxes Act 1988.	In section 231B, in subsection (4)(b), the words “or 441A(7)”.
		In section 434(1A), the words from “but this subsection” onwards.
		Section 441A(2) to (8).
		In Schedule 19AC, in paragraph 9(1), in the notionally inserted section 434(1D), the words from “but this subsection” onwards and paragraph 11A(2).
1993 c. 34.	The Finance Act 1993.	In Schedule 20, paragraph 9(3) and, in paragraph 11(3)(c), the words “or tax credit received” and “or (3)”.
1995 c. 4.	The Finance Act 1995.	In Schedule 8, paragraph 31.

These repeals have effect in relation to distributions made on or after 6th April 1999.

(11) Foreign income dividends

Chapter	Short title	Extent of repeal
1988 c. 1.	The Income and Corporation Taxes Act 1988.	In section 13, in subsection (7), the words “and with the addition of foreign income dividends arising to the company”, and subsection (8A).
		In section 75, in subsection (2), the words “foreign income dividends”, and subsection (6).
		Sections 246A to 246Y.
		Section 247(5A) to (5D).
		In section 431(2), the definition of “foreign income dividends”.
		In section 434, subsections (3B) to (3D) and, in subsection (6A), paragraphs (aa) to (ac).
		In section 458(2), the words “and foreign income dividends arising to”.
		Section 468H(5).
		In section 468I, in subsection (2), the words “which are not foreign income dividends”, and subsections (3), (5), (5A) and (7).
		In section 468J, in subsection (1), the words “or a part of the total amount” and “which are not foreign income dividends”, in subsection (2), the words “or, as the case may be, the part”, and subsection (3).
		Section 468K.
		Section 468M(5)(c).
		In section 468Q, in subsection (2)(a), the words “a foreign income distribution”, in subsection (3), the definition of “B”, and subsection (4).
		Section 468R.
		In section 490, in subsection (1), the words “or out of foreign income dividends”, in subsection (4), the words “or foreign income dividends”, and subsection (5).
		In section 687(3), paragraph (aaa).
		In section 689B(2)(b), the words “246D(4) or”.
		In section 699A, in subsections (1)(a) and (4)(a), the word “246D(3)”.
		In section 701(8), the word “246D(3)”.
		In section 731, in subsection (9A), the words “other than a foreign income dividend”, and subsections (9B) to (9D).
		In section 802, in subsection (2), the words “foreign income dividends”, and subsection (4).
		In paragraph 1 of Schedule 13—
		(a) in sub-paragraph (1), paragraph (b), in paragraph (c) the words “and foreign income dividends paid”, and the words following paragraph (c); and
		(b) in sub-paragraph (4), the word “4A(2),”, and paragraph (b) and the word “and” immediately preceding it.
		In paragraph 2 of Schedule 13, sub-paragraphs (1)(d) to (f) and (5) and (6).
		In paragraph 3 of Schedule 13, in sub-paragraph (1), the words “and foreign income dividends”, and in sub-paragraph (3), the words “or foreign income dividend”.
		In Schedule 13, paragraphs 3A and 3B.
		In paragraph 4(2) of Schedule 13, the words “or paid any foreign income dividends”.
		In Schedule 13, paragraphs 4A and 6A.
		In paragraph 7(3) of Schedule 13, the words “and no foreign income dividend is paid”.
		In Schedule 13, paragraph 9A.
		In Schedule 23A, in paragraph 1(1), the definition of “foreign income dividend”, in paragraph 2(6), the words “Subject to paragraph 2B(2)(b) below”, and paragraph 2B.
1989 c. 26.	The Finance Act 1989.	In section 88A(3), paragraph (d)(ii) and the word “or” immediately preceding it, and the words “(or by that subsection as applied by section 468R(2) of that Act)”.
		In section 89, in subsection (2), paragraph (c) and the word “and” immediately preceding it, and subsection (2A).
1993 c. 34.	The Finance Act 1993.	Section 171(2A).
1994 c. 9.	The Finance Act 1994.	In Schedule 16, paragraph 1, in paragraph 3, sub-paragraphs (5) to (10) and (12), and paragraphs 4, 5(4) and (5), 7 to 9 and 11 to 16.
		In Schedule 21, paragraph 1(1) and (3)(a).
1995 c. 4.	The Finance Act 1995.	Section 76(1).
1996 c. 8.	The Finance Act 1996.	Section 122(5)(a).
		In Schedule 6, paragraph 5.
		In Schedule 23, paragraphs 4 and 6.
		In Schedule 27, paragraphs 1 to 4 and 6.
		In Schedule 38, in paragraph 6, sub-paragraph (2)(c) and, in sub-paragraph (5), the words “(2)(c) and”.
1997 c. 16.	The Finance Act 1997.	Section 72.
		In Schedule 7, paragraphs 2, 4 to 6 and 9 to 11.
		In Schedule 10, paragraphs 9 and 10(2) and (3).

These repeals have effect in accordance with section 36 of, and Schedule 6 to, this Act.

(12) Distributions: consequential repeals

Chapter	Short title	Extent of repeal
1997 c. 16.	The Finance Act 1997.	In Schedule 7, paragraphs 1 and 7.

1. The repeal of paragraph 1 of Schedule 7 to the Finance Act 1997 has effect in relation to distributions made on or after 6th April 1999.

2. The repeal of paragraph 7 of that Schedule has effect in relation to payments which are representative of distributions made on or after 6th April 1999.

(13) Interest on gilt-edged securities, etc.

Chapter	Short title	Extent of repeal
1988 c. 1.	The Income and Corporation Taxes Act 1988.	In section 50(1), paragraphs (a), (c) and (d).
		Section 51A.
		In section 118G—
		(a) in subsection (3), paragraphs (b) and (d) to (f);
		(b) subsections (8) and (10); and
		(c) in subsection (9), the words “or (8)”, “or subject to deduction of tax at a reduced rate” and “subsection (10) below and to”.
		In section 118H—
		(a) in subsection (2), the words from “or (8), or” to the words “case may be” in the first place where they occur and the words “or (8)” in the second place where they occur; and
		(b) in subsections (3) and (4), the words “or (8)”, wherever they occur.
1995 c. 4.	The Finance Act 1995.	Section 77.

These repeals have effect in relation to payments falling due on or after 6th April 1998.

(14) Group Relief

Chapter	Short title	Extent of repeal
1988 c. 1.	The Income and Corporation Taxes Act 1988.	Section 403(9).
		Sections 408 and 409.
		Section 411(2) to (9).
1990 c. 29.	The Finance Act 1990.	Section 96(11).

These repeals have effect, subject to the provisions of paragraph 9 of Schedule 7 to this Act, for accounting periods ending on or after 2nd July 1997.