Finance Act 1999

“ Table

Part of gross gaming yield	Rate
The first £462,500	2½ per cent.
The next £1,027,500	12½ per cent.
The next £1,027,500	20 per cent.
The next £1,798,500	30 per cent.
The remainder	40 per cent.”

“(2A)

In the case of a vehicle having an engine with a cylinder capacity not exceeding 1,100 cubic centimetres, the general rate is £100.”

“(4)

Goods for use in a ship or aircraft as merchandise for sale to persons carried in the ship or aircraft shall be treated for the purposes of the customs and excise Acts as stores if, and only if—

(a)

the goods are to be sold by retail either—

(i)

in the course of a relevant journey, or

(ii)

for consumption on board;

and

(b)

the goods are not treated as exported by virtue of regulations under section 12 of the M9Customs and Excise Duties (General Reliefs) Act 1979 (goods for use in naval ships or establishments).

(4A)

For the purposes of subsection (4) above a relevant journey is any journey beginning in the United Kingdom and having an immediate destination outside the member States.

(4B)

In relation to goods treated as stores by virtue of subsection (4) above, any reference in the customs and excise Acts to the consumption of stores shall be construed as referring to the sale of the goods as mentioned in paragraph (a) of that subsection.”

(b)

conferring an entitlement to drawback of duty, in prescribed cases, on the shipment as stores, or warehousing in an excise warehouse for use as stores, of goods chargeable with duty”.

“(aa)

in respect of so much of an individual’s total income as does not exceed £1,500, at such rate as Parliament may determine to be the starting rate for that year;”.

“(2A)

The amount up to which an individual’s income is by virtue of subsection (2) above chargeable for any year at the starting rate shall be known as the starting rate limit.”

(a)

if the result in the case of the amount specified in subsection (2)(aa) above is not a multiple of £10, rounding it up to the nearest amount which is such a multiple, and

(b)

if the result in the case of the amount specified in subsection (2)(b) above is not a multiple of £100, rounding it up to the nearest amount which is such a multiple.”

“(5A)

Subsection (4) above shall not require any change to be made in the amounts deductible or repayable under section 203 during the period beginning with 6th April and ending with 17th May in the year of assessment.”

“(2A)

Subsection (1) above shall not require any change to be made in the amounts deductible or repayable under section 203 during the period beginning with 6th April and ending with 17th May in the year of assessment.”

“13AA Corporation tax starting rate.

(1)

Where in any accounting period the profits of a qualifying company do not exceed the first relevant amount, the company may, instead of making a claim under section 13(1), claim that the corporation tax charged on its basic profits for that period shall be calculated as if the rate of corporation tax were such rate (to be known as the “corporation tax starting rate”), lower than the small companies’ rate, as Parliament may from time to time determine.

(2)

Where in any accounting period the profits of a qualifying company exceed the first relevant amount but do not exceed the second relevant amount, the company may, instead of making a claim under section 13(1), claim that the corporation tax charged on its basic profits for that period shall be—

(a)

calculated as if the rate of corporation tax were the small companies’ rate; and

(b)

then reduced by the sum specified in subsection (3) below.

(3)

That sum is the sum equal to such fraction as Parliament may from time to time determine of the following amount—

$(\mathrm{R2}-P)x\frac{I}{P}$

where—

• R2 is the second relevant amount;

• P is the amount of the profits; and

• I is the amount of the basic profits.

(4)

The first and second relevant amounts mentioned above shall be determined as follows—

(a)

where the company has no associated company in the accounting period, those amounts are £10,000 and £50,000 respectively;

(b)

where the company has one or more associated companies in the accounting period—

(i)

the first relevant amount is £10,000 divided by one plus the number of those associated companies, and

(ii)

the second relevant amount is £50,000 divided by one plus the number of those associated companies.

(5)

Subsections (4) and (5) of section 13 shall apply for the purposes of subsection (4) above as they apply for the purposes of subsection (3) of that section.

(6)

For an accounting period of less than 12 months the relevant amounts determined in accordance with subsection (4) above shall be proportionately reduced.

(7)

The profits and the basic profits of a company for an accounting period shall be determined for the purposes of this section as they are for the purposes of section 13.

(8)

In this section “qualifying company”, in relation to an accounting period, means a company which—

(a)

is resident in the United Kingdom;

(b)

is not a close investment-holding company (as defined in section 13A) at the end of that period; and

(c)

is not an investment trust which for that period has any eligible rental income (within the meaning of section 508A).”

“(5A)

The amounts specified in subsections (2) and (3) above shall not by virtue of subsection (5) above be treated as reduced below £1,970.”

“(1A)

A periodical payment is not a qualifying maintenance payment unless either of the parties to the marriage mentioned in subsection (1)(b) above was born before 6th April 1935.”

“(aa)

that the loan was made before 9th March 1999;”.

“(1AA)

Where—

(a)

a loan made on or after 9th March 1999 was made in pursuance of an offer made by the lender before that date, and

(b)

the offer was either in writing or evidenced by a note or memorandum made by the lender before that date,

the loan shall be deemed for the purposes of subsection (1)(aa) above to have been made before that date.”

“(1AB)

Subject to subsection (1AC) below, the conditions in paragraphs (aa) and (a) of subsection (1) above shall be treated as satisfied in relation to a loan (“the new loan”) if—

(a)

the new loan was made on or after the day on which the Finance Act 1999 was passed;

(b)

the new loan was made as part of a scheme (“the scheme”) under which the whole or any part of the proceeds of the loan was used to defray money applied in paying off another loan (“the old loan”); and

(c)

the conditions in subsection (1) above were, or were treated by virtue of this subsection as, satisfied with respect to the old loan.

(1AC)

If only part of the proceeds of the new loan was used to defray money applied in paying off the old loan, subsection (1AB) above applies only if, under the scheme, not less than nine-tenths of the remaining part of the proceeds of the new loan was applied to the purchase by the person to whom it was made of an annuity ending with his life or with the life of the survivor of two or more persons who include him.

(1AD)

In subsection (1AC) above “the remaining part” means the part of the proceeds of the new loan that was not used to defray money applied in paying off the old loan.”

“(1A)

The condition in subsection (1)(d) above shall be treated as satisfied in relation to a loan if—

(a)

the person to whom the loan was made, or any of the annuitants, ceased to use the land as his only or main residence at a time falling within the period of twelve months ending with 8th March 1999, and

(b)

the intention at that time of the person to whom the loan was made, or each of the annuitants owning an estate or interest in the land, was to take steps, before the end of the period of twelve months after the day on which the land ceased to be so used, with a view to the disposal of his estate or interest.”

“(2B)

Subsection (1) above shall apply to a payment made by the Board under section 375(8) (payment of amount which borrower would have been able to deduct from interest payment under section 369(1)) as if the payment were a repayment falling within that subsection.”

“(aa)

if the repayment is a payment made by the Board under section 375(8), the relevant time is—

(i)

if the interest payment was made in the year 1996-97 or a subsequent year of assessment, the 31st January next following that year;

(ii)

if the interest payment was made in an earlier year of assessment, the 5th April next following that year;”.

“(a)

paragraph 2(1) above shall have effect as if for “15 per cent.” there were substituted “25 per cent.””

“(2B)

In subsection (2A) above “relevant payments” means payments under contracts relating to, or to the work of individuals participating in the carrying out of, any operations which—

(a)

are of a description specified in subsection (2) of section 567; but

(b)

are not of a description specified in subsection (3) of that section,

other than so much of the payments as represents the direct cost to the person receiving the payments of materials used or to be used in carrying out the operations in question.”

“83A Gifts in kind to charities etc.

(1)

This section applies where a person carrying on a trade, profession or vocation gives an article falling within subsection (2) below to—

(a)

a charity within the meaning of section 506, or

(b)

a body listed in section 507(1).

(2)

An article falls within this subsection if—

(a)

it is an article manufactured, or of a class or description sold, by the donor in the course of his trade; or

(b)

it is an article used by the donor in the course of his trade, profession or vocation which for the purposes of Part II of the 1990 Act constitutes machinery or plant used by him wholly or partly in the course of that trade, profession or vocation.

(3)

Subject to subsection (4) below, where this section applies in the case of the gift of an article—

(a)

no amount shall be required, in consequence of the donor’s disposal of that article from trading stock, to be brought into account for the purposes of the Tax Acts as a trading receipt of the donor; and

(b)

section 24(6) of the 1990 Act shall not require the donor to bring into account any disposal value in respect of the article for the purposes of that section.

(4)

In any case where—

(a)

relief is given under subsection (3) above in respect of the gift of an article, and

(b)

any benefit received in any chargeable period by the donor or any person connected with him is in any way attributable to the making of that gift,

the donor shall in respect of that chargeable period be charged to tax under Case I or Case II of Schedule D or, if he is not chargeable to tax under either of those Cases for that period, under Case VI of Schedule D on an amount equal to the value of that benefit.

(5)

Section 839 applies for the purposes of this section.”

“(4A)

Subsection (10) of section 25 of the M29Finance Act 1990 (receipts of gifts by a charity to be treated as payments of grossed-up amounts after deduction of basic rate income tax) shall have effect where—

(a)

any aggregated gifts are treated under this section as a single qualifying donation made to a charity, and

(b)

the aggregated gifts include gifts made in different years of assessment,

as if that single qualifying donation had been received by the charity in the year of assessment in which the first of the aggregated gifts was made and as if that were the relevant year of assessment for the purposes of that subsection.”

“(a)

in England and Wales, any body falling within subsection (4) below;

(b)

in Scotland, any body falling within subsection (5) below;

(c)

in Northern Ireland, any body falling within subsection (6) below; and”.

“(4)

A body falls within this subsection if it is—

(a)

a local education authority;

(b)

an educational institution maintained or otherwise supported by such an authority (including a grant-maintained school or a grant-maintained special school within the meaning of the M30Education Act 1996);

(c)

an independent school, within the meaning of the Education Act 1996, whose registration under section 465 of that Act is final; or

(d)

an institution within the further education sector, or the higher education sector, within the meaning of the M31Further and Higher Education Act 1992.

(5)

A body falls within this subsection if it is—

(a)

an education authority;

(b)

an educational establishment managed by such an authority within the meaning of the M32Education (Scotland) Act 1980 (“the 1980 Act”);

(c)

a public or grant-aided school within the meaning of the 1980 Act;

(d)

a self-governing school within the meaning of the M33Self-Governing Schools etc. (Scotland) Act 1989;

(e)

an independent school within the meaning of the 1980 Act;

(f)

a central institution within the meaning of the 1980 Act;

(g)

an institution within the higher education sector within the meaning of section 56(2) of the M34Further and Higher Education (Scotland) Act 1992; or

(h)

a college of further education within the meaning of section 36(1) of that Act.

(6)

A body falls within this subsection if it is—

(a)

an education or library board within the meaning of the M35Education and Libraries (Northern Ireland) Order 1986;

(b)

a college of education or a controlled, maintained, grant-maintained integrated, controlled integrated, voluntary or independent school within the meaning of that Order; or

(c)

an institution of further education within the meaning of the M36Further Education (Northern Ireland) Order 1997.”

“(2)

The individual shall be entitled to relief under this subsection in respect of the payment for the year of assessment in which it is made; but relief under this subsection shall be given only on a claim made for the purpose, except where subsections (3) to (5) below apply.

(2A)

Where an individual is entitled to relief under subsection (2) above in respect of any payment made in a year of assessment, the amount of his liability for that year to income tax on his total income shall be the amount to which he would be liable apart from this section less whichever is the smaller of—

(a)

the amount which is equal to such percentage of the amount of the payment as is the basic rate for the year; and

(b)

the amount which reduces his liability to nil.

(2B)

In determining for the purposes of subsection (2A) above the amount of income tax to which a person would be liable apart from this section, no account shall be taken of—

(a)

any income tax reduction under Chapter I of Part VII of the Taxes Act 1988 or under section 347B of that Act;

(b)

any income tax reduction under section 353(1A) of the Taxes Act 1988;

(c)

any relief by way of a reduction of liability to tax which is given in accordance with any arrangements having effect by virtue of section 788 of the Taxes Act 1988 or by way of a credit under section 790(1) of that Act;

(d)

any tax at the basic rate on so much of that person’s income as is income the income tax on which he is entitled to charge against any other person or to deduct, retain or satisfy out of any payment.”

“, or

(b)

would otherwise be treated (apart from this section) as income of an unmarried minor child of the settlor,”.

“(a)

treated as income of the settlor, or

(b)

paid (whether as income or capital) to or for the benefit of, or otherwise treated as the income of, a beneficiary other than an unmarried minor child of the settlor, or

(bb)

treated as the income of an unmarried minor child of the settlor, and subject to tax, in any of the years 1995-96, 1996-97 or 1997-98, or”.

“(3A)

For the purposes of subsection (3)(bb) above—

(a)

the amount of a child’s income that is subject to tax in a year of assessment is the amount (“the taxable amount”) by which the child’s total income for income tax purposes exceeds the aggregate amount of allowances that may be set against it; and

(b)

income arising under the settlement that is treated as income of the child is subject to tax to the extent that it does not exceed the taxable amount.

In this subsection “allowance” includes any deduction allowed against total income.”.

“(5)

If in any year of assessment the aggregate amount of a child’s relevant settlement income does not exceed £100, subsection (1) does not apply in relation to that income.

A child’s ’relevant settlement income’ means income paid to or for the benefit of, or otherwise treated as income of, that child which apart from this subsection would be treated as income of the settlor under subsection (1).”.

“(1)

Subject to the following provisions of this paragraph and paragraph 14(1) below, in this Schedule “relevant discounted security” means any security which (whenever issued) is such that, taking the security as at the time of its issue, the amount payable on redemption—

(a)

on maturity, or

(b)

in the case of a security of which there may be a redemption before maturity, on at least one of the occasions on which it may be redeemed,

is or would be an amount involving a deep gain, or might be an amount which would involve a deep gain.

(1A)

The occasions that are to be taken into account for the purpose of determining whether a security is a relevant discounted security by virtue of sub-paragraph (1)(b) above shall not include any of the following occasions on which it may be redeemed, that is to say—

(a)

any occasion not falling within sub-paragraph (1C) below on which there may be a redemption otherwise than at the option of the person who holds the security;

(b)

in a case where a redemption may occur as a result of the exercise of an option that is exercisable—

(i)

only on the occurrence of an event adversely affecting the holder, or

(ii)

only on the occurrence of a default by any person,

any occasion on which that option is unlikely (judged as at the time of the security’s issue) to be exercisable;

but nothing in this sub-paragraph shall require an occasion on which a security may be redeemed to be disregarded by reason only that it is or may be an occasion that coincides with an occasion mentioned in this sub-paragraph.

(1B)

In sub-paragraph (1A) above “event adversely affecting the holder”, in relation to a security, means an event which (judged as at the time of the security’s issue) is such that, if it occurred and there were no provision for redemption, the interests of the person holding the security at the time of the event would be likely to be adversely affected.

(1C)

An occasion on which there may be a redemption of a security falls within this sub-paragraph if—

(a)

the security is a security issued to a person connected with the issuer; or

(b)

the obtaining of a tax advantage by any person is the main benefit, or one of the main benefits, that might have been expected to accrue from the provision in accordance with which it may be redeemed on that occasion.

(1D)

In sub-paragraph (1C) above “tax advantage” has the meaning given by section 709(1) of the Taxes Act 1988.

(1E)

Subject to sub-paragraph (1F) below, where a security which is not a relevant discounted security but which would have been such a security if it had been issued to a person connected with the issuer—

(a)

is acquired by a person who is so connected, or

(b)

is held by a person who becomes so connected,

this Schedule shall have effect, in relation to times falling at or after the time of the acquisition or, as the case may be, the time when that person became so connected, as if the security were a relevant discounted security.

(1F)

Where a security which—

(a)

is a relevant discounted security, but

(b)

would not be such a security but for sub-paragraph (1C)(a) or (1E) above,

is acquired by a person who is not connected with the issuer, this Schedule shall have effect, in relation to that person, as if the security ceased to be a relevant discounted security at the time of the acquisition.”

“(2A)

Nothing in sub-paragraph (2)(c) above shall prevent a security that would have been a relevant discounted security if it had been issued to a person connected with the issuer from being treated as a relevant discounted security by virtue of sub-paragraph (1E) above.

(2B)

Nothing in sub-paragraph (2)(f) above shall prevent a security from being treated as a relevant discounted security by virtue of sub-paragraph (1C)(a) or (1E) above.”

“(7)

Section 839 of the Taxes Act 1988 (connected persons) applies for the purposes of this paragraph.

(8)

In determining for the purposes of sub-paragraph (1C), (1E), (1F) or (2A) above whether a person is or becomes connected with the issuer, no account shall be taken of—

(a)

the security mentioned in that sub-paragraph; or

(b)

any security issued under the same prospectus as that security.”

“(4)

For the purpose of determining whether a security held by a person who is not connected with the issuer is a relevant discounted security by virtue of this paragraph, a security which—

(a)

is a relevant discounted security, but

(b)

would not be such a security but for paragraph 3(1C)(a) or (1E) above,

shall be assumed not to be a security falling within sub-paragraph (1)(b) above.”

“(9)

In this paragraph references to redemption, in relation to a security, do not include references to redemption of the security on any such occasion as, by reason of sub-paragraph (1A) of paragraph 3 above, is not to be taken into account for the purpose of determining whether the security is a relevant discounted security by virtue of sub-paragraph (1)(b) of that paragraph.”

“(7)

Where an asset representing a creditor relationship of a company—

(a)

ceases at any time to be an asset to which this section applies, but

(b)

does not cease at that time to represent a creditor relationship of that company,

the company shall be deemed for the purposes of the M43Taxation of Chargeable Gains Act 1992 and this Chapter to have disposed of the asset immediately before that time for the relevant consideration, and to have re-acquired it immediately after that time for the relevant consideration.

(8)

Any deemed disposal and re-acquisition under subsection (7) above shall be treated for the purposes of that Act of 1992 as a transaction in the case of which—

(a)

sections 127 to 130 of that Act would apply, apart from the provisions of section 116 of that Act, by virtue of any provision of Chapter II of Part IV of that Act;

(b)

the asset in question represents both the original shares and the new holding for the purposes of those sections;

(c)

the market value of the asset at the time of the transaction is an amount equal to the relevant consideration.

(9)

Subject to subsection (10) below, in subsections (7) and (8) above “the relevant consideration”, in relation to an asset, means the amount that would have been taken, in accordance with the relevant accounting method, to be the value of the asset at the time of its deemed disposal if that method had been applied to the asset for tax purposes at all times until then.

(10)

Subsection (5) above shall not apply in the case of a deemed disposal and re-acquisition under subsection (7) above; but the amount of the relevant consideration in such a case shall be treated for the purposes of the Taxation of Chargeable Gains Act 1992 as reduced by so much (if any) of the amount mentioned in subsection (9) above as is referable to interest which—

(a)

is not paid or payable to the company before the time of the deemed disposal; but

(b)

is interest falling to be brought into account under subsections (2) and (3) above as having accrued before that time.

(11)

In subsection (9) above “the relevant accounting method”, in relation to an asset representing a creditor relationship of a company, means the accounting method which, for the accounting period of that company in which the deemed re-acquisition takes place, is used as respects that asset and the part of that accounting period beginning with the deemed re-acquisition.”

“(3A)

Any income that is treated as arising at the time mentioned in subsection (5) of that section, as it applies by virtue of sub-paragraph (3) above, shall be brought into account as a non-trading credit given for the purposes of this Chapter for the accounting period in which that time falls.”

“(2A)

Any income that is treated as arising on the day mentioned in subsection (5) of that section, as it applies by virtue of sub-paragraph (2) above, shall be brought into account as a non-trading credit given for the purposes of this Chapter for the accounting period in which that day falls.”

“(b)

the company did not make any disposal of that security on that date,”.

“(5A)

There is a disposal of a security for the purposes of subsection (5)(c) above if there would be such a disposal for the purposes of the M48Taxation of Chargeable Gains Act 1992.”

“469A Court common investment funds.

(1)

The Tax Acts shall have effect in relation to any common investment fund established under section 42 of the M49Administration of Justice Act 1982 (common investment funds for money paid into court) as if—

(a)

the fund were an authorised unit trust;

(b)

the person who is for the time being the investment manager of the fund were the trustee of that authorised unit trust; and

(c)

the persons whose interests entitle them, as against the Accountant General, to share in the fund’s investments were the unit holders in that authorised unit trust.

(2)

In this section “the Accountant General” means (subject to subsection (3) below) the Accountant General of the Supreme Court of Judicature in England and Wales or the Accountant General of the Supreme Court of Judicature of Northern Ireland.

(3)

Where in the case of any common investment fund a person other than the Accountant General is authorised by the Lord Chancellor to hold shares in the fund, the reference in subsection (1)(c) above to the Accountant General shall include a reference to that other person.”

“ Acquisitions for restructuring purposes

10C

(1)

This paragraph applies where—

(a)

arrangements are made for a company (“the new company”) to acquire all the shares (“old shares”) in another company (“the old company”);

(b)

the acquisition provided for by the arrangements falls within sub-paragraph (2) below; and

(c)

the Board have, before any exchange of shares takes place under the arrangements, given an approval notification.

(2)

An acquisition of shares falls within this sub-paragraph if—

(a)

the consideration for the old shares consists wholly of the issue of shares (“new shares”) in the new company;

(b)

new shares are issued in consideration of old shares only at times when there are no issued shares in the new company other than subscriber shares and new shares previously issued in consideration of old shares;

(c)

the consideration for new shares of each description consists wholly of old shares of the corresponding description; and

(d)

new shares of each description are issued to the holders of old shares of the corresponding description in respect of, and in proportion to, their holdings.

(3)

For the purposes of sub-paragraph (1)(c) above an approval notification is one which, on an application by either the old company or the new company, is given to the applicant company and states that the Board are satisfied that the exchange of shares under the arrangements—

(a)

will be effected for bona fide commercial reasons; and

(b)

will not form part of any such scheme or arrangements as are mentioned in section 137(1) of the 1992 Act.

(4)

If the requirements of paragraph 3 above were satisfied in relation to the old company and any old shares immediately before the beginning of the period for giving effect to the arrangements, then (to the extent that it would not otherwise be the case) those requirements shall be deemed to be satisfied in relation to the new company and the matching new shares at all times which—

(a)

fall in that period; and

(b)

do not fall after a time when (apart from the arrangements) those requirements would have ceased by virtue of—

(i)

sub-paragraph (4) or (5) of that paragraph, or

(ii)

any cessation of a trade by any company,

to be satisfied in relation to the old company and the matching old shares.

(5)

For the purposes of paragraph 3 above the period of two years mentioned in sub-paragraph (4) of that paragraph shall be deemed, in the case of any new shares, to expire at the same time as it would have expired (or by virtue of this sub-paragraph would have been deemed to expire) in the case of the matching old shares.

(6)

Subject to sub-paragraph (7) below, where—

(a)

there is an exchange under the arrangements of any new shares for any old shares, and

(b)

those old shares are shares in relation to which the requirements of paragraphs 6 and 8 above were (or were deemed to be) satisfied to any extent immediately before the exchange,

those requirements shall be deemed, at all times after that time, to be satisfied to the same extent in relation to the matching new shares.

(7)

Where there is a time following any exchange under the arrangements of any new shares for any old shares when (apart from the arrangements) the requirements of paragraph 6 above would have ceased under—

(a)

sub-paragraph (2) of that paragraph, or

(b)

this sub-paragraph,

to be satisfied in relation to those old shares, those requirements shall cease at that time to be satisfied in relation to the matching new shares.

(8)

For the purposes of paragraph 7 above any new shares acquired under the arrangements shall be deemed to represent an investment which—

(a)

raised the same amount of money as was raised (or, by virtue of this sub-paragraph, is deemed to have been raised) by the issue of the matching old shares, and

(b)

raised that amount by an issue of shares in the new company made at the time when the issue of the matching old shares took place (or, as the case may be, is deemed to have taken place).

(9)

In determining whether the requirements of paragraph 9 above are satisfied in relation to the old company or the new company at a time in the period for giving effect to the arrangements, both—

(a)

the arrangements themselves, and

(b)

any exchange of new shares for old shares that has already taken place under the arrangements,

shall be disregarded.

(10)

For the purposes of paragraph 10B above the value of the new shares, both immediately after the time of their acquisition and immediately after the time of any subsequent relevant event occurring by virtue of the arrangements, shall be taken to be the same as the value, when last valued in accordance with that paragraph, of the old shares for which they are exchanged.

(11)

Nothing in this paragraph shall deem any of the requirements of this Schedule to be satisfied in relation to any new shares unless the matching old shares were first issued to the trust company and have been held by that company from the time when they were issued until they are acquired by the new company.

(12)

References in this paragraph to the period for giving effect to the arrangements are references to the period which—

(a)

begins with the time when those arrangements first came into existence; and

(b)

ends with the time when the new company completes its acquisition under the arrangements of all the old shares.

(13)

If, at any time after the arrangements first came into existence and before the new company has acquired all the old shares, the arrangements—

(a)

cease to be arrangements for the acquisition of all the old shares by the new company, or

(b)

cease to be arrangements for an acquisition falling within sub-paragraph (2) above,

this paragraph shall not deem any requirement of this Schedule to be satisfied, and sub-paragraph (10) above shall not apply, in the case of any new shares at any time after the arrangements have so ceased.

(14)

Subject to sub-paragraph (15) below, references in this paragraph, except in the expression “subscriber shares”, to shares in a company include references to any securities of that company.

(15)

For the purposes of this paragraph, a relevant security of the old company shall not be treated as a security of that company if—

(a)

the arrangements do not provide for the acquisition of the security by the new company; or

(b)

such treatment prevents sub-paragraph (1)(b) above from being satisfied in connection with the arrangements.

(16)

In sub-paragraph (15) above “relevant security” means an instrument which is a security for the purposes of this Schedule by reason only of section 842AA(12).

(17)

For the purposes of this paragraph—

(a)

old shares and new shares are of a corresponding description if, were they shares in the same company, they would be of the same description; and

(b)

old shares and new shares are matching shares in relation to each other if the old shares are the shares for which those new shares are exchanged under the arrangements.

Conversion of convertible shares and securities

10D.—(1) This paragraph applies where—

(a)

shares have been issued to the trust company by virtue of the exercise by that company of any right of conversion attached to other shares, or securities, held by that company (“the convertibles”);

(b)

the shares so issued are in the same company as the convertibles to which the right was attached;

(c)

the convertibles to which the right was attached were first issued to the trust company and were held by that company from the time they were issued until converted; and

(d)

the right was attached to the convertibles when they were first so issued and was not varied before it was exercised.

(2)

Sub-paragraphs (5) to (8) of paragraph 10C above shall apply in relation to the exchange of convertibles for shares by virtue of the exercise of the right of conversion as if—

(a)

that exchange were an exchange under any such arrangements as are mentioned in that paragraph of new shares for old shares; and

(b)

the references in those sub-paragraphs and sub-paragraph (17)(b) of that paragraph to the arrangements were references to the provision conferring the right of conversion.

(3)

For the purposes of paragraph 10B above the value of the new shares immediately after the time of their acquisition by the trust company shall be taken to be the same as the value, when last valued in accordance with that paragraph, of the convertibles for which they are exchanged.”

“(5AA)

For the purposes of subsection (2)(b) to (d) above where—

(a)

any shares (“new shares”) are exchanged for other shares (“old shares”) under arrangements in relation to which paragraph 10C of Schedule 28B applies, and

(b)

those arrangements have not ceased by virtue of sub-paragraph (13) of that paragraph to be arrangements by reference to which requirements of that Schedule are deemed to be satisfied,

the value of the new shares, both at the time of their acquisition and immediately after any subsequent addition to a holding of the new shares that is made under those arrangements, shall be taken to be the same as the value, when last valued in accordance with subsection (5) above, of the old shares for which they are exchanged.

(5AB)

References in subsection (5AA) above to shares in a company include references to any securities of that company.

(5AC)

For the purposes of subsection (2)(b) to (d) above, where—

(a)

shares (“new shares”) are issued to a company by virtue of the exercise by that company of any right of conversion attached to other shares, or securities, held by that company (“convertibles”), and

(b)

paragraph 10D of Schedule 28B applies in relation to the issue of the new shares,

the value of the new shares at the time of their acquisition shall be taken to be the same as the value, when last valued in accordance with subsection (5) above, of the convertibles for which they are exchanged.”

“(ia)

were so acquired 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,”.

“150D Enterprise investment scheme: application of taper relief

Schedule 5BA to this Act (which provides for the application of taper relief in cases where relief under Schedule 5B, or Chapter III of Part VII of the Taxes Act, applies) shall have effect.”

“(2)

Where, in any case in which a person (“the beneficiary”) becomes absolutely entitled to any settled property as against the trustee, an allowable loss would (apart from this subsection) have accrued to the trustee on the deemed disposal under subsection (1) above of an asset comprised in that property—

(a)

that loss shall be treated, to the extent only that it cannot be deducted from pre-entitlement gains of the trustee, as an allowable loss accruing to the beneficiary (instead of to the trustee); but

(b)

any allowable loss treated as accruing to the beneficiary under this subsection shall be deductible under this Act from chargeable gains accruing to the beneficiary to the extent only that it can be deducted from gains accruing to the beneficiary on the disposal by him of—

(i)

the asset on the deemed disposal of which the loss accrued; or

(ii)

where that asset is an estate, interest or right in or over land, that asset or any asset deriving from that asset.

(2A)

In subsection (2) above “pre-entitlement gain”, in relation to an allowable loss accruing to a trustee on the deemed disposal of any asset comprised in any settled property, means a chargeable gain accruing to that trustee on—

(a)

a disposal which, on the occasion on which the beneficiary becomes absolutely entitled as against the trustee to that property, is deemed under subsection (1) above to have taken place; or

(b)

any other disposal taking place before that occasion but in the same year of assessment.

(2B)

For the purposes of subsection (2)(b)(ii) above an asset (“the relevant asset”) derives from another if, in a case where—

(a)

assets have merged,

(b)

an asset has divided or otherwise changed its nature, or

(c)

different rights or interests in or over any asset have been created or extinguished at different times,

the value of the relevant asset is wholly or partly derived (through one or more successive events falling within paragraphs (a) to (c) above but not otherwise) from the other asset.

(2C)

The rules set out in subsection (2D) below shall apply (notwithstanding any other rules contained in this Act or in section 113(2) of the M52Finance Act 1995 (order of deduction))—

(a)

for determining for the purposes of this section whether an allowable loss accruing to the trustee, or treated as accruing to the beneficiary, can be deducted from particular chargeable gains for any year of assessment; and

(b)

for the making of deductions of allowable losses from chargeable gains in cases where it has been determined that such an allowable loss can be deducted from particular chargeable gains.

(2D)

Those rules are as follows—

(a)

allowable losses accruing to the trustee on a deemed disposal under subsection (1) above shall be deducted before any deduction is made in respect of any other allowable losses accruing to the trustee in that year;

(b)

allowable losses treated as accruing to the beneficiary under this section, so far as they cannot be deducted in a year of assessment as mentioned in subsection (2)(b) above, may be carried forward from year to year until they can be so deducted; and

(c)

allowable losses treated as accruing to the beneficiary for any year of assessment under this section, and allowable losses carried forward to any year of assessment under paragraph (b) above—

(i)

shall be deducted before any deduction is made in respect of any allowable losses accruing to the beneficiary in that year otherwise than by virtue of this section; and

(ii)

in the case of losses carried forward to any year, shall be deductible as if they were losses actually accruing in that year.”

“284A Concessions that defer a charge.

(1)

This section applies where—

(a)

a person (“the original taxpayer”) has at any time obtained for any chargeable period (“the first chargeable period”) the benefit of any capital gains relief to which he had no statutory entitlement;

(b)

the benefit of the relief was obtained in reliance on any concession;

(c)

the concession was first published by the Board before 9th March 1999 or (having been published on or after that date) replaced a concession satisfying the requirements of this paragraph with a concession to the same or substantially the same effect; and

(d)

the concession involved the application (with or without modifications), to a case to which they would not otherwise have applied, of the provisions of any enactment (“the relevant statutory provisions”).

(2)

This section applies only if, at the time when the original taxpayer obtained the benefit of the relief, the concession was one available generally to any person falling within its terms.

(3)

If the benefit obtained for the first chargeable period by the original taxpayer is repudiated for any later chargeable period (whether by the original taxpayer or by another person), the enactments relating to the taxation of chargeable gains shall have effect as if a chargeable gain equal to the amount of that benefit accrued in the later chargeable period to the person repudiating the benefit.

(4)

For the purposes of this section—

(a)

a capital gains relief for any chargeable period is a relief (of whatever description) the effect of which is that the amount of the chargeable gains taken to have accrued to that person in that period is less than it otherwise would have been; and

(b)

the amount of the benefit of any such relief is the amount by which, as a consequence of that relief, those gains are less than they otherwise would have been.

(5)

Where, without applying a specific enactment, any concession has the effect that—

(a)

any asset is treated as the same as another asset and as acquired as the other asset was acquired,

(b)

any two or more assets are treated as a single asset, or

(c)

any disposal is treated as having been a disposal on which neither a gain nor a loss accrued,

that concession shall be assumed for the purposes of this section to have involved the application, to a case to which it would not otherwise have applied, of the provisions of an enactment to the corresponding effect.

(6)

For the purposes of this section the benefit of any relief obtained by the original taxpayer for the first chargeable period is repudiated by a person for a later chargeable period if—

(a)

circumstances arise such that, had the equivalent circumstances arisen in the case of the corresponding relief under the relevant statutory provisions, the whole or a part of the benefit of that relief would have fallen to be recouped from that person in the later chargeable period;

(b)

apart from this section, the recoupment in the actual circumstances of the whole or a part of the benefit obtained by the original taxpayer is prevented by the fact that the original taxpayer relied on a concession (rather than on the relevant statutory provisions) to obtain that benefit; and

(c)

the person from whom, in the equivalent circumstances, the amount of the benefit or any part of it would have fallen to be recouped is not precluded by subsection (8) below from relying on that fact in relation to that amount or part.

(7)

For the purposes of this section an amount of the benefit of a capital gains relief is recouped from any person in a chargeable period to the extent that an amount is so brought into account in his case for that period as to secure that—

(a)

the amount of his chargeable gains for that period is taken to be more than it otherwise would have been by an amount directly or indirectly representing the whole or a part of the amount of the benefit; or

(b)

the amount of his allowable losses for that period is taken to be less than it otherwise would have been by an amount directly or indirectly representing the whole or a part of the amount of the benefit.

(8)

Where—

(a)

any such circumstances as are mentioned in subsection (6)(a) above have arisen in relation to the relief the benefit of which has been obtained by the original taxpayer,

(b)

the person from whom, in the equivalent circumstances, the whole or any part of the amount of the benefit would have fallen to be recouped has accepted that, in the actual circumstances, the whole or a part of the benefit obtained by the original taxpayer may be recouped from him, and

(c)

that acceptance is indicated in writing to the Board (whether by the making or amendment of a self-assessment or otherwise),

that person’s rights subsequently to amend, appeal against or otherwise challenge any assessment shall not be exercised in any manner inconsistent with his acceptance of that matter (which shall be irrevocable).

(9)

In this section “concession” includes any practice, interpretation or other statement in the nature of a concession.

284B Provisions supplementary to section 284A.

(1)

Chargeable gains that are treated as accruing to any person under section 284A(3) shall not be eligible for taper relief.

(2)

The total amount of chargeable gains that are treated as accruing to any person under subsection (3) of section 284A in respect of any such benefit as is referred to in that subsection shall not exceed the amount of that benefit.

(3)

Where, after any assessment to tax has been made on the basis that any chargeable gain is treated as having accrued to any person under section 284A(3)—

(a)

the person assessed, within any of the periods allowed by subsection (4) below, gives an indication for the purposes of section 284A(8), or

(b)

a final determination of the original taxpayer’s liability to tax for the first chargeable period is made on the basis that the original taxpayer did not, or was not entitled to, rely on the concession in question,

all such adjustments shall be made (whether by way of assessment, amendment of an assessment, repayment of tax or otherwise) as are necessary to secure that no person is subjected to any greater liability by virtue of section 284A(3) than he would have been had the indication been given, or the final determination made, before the making of the assessment.

(4)

The periods allowed by this subsection are—

(a)

the period of twelve months beginning with the making of the assessment;

(b)

the period within which the person is entitled to amend his self-assessment or company tax return for the chargeable period in which the chargeable gain under section 284A(3) is treated as having accrued to him;

(c)

where the person makes a claim for any further relief against the amount that may be recouped from him by virtue of his indication under section 284A(8), the period allowed for making that claim.

(5)

Subsection (3) above has effect notwithstanding any time limits relating to the making or amendment of an assessment for any chargeable period.”

“CLASS 8 Assets within heads A and B below.

Head A Rights of a member of Lloyd’s under a syndicate within the meaning of Chapter III of Part II of the M63Finance Act 1993.

Head B An asset which a member of Lloyd’s is treated as having acquired by virtue of section 82 of the Finance Act 1999.”

“Section 86(4) of the Finance Act 1999.”

“(1B)

A dividend paid by a company shall not fall within sub-paragraph (1)(d) above if, and to the extent that, the profits which are the relevant profits in relation to the dividend derive from dividends or other distributions paid to the company at any time which are dividends or other distributions—

(a)

to which section 208 applied; or

(b)

to which that section would have applied if the company had been resident in the United Kingdom at that time.

Subsections (3) and (4) of section 799 (double taxation relief: computation of underlying tax) apply for the purposes of this sub-paragraph as they apply for the purposes of subsection (1) of that section.”

“75A Assessment on other claimant companies

(1)

This paragraph applies where, after the surrendering company has given notice of consent to surrender, a claimant company (“the chargeable company”) has become liable to tax in consequence of receiving—

(a)

notice of the withdrawal of consent, or a copy of a new notice of consent, under paragraph 75(3), or

(b)

a copy of a notice containing directions by the Inland Revenue under paragraph 75(4).

(2)

If any of the tax is unpaid six months after the chargeable company’s time limit for claims, the Inland Revenue may make an assessment to tax in the name of the chargeable company on any other company that has obtained group relief as a result of the surrender.

(3)

The assessment may not be made more than two years after that time limit.

(4)

The amount of the assessment must not exceed—

(a)

the amount of the unpaid tax, or

(b)

if less, the amount of tax which the other company saves by virtue of the surrender.

(5)

A company assessed to an amount of tax under sub-paragraph (2) is entitled to recover from the chargeable company—

(a)

a sum equal to that amount, and

(b)

any interest on that amount which it has paid under section 87A of the M69Taxes Management Act 1970 (interest on unpaid corporation tax).

(6)

For the purposes of this paragraph the chargeable company’s time limit for claims is the last of the dates mentioned in paragraph 74(1) on which the chargeable company could make or withdraw a claim for group relief for the accounting period for which the claim in question is made.”

“(3)

If an assessment under this paragraph is made because a claimant company fails, or is unable, to amend its company tax return under paragraph 75(6), the assessment is not out of time if it is made within one year from—

(a)

the date on which the surrendering company gives notice of the withdrawal of consent, or (if later) sends a copy of a new notice of consent, to the claimant company under paragraph 75(3), or

(b)

the date on which the Inland Revenue send the claimant company a copy of a notice containing their directions under paragraph 75(4).”

“15 Stamping after execution.

(1)

An unstamped or insufficiently stamped instrument may be stamped after being executed on payment of the unpaid duty and any interest or penalty payable.

(2)

Any interest or penalty payable on stamping shall be denoted on the instrument by a particular stamp.

15A Late stamping: interest.

(1)

Interest is payable on the stamping of an instrument which—

(a)

is chargeable withad valorem duty, and

(b)

is not duly stamped within 30 days after the day on which the instrument was executed (whether in the United Kingdom or elsewhere).

(2)

Interest is payable on the amount of the unpaid duty from the end of the period of 30 days mentioned in subsection (1)(b) until the duty is paid.

If an amount is lodged with the Commissioners in respect of the duty, the amount on which interest is payable is reduced by that amount.

(3)

Interest shall be calculated at the rate applicable under section 178 of the M95Finance Act 1989 (power of Treasury to prescribe rates of interest).

(4)

The amount of interest shall be rounded down (if necessary) to the nearest multiple of £5.

No interest is payable if that amount is less than £25.

(5)

Interest under this section shall be paid without any deduction of income tax and shall not be taken into account in computing income or profits for any tax purposes.

15B Late stamping: penalties.

(1)

A penalty is payable on the stamping of an instrument which is not presented for stamping within 30 days after—

(a)

if the instrument is executed in the United Kingdom, the day on which it is so executed;

(b)

if the instrument is executed outside the United Kingdom, the day on which it is first received in the United Kingdom.

(2)

If the instrument is presented for stamping within one year after the end of the 30-day period mentioned in subsection (1), the maximum penalty is £300 or the amount of the unpaid duty, whichever is less.

(3)

If the instrument is not presented for stamping until after the end of the one-year period mentioned in subsection (2), the maximum penalty is £300 or the amount of the unpaid duty, whichever is greater.

(4)

The Commissioners may, if they think fit, mitigate or remit any penalty payable on stamping.

(5)

No penalty is payable if there is a reasonable excuse for the delay in presenting the instrument for stamping.”.

“(aa)

section 15A of the Stamp Act 1891;”.

“, and

(p)

section 110 of the Finance Act 1999.”.

“(2)

There shall be no charge to tax under section 93 above in respect of a transfer, issue or appropriation of an inland bearer instrument, within the meaning of the heading “Bearer Instrument” in Schedule 1 to the Stamp Act 1891, except in the case of—

(a)

an instrument within exemption 3 in that heading (renounceable letters of allotment etc. where rights are renounceable not later than six months after issue); or

(b)

an instrument within the stamp duty exemption for non-sterling instruments which is issued in connection with a company merger or takeover (whether or not involving the company issuing the instrument).

In paragraph (b) “the stamp duty exemption for non-sterling instruments” means the exemption from stamp duty provided for by section 30 of the Finance Act 1967 or section 7 of the Finance Act (Northern Ireland) 1967.”.

“(3)

There shall be no charge to tax under section 96 above in respect of a transfer or issue of an inland bearer instrument, within the meaning of the heading “Bearer Instrument” in Schedule 1 to the Stamp Act 1891, except in the case of—

(a)

an instrument within exemption 3 in that heading (renounceable letters of allotment etc. where rights are renounceable not later than six months after issue); or

(b)

an instrument within the stamp duty exemption for non-sterling instruments which is issued in connection with a company merger or takeover (whether or not involving the company issuing the instrument).

In paragraph (b) “the stamp duty exemption for non-sterling instruments” means the exemption from stamp duty provided for by section 30 of the Finance Act 1967 or section 7 of the Finance Act (Northern Ireland) 1967.”.