Finance Act 1996 Part I Excise Duties Alcoholic liquor duties Spirits: rate of duty. 1 1 In section 5 of the Alcoholic Liquor Duties Act 1979 (spirits), for “£20.60” there shall be substituted “ £19.78 ” . 2 This section shall be deemed to have come into force at 6 o’clock in the evening of 28th November 1995. Wine and made-wine: rates. 2 1 In the Table of rates of duty in Schedule 1 to the Alcoholic Liquor Duties Act 1979 (wine and made-wine)— a in Part I of the Table for “200.64”, where it appears as the rate for wine or made-wine of a strength exceeding 15 per cent. but not exceeding 22 per cent., there shall be substituted “ 187.24 ” ; and b in Part II of that Table (wine or made-wine of a strength exceeding 22 per cent.), for “20.60” there shall be substituted “ 19.78 ” . 2 Paragraph (a) of subsection (1) above shall be deemed to have come into force on 1st January 1996 and paragraph (b) shall be deemed to have come into force at 6 o’clock in the evening of 28th November 1995. Cider: rate of duty. 3 1 In subsection (1) of section 62 of the Alcoholic Liquor Duties Act 1979 (cider), for “rate of £23.78 per hectolitre” there shall be substituted “ rates shown in subsection (1A) below. ” 2 After that subsection there shall be inserted the following subsection— 1A The rates at which the duty shall be charged are— a £35.67 per hectolitre in the case of cider of a strength exceeding 7.5 per cent.; and b £23.78 per hectolitre in any other case. 3 This section shall come into force on 1st October 1996. Hydrocarbon oil duties Rates of duty and rebate. 4 1 In section 6(1) of the Hydrocarbon Oil Duties Act 1979, for “£0.3614” (duty on light oil) and “£0.3132” (duty on heavy oil) there shall be substituted “ £0.3912 ” and “ £0.3430 ” , respectively. 2 In section 8(3) of that Act (duty on road fuel gas), for “£0.3314” there shall be substituted “ £0.2817 ” . 3 In section 11(1) of that Act (rebate on heavy oil), for “£0.0166” (fuel oil) and “£0.0214” (gas oil) there shall be substituted “ £0.0181 ” and “ £0.0233 ” , respectively. 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 In section 14(1) of that Act (rebate on light oil for use as furnace fuel), for “£0.0166” there shall be substituted “ £0.0181 ” . 7 Subsections (1) to (3) and (6) above shall be deemed to have come into force at 6 o’clock in the evening of 28th November 1995; and subsection (4) above shall come into force on 15th May 1996. Misuse of rebated kerosene. 5 1 The Hydrocarbon Oil Duties Act 1979 shall be amended as mentioned in subsections (2) to (5) below. 2 In section 11(1) (rebate on heavy oil), for “and 13” there shall be substituted “ 13, 13AA and 13AB ” . 3 In section 12(2) (restriction on use of rebated heavy oil for road vehicles), after “allowed” there shall be inserted “ (whether under section 11(1) above or 13AA(1) below) ” . 4 After section 13 there shall be inserted the following sections— Restrictions on use of rebated kerosene. 13AA 1 If, on the delivery of kerosene for home use, it is intended to use the kerosene as fuel for— a an engine provided for propelling an excepted vehicle, or b an engine which is used neither for propelling a vehicle nor for heating, a declaration shall be made to that effect and thereupon rebate shall be allowed at the rate for rebated gas oil which is then in force, instead of at the rate then in force under section 11(1)(c) above. 2 Subject to subsection (3) below, no kerosene on whose delivery for home use a rebate at the rate given by section 11(1)(c) above has been allowed shall— a be used as fuel for an engine provided for propelling an excepted vehicle; b be used as fuel for an engine which is used neither for propelling a vehicle nor for heating; or c be taken into the fuel supply of an engine falling within paragraph (a) or (b) above. 3 Subsection (2) above does not apply to any quantity of kerosene in respect of which there has been paid to the Commissioners an amount equal to duty on the same quantity of gas oil at the rate for rebated gas oil which is in force at the time of the payment. 4 A payment under subsection (3) above shall be made in accordance with regulations made under section 24(1) below for the purposes of this section. 5 For the purposes of this section and section 13AB below— “ excepted vehicle ” means a vehicle which is an excepted vehicle under any provision of Schedule 1 to this Act; and “ kerosene ” means heavy oil of which more than 50 per cent. by volume distils at a temperature of 240°C or less. 6 For the purposes of this section and section 13AB below the rate for rebated gas oil which is in force at any time is the rate of duty which at that time is in force under section 6(1) above in the case of heavy oil as reduced by the rate of rebate allowable at that time under section 11(1)(b) above. Penalties for misuse of kerosene. 13AB 1 If a person uses kerosene in contravention of section 13AA(2) above— a the Commissioners may recover from him, in respect of the quantity of kerosene used, an amount equal to duty on the same quantity of gas oil at the rate for rebated gas oil which is in force at the time of the contravention; b his use of the kerosene shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties); and c if he uses the kerosene with the relevant intent, he shall be guilty of an offence. 2 If a person is liable for kerosene being taken into a fuel supply of an engine in contravention of section 13AA(2) above— a the Commissioners may recover from him, in respect of the quantity of kerosene taken into the fuel supply, an amount equal to duty on the same quantity of gas oil at the rate for rebated gas oil which is in force at the time of the contravention; b his becoming so liable shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties); and c if he has the relevant intent in relation to the kerosene being taken into the fuel supply, he shall be guilty of an offence. 3 For the purposes of subsection (2) above, a person is liable for kerosene being taken into a fuel supply of an engine if at the time— a he has the charge of the engine; or b subject to subsection (4) below, he is the owner of the engine. 4 If a person other than the owner is for the time being entitled to possession of the engine, that other person and not the owner is liable. 5 If— a a person supplies kerosene having reason to believe that it will be put to a particular use, and b that use is one which, if a payment is not made under subsection (3) of section 13AA above, will contravene subsection (2) of that section, his supplying the kerosene shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties) and, if he makes the supply with the relevant intent, he shall be guilty of an offence. 6 In this section “ the relevant intent ” means the intent that the restrictions imposed by section 13AA(2) above shall be contravened. 7 A person guilty of an offence under this section shall be liable— a on summary conviction, to a penalty of the statutory maximum, or to imprisonment for a term not exceeding 6 months, or to both; b on conviction on indictment, to a penalty of any amount, or to a term of imprisonment not exceeding 7 years, or to both. 8 Any kerosene falling within subsection (9) or (10) below is liable to forfeiture. 9 Kerosene falls within this subsection if it is taken into a fuel supply in contravention of section 13AA(2) above. 10 Kerosene falls within this subsection if— a it has been supplied in circumstances in which there is reason to believe that it will be put to a particular use; and b that use is one which, if payment is not made under subsection (3) of section 13AA above, will contravene subsection (2) of that section. 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 This section shall have effect in relation to cases where kerosene is— a used as fuel, or b taken into a fuel supply, on or after such day as the Commissioners of Customs and Excise may by order made by statutory instrument appoint. Mixing of rebated oil. 6 1 The Hydrocarbon Oil Duties Act 1979 shall be amended as mentioned in subsections (2) to (4) below. 2 In section 20 (contaminated or accidentally mixed oil), after subsection (3) there shall be inserted the following subsection— 4 The power to make a payment to a person under subsection (2) above in relation to oils that have become accidentally mixed does not apply in relation to a mixture in respect of which he is liable to pay duty under section 20AAA below. 3 After section 20A there shall be inserted the following sections— Mixing of rebated oil. 20AAA 1 Where— a a mixture which is leaded or unleaded petrol is produced in contravention of Part I of Schedule 2A to this Act, and b the mixture is not produced as a result of approved mixing, a duty of excise shall be charged on the mixture. 2 Where— a a mixture of heavy oils is produced in contravention of Part II of Schedule 2A to this Act, b the mixture is not produced as a result of approved mixing, and c the mixture is supplied for use as fuel for a road vehicle or an excepted vehicle, a duty of excise shall be charged on the mixture. 3 The person liable to pay the duty charged under subsection (1) above is the person producing the mixture. 4 The person liable to pay the duty charged under subsection (2) above is the person supplying the mixture. 5 The Commissioners may exempt a person from liability to pay duty charged under this section in respect of the production or supply of a mixture if they are satisfied— a that the mixture has been produced or (as the case may be) supplied accidentally; and b that, having regard to all the circumstances, the person should be exempted from liability to pay the duty. 6 Part III of Schedule 2A to this Act makes provision with respect to rates and amounts of duty charged under this section. 7 In this section— “ approved mixing ” has the meaning given by section 20A(5) above; and “ excepted vehicle ” means a vehicle which is an excepted vehicle under any provision of Schedule 1 to this Act. Mixing of rebated oil: supplementary. 20AAB 1 A person who— a produces a mixture on which duty is charged under section 20AAA(1) above, or b supplies a mixture on which duty is charged under section 20AAA(2) above, must notify the Commissioners that he has done so within the period of seven days beginning with the date on which he produced or (as the case may be) supplied the mixture. 2 A person is not required to give a notification under subsection (1) above if, before he produced or (as the case may be) supplied the mixture, he notified the Commissioners that he proposed to do so. 3 Notification under subsection (1) or (2) above must be given in such form and in such manner, and must contain such particulars, as the Commissioners may direct. 4 Subject to subsection (7) below, where it appears to the Commissioners— a that a person has produced or supplied a mixture on which duty is charged under section 20AAA above, and b that he is the person liable to pay the duty, they may assess the amount of duty due from him to the best of their judgement and notify that amount to him or his representative. 5 An assessment under subsection (4) above shall be treated as if it were an assessment under section 12(1) of the Finance Act 1994. 6 The Commissioners may give a direction that a person who is, or expects to be, liable to pay duty charged under section 20AAA above— a shall account for duty charged under that section by reference to such periods (“accounting periods”) as may be determined by or under the direction; b shall make, in relation to accounting periods, returns in such form and at such times and containing such particulars as may be so determined; c shall pay duty charged under that section at such times and in such manner as may be so determined. 7 The power to make an assessment under subsection (4) above does not apply in relation to a person who is for the time being subject to a direction under subsection (6) above. 8 Where any person— a fails to give a notification which he is required to give under subsection (1) above, or b fails to comply with a direction under subsection (6) above, his failure shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties). 4 After Schedule 2 there shall be inserted the Schedule set out in Schedule 1 to this Act. 5 This section and Schedule 1 to this Act shall have effect in relation to— a the production on or after the appointed day of a mixture which is leaded or unleaded petrol; and b the supply on or after the appointed day of a mixture of heavy oils; and “ the appointed day ” here means such day as the Commissioners of Customs and Excise may by order made by statutory instrument appoint. Marked oil used as fuel for road vehicles. 7 1 After section 24 of the Hydrocarbon Oil Duties Act 1979 (control of use of duty free and rebated oil) there shall be inserted the following section— Penalties for misuse of marked oil. 24A 1 Marked oil shall not be used as fuel for a road vehicle. 2 For the purposes of this section marked oil is any hydrocarbon oil in which a marker is present which is for the time being designated by regulations made by the Commissioners under subsection (3) below. 3 The Commissioners may for the purposes of this section designate any marker which appears to them to be used for the purposes of the law of any place (whether within or outside the United Kingdom) for identifying hydrocarbon oil that is not to be used as fuel for road vehicles, or for road vehicles of a particular description. 4 For the purposes of this section marked oil shall be taken to be used as fuel for a road vehicle if, but only if, it is used as fuel for the engine provided for propelling the vehicle or for an engine which draws its fuel from the same supply as that engine. 5 Where a person uses any hydrocarbon oil in contravention of subsection (1) above, his use of the oil shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties). 6 If a person who uses any marked oil in contravention of subsection (1) above does so in the knowledge that the oil he is using is marked oil, he shall be guilty of an offence and liable— a on summary conviction, to a penalty of the statutory maximum, or to imprisonment for a term not exceeding 6 months, or to both; b on conviction on indictment, to a penalty of any amount, or to a term of imprisonment not exceeding 7 years, or to both. 7 Any marked oil which is in a road vehicle as part of the fuel supply for the engine which propels the vehicle shall be liable to forfeiture. 8 Where in any proceedings relating to this section a question arises as to the nature of any substance present at any time in any hydrocarbon oil— a a certificate of the Commissioners to the effect that that substance is or was a marker designated for the purposes of this section shall be sufficient, unless the contrary is shown, for establishing that fact; and b any document purporting to be such a certificate shall be taken to be one unless it is shown not to be. 2 In section 24(1) of that Act (purposes for which regulations may be made), for “or section 19A above” there shall be inserted “ , section 19A or section 24A of this Act ” . Relief for marine voyages. 8 1 The following provisions of the Hydrocarbon Oil Duties Act 1979 are hereby repealed— a section 18 (fuel for ships in home waters), and b in subsection (1) of section 19 (fuel used in fishing boats, etc. ), paragraph(a) and the words from “by the owner” to “be”. 2 This section shall come into force on such day as the Commissioners of Customs and Excise may by order made by statutory instrument appoint. Tobacco products duty Rates of duty. 9 1 For the Table of rates of duty in Schedule 1 to the Tobacco Products Duty Act 1979 there shall be substituted— 1. Cigarettes An amount equal to 20 per cent. of the retail price plus £62.52 per thousand cigarettes. 2. Cigars £91.52 per kilogram. 3. Hand-rolling tobacco £85.94 per kilogram. 4. Other smoking tobacco and chewing tobacco £40.24 per kilogram. 2 This section shall be deemed to have come into force at 6 o’clock in the evening of 28th November 1995. Betting duties: rates General betting duty. 10 1 In section 1(2) of the Betting and Gaming Duties Act 1981 (rate of general betting duty), for “7.75 per cent.” there shall be substituted “ 6.75 per cent. ” 2 This section shall apply in relation to bets made on or after 1st March 1996. Pool betting duty. 11 In section 7(1) of the Betting and Gaming Duties Act 1981 (rate of pool betting duty), for “32.50 per cent” there shall be substituted— a in relation to bets the stake money on which has been or is paid on or after 3rd December 1995 and before the first Sunday to follow the day on which this Act is passed, “ 27.50 per cent. ” ; and b in relation to bets the stake money on which is paid on or after that first Sunday, “ 26.50 per cent. ” Amusement machine licence duty Licences for machines as well as premises. 12 1 In subsection (1) of section 21 of the Betting and Gaming Duties Act 1981 (requirement for amusement machine licence with respect to premises), at the end there shall be inserted “ or the machine ” . 2 In subsection (2) of that section (licences to be known as amusement machine licences), at the end there shall be inserted “ and, if it is granted with respect to a machine, rather than with respect to premises, as a special amusement machine licence. ” 3 After subsection (3) of that section there shall be inserted the following subsections— 3AA A special amusement machine licence shall not be granted except where— a the machine with respect to which it is granted is of a description of machine for which special amusement machine licences are available; b such conditions as may be prescribed by regulations made by the Commissioners are satisfied in relation to the application for the licence, the machine and the person by whom the application is made; and c the licence is for twelve months. 3AB Special amusement machine licences shall be available for amusement machines of each of the following descriptions— a machines that are not gaming machines; and b small prize machines. 4 In section 24(4) of that Act (provision of unlicensed machines), at the end there shall be inserted “ or the machines ” . 5 In paragraph 4 of Schedule 4 to that Act (seasonal licences), after sub-paragraph (7) there shall be inserted the following sub-paragraph— 7AA Sub-paragraphs (4) and (5) above shall have effect where— a an amusement machine is provided on any premises at any time in a winter period, and b the provision of that machine on those premises at that time is authorised by a special amusement machine licence, as if an amusement machine licence had been granted in respect of those premises for that winter period. 6 Paragraph 5 of that Schedule shall become sub-paragraph (1) of that paragraph, and after that sub-paragraph there shall be inserted the following sub-paragraphs— 2 Regulations may provide for this Schedule to have effect in relation to special amusement machine licences with such exceptions, adaptations and modifications as may be prescribed. 3 Without prejudice to the generality of sub-paragraphs (1) and (2) above, regulations may include provision requiring— a a special amusement machine licence to be displayed on such premises and in such manner, and b the machine to which such a licence relates to bear such labels and marks, as may be determined by directions given, in accordance with the regulations, by the Commissioners. Air passenger duty Pleasure flights. 13 1 In section 31 of the Finance Act 1994 (air passenger duty: exceptions for certain passengers) after subsection (4) there shall be inserted— 4A A passenger is not a chargeable passenger in relation to a flight if under his agreement for carriage (whether or not it is evidenced by a ticket)— a the flight is to depart from and return to the same airport, and b the duration of the flight (excluding any period during which the aircraft’s doors are open for boarding or disembarkation) is not to exceed 60 minutes. 2 In section 32 of that Act (change of circumstances after ticket issued etc.)— a in subsection (1) (which provides that that section applies where a person’s agreement for carriage is evidenced by a ticket) for the words “This section applies” there shall be substituted the words “ Subsections (2) and (3) below apply ” ; b after subsection (3) there shall be added— 4 Where— a at the time a passenger’s flight begins, by virtue of section 31(4A) above he would not (assuming there is no change of circumstances) be a chargeable passenger in relation to the flight, and b by reason only of a change of circumstances not attributable to any act or default of his, the flight does not return to the airport from which it departed or exceeds 60 minutes in duration (excluding any period during which the aircraft’s doors are open for boarding or disembarkation), he shall not by reason of the change of circumstances be treated as a chargeable passenger in relation to that flight. Vehicle excise duty Increase in general rate. 14 1 In Schedule 1 to the Vehicle Excise and Registration Act 1994 (annual rates of duty), in paragraph 1(2) (the general rate), for “£135” there shall be substituted “ £140 ” . 2 Subsection (1) above applies in relation to licences taken out after 28th November 1995. Electrically propelled vehicles. 15 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 In section 62 of that Act (definitions), after subsection (1) there shall be inserted the following subsection— 1A For the purposes of this Act, a vehicle is not an electrically propelled vehicle unless the electrical motive power is derived from— a a source external to the vehicle, or b an electrical storage battery which is not connected to any source of power when the vehicle is in motion. 4 Subsections (1) to (3) above apply in relation to licences taken out after 28th November 1995. 5 In Schedule 2 to that Act (exemptions), after paragraph 2 there shall be inserted the following paragraph— Electrically assisted pedal cycles 2A 1 An electrically assisted pedal cycle is an exempt vehicle. 2 For the purposes of sub-paragraph (1) an electrically assisted pedal cycle is a vehicle of a class complying with such requirements as may be prescribed by regulations made by the Secretary of State for the purposes of this paragraph. Steam powered vehicles etc. 16 1 In Schedule 1 to the Vehicle Excise and Registration Act 1994 (annual rates of duty), after paragraph 4E there shall be inserted the following paragraph— 4EE A steam powered vehicle is a special concessionary vehicle. 2 In paragraph 3 of that Schedule (buses), in sub-paragraph (2)(b) (vehicles which are not buses), after “excepted vehicle” there shall be inserted “ or a special concessionary vehicle ” . 3 In paragraph 4(2) of that Schedule (meaning of “special vehicle”), for “and is” there shall be substituted “ which is not a special concessionary vehicle and which is ” . 4 In paragraph 5 of that Schedule (recovery vehicles), after sub-paragraph (5) there shall be inserted the following sub-paragraph— 5A A vehicle is not a recovery vehicle if it is a special concessionary vehicle. 5 In paragraph 6(1) of that Schedule (vehicles used for exceptional loads), after paragraph (b) there shall be inserted— and which is not a special concessionary vehicle. 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 This section applies in relation to licences taken out after 28th November 1995. Vehicles capable of conveying loads. 17 1 Schedule 1 to the Vehicle Excise and Registration Act 1994 (annual rates of duty) shall be amended in accordance with subsections (2) to (8) below. 2 In paragraph 4(2) (meaning of “special vehicle”), immediately before paragraph (c) there shall be inserted the following paragraph— bb a vehicle falling within sub-paragraph (2A) or (2B), . 3 After sub-paragraph (2) of paragraph 4 there shall be inserted the following sub-paragraphs— 2A A vehicle falls within this sub-paragraph if— a it is designed or adapted for use for the conveyance of goods or burden of any description; but b it is not so used or is not so used for hire or reward or for or in connection with a trade or business. 2B A vehicle falls within this sub-paragraph if— a it is designed or adapted for use with a semi-trailer attached; but b it is not so used or, if it is so used, the semi-trailer is not used for the conveyance of goods or burden of any description. 4 In paragraph 9(2) (rigid goods vehicles which are subject to basic goods vehicle rate), after paragraph (b) there shall be inserted and c to any rigid goods vehicle which is used loaded only in connection with a person learning to drive the vehicle or taking a driving test, . 5 In paragraph 10(1) (trailer supplement), after “exceeding 12,000 kilograms” there shall be inserted “ , which does not fall within paragraph 9(2)(b) or (c) ” . 6 In paragraph 11(2) (tractive units which are subject to basic goods vehicle rate), after paragraph (b) there shall be inserted and c to any tractive unit to which a semi-trailer is attached which is used loaded only in connection with a person learning to drive the tractive unit or taking a driving test, . 7 In paragraph 16(1) (cases where Part VIII of Schedule 1 does not apply), paragraph (b), and the word “or” immediately preceding it, shall be omitted. 8 After paragraph 18 there shall be inserted the following paragraph— Other expressions 19 1 In this Part “ driving test ” means any test of competence to drive mentioned in section 89(1) of the Road Traffic Act 1988. 2 For the purposes of this Part a vehicle or a semi-trailer is used loaded if the vehicle or, as the case may be, the semi-trailer is used for the conveyance of goods or burden of any description. 9 In section 7 of the Vehicle Excise and Registration Act 1994 (issue of licences), in subsection (2) (declarations and particulars in relation to goods vehicles)— a after “goods vehicle” there shall be inserted “ or a special vehicle ” ; and b after “goods vehicles” there shall be inserted “ or, as the case may be, special vehicles ” . 10 After subsection (7) of that section there shall be inserted the following subsection— 8 In this section “special vehicle” has the same meaning as in paragraph 4 of Schedule 1. 11 Subject to subsection (13) below, subsections (1) to (8) above apply in relation to licences taken out after 28th November 1995. 12 Subsection (13) below applies where a vehicle licence is taken out— a on or before 28th November 1995, and b at the rate applicable (at the time it is taken out) under Schedule 1 to the Vehicle Excise and Registration Act 1994. 13 While the licence is in force duty shall not, by virtue of this section, become chargeable under section 15 of that Act (vehicle used in manner attracting higher rate). 14 Subsections (9) and (10) above apply in relation to applications made after 28th November 1995. 15 Paragraph 15 of Schedule 1 to that Act (which is unnecessary) shall be omitted. Old vehicles. 18 1 In Schedule 2 to the Vehicle Excise and Registration Act 1994 (exempt vehicles), immediately before paragraph 2 there shall be inserted the following paragraph— Old vehicles 1A 1 A vehicle of a description mentioned in sub-paragraph (2) is an exempt vehicle at any time if it was constructed more than 25 years before the beginning of the year in which that time falls. 2 The descriptions of vehicles are— a a vehicle in respect of which no annual rate is specified by any provision of Parts II to VIII of Schedule 1; b a motorcycle which does not exceed 450 kilograms in weight unladen. 3 In sub-paragraph (2)(b) “motorcycle” has the same meaning as in Part II of Schedule 1. 2 In Schedule 1 to that Act (annual rates of duty), in paragraph 1 (rate for vehicle for which no other rate is specified)— a for paragraphs (a) and (b) of sub-paragraph (1) there shall be substituted “ the general rate ” ; and b sub-paragraphs (3) to (5) shall be omitted; and, in paragraph 2 (motorcycles), sub-paragraph (2) shall be omitted. 3 In section 2(4) of that Act (rate of duty for vehicle not currently in use and for which no previous licence issued), for the words from “whichever” to the end there shall be substituted “ the general rate currently specified in paragraph 1(2) of Schedule 1 ” . 4 In that Act— a in section 13 (trade licences), in subsection (3)(b), b in section 13 as substituted under paragraph 8 of Schedule 4, in subsection (4)(b), and c in section 36(3)(b) (additional liability where cheque dishonoured), for “1(1)(a)” there shall be substituted “ 1 ” . 5 This section has effect in relation to times after 28th November 1995. Old vehicles: further provisions. 19 1 In Schedule 2 to the Vehicle Excise and Registration Act 1994 (exempt vehicles), for paragraph 1A (inserted by section 18 above) there shall be substituted the following paragraph— Old vehicles 1A 1 Subject to sub-paragraph (2), a vehicle is an exempt vehicle at any time if it was constructed more than 25 years before the beginning of the year in which that time falls. 2 A vehicle is not an exempt vehicle by virtue of sub-paragraph (1) if— a an annual rate is specified in respect of it by any provision of Part III, V, VI , VII or VIII of Schedule 1; or b it is a special vehicle, within the meaning of Part IV of Schedule 1, which— i falls within sub-paragraph (3) or (4); and ii is not a digging machine, mobile crane, works truck or road roller. 3 A vehicle falls within this sub-paragraph if— a it is designed or adapted for use for the conveyance of goods or burden of any description; b it is put to a commercial use on a public road; and c that use is not a use for the conveyance of goods or burden of any description. 4 A vehicle falls within this sub-paragraph if— a it is designed or adapted for use with a semi-trailer attached; b it is put to a commercial use on a public road; and c in a case where that use is a use with a semi-trailer attached, the semi-trailer is not used for the conveyance of goods or burden of any description. 5 In sub-paragraph (2) “digging machine”, “mobile crane” and “works truck” have the same meanings as in paragraph 4 of Schedule 1. 6 In sub-paragraphs (3) and (4) “ commercial use ” means use for hire or reward or for or in connection with a trade or business. 2 This section has effect in relation to times on or after 1st June 1996. Exemptions for vehicle testing: general. 20 1 Paragraph 22 of Schedule 2 to the Vehicle Excise and Registration Act 1994 (exemption for vehicle testing) shall be amended as follows. 2 In sub-paragraph (1) (use for the purposes of submitting a vehicle to, or bringing it away from, a compulsory test), after the words “compulsory test”, in each place where they occur, there shall be inserted “ or a vehicle weight test ” . 3 After sub-paragraph (1) there shall be inserted the following sub-paragraph— 1A A vehicle is an exempt vehicle when it is being used solely for the purpose of— a taking it (by previous arrangement for a specified time on a specified date) for a relevant re-examination, or b bringing it away from such a re-examination. 4 In sub-paragraph (2) (use by an authorised person in the course of compulsory test)— a after “compulsory test” there shall be inserted “ , a vehicle weight test or a relevant re-examination and is being so used ” ; and b in paragraphs (a) and (b), after the words “the test”, in each place where they occur, there shall be inserted “ or re-examination ” . 5 After sub-paragraph (2) there shall be inserted the following sub-paragraph— 2A A vehicle is an exempt vehicle when it is being used by an authorised person solely for the purpose of warming up its engine in preparation for the carrying out of— a a compulsory test, or b a relevant re-examination that is to be carried out for the purposes of an appeal relating to a determination made on a compulsory test. 6 In sub-paragraph (3) (exemption applying where the relevant certificate is refused), after “a vehicle” there shall be inserted “ or as a result of a relevant re-examination, ” . 7 In sub-paragraph (5) (relevant examinations)— a for paragraph (a), there shall be substituted the following paragraph— a an examination under regulations under section 49(1)(b) or (c) of the Road Traffic Act 1988 (examination as to compliance with construction and use or safety requirements) ; b the word “ and ” shall be inserted at the end of paragraph (b); and c paragraph (c) (examinations for the purpose of an appeal under section 60 of the Road Traffic Act 1988) shall be omitted. 8 After sub-paragraph (6) there shall be inserted the following sub-paragraphs— 6A In this paragraph “ a vehicle weight test ” means any examination of a vehicle for which provision is made by regulations under— a section 61A of this Act, b section 49(1)(a) of the Road Traffic Act 1988 (tests for selecting plated weights and other plated particulars), or c Article 65(1)(a) of the Road Traffic (Northern Ireland) Order 1995. 6B In this paragraph “ a relevant re-examination ” means any examination or re-examination which is carried out in accordance with any provision or requirement made or imposed for the purposes of an appeal relating to a determination made on a compulsory test or vehicle weight test. 9 Subject to section 21(3) below, in sub-paragraph (7) (meaning of “authorised person”)— a the word “and” at the end of paragraph (b) shall be omitted; b at the end of paragraph (c) there shall be inserted the word “ and ” ; and c after that paragraph there shall be inserted the following paragraph— d in the case of a relevant re-examination— i the person to whom the appeal in question is made, or ii any person who, by virtue of an appointment made by that person, is authorised by or under any enactment to carry out that re-examination. 10 This section shall be deemed to have come into force on 28th November 1995. Exemptions for vehicle testing in Northern Ireland. 21 1 Paragraph 22 of Schedule 2 to the Vehicle Excise and Registration Act 1994 (exemption for vehicle testing) shall be further amended as follows. 2 For sub-paragraph (6) (meaning of “compulsory test” in Northern Ireland) there shall be substituted the following sub-paragraph— 6 In this paragraph “ compulsory test ” means, as respects Northern Ireland— a an examination to obtain a test certificate under Article 61 of the Road Traffic (Northern Ireland) Order 1995 without which a vehicle licence cannot be obtained for the vehicle, b an examination to obtain a goods vehicle test certificate under Article 65 of that Order, or c an examination to obtain a public service vehicle licence under Article 60(1) of the Road Traffic (Northern Ireland) Order 1981. 3 For paragraph (c) of sub-paragraph (7) (as amended by section 20(9) above) there shall be substituted the following paragraph— c in the case of an examination within sub-paragraph (6), an authorised examiner within the meaning of Article 61(3)(a) of the Road Traffic (Northern Ireland) Order 1995 or a vehicle examiner within the meaning of Part III of that Order; and . 4 In sub-paragraph (9) (meaning of “relevant certificate” in Northern Ireland), for paragraphs (a) and (b) there shall be substituted the following paragraphs— a a test certificate (within the meaning of Article 61(2) of the Road Traffic (Northern Ireland) Order 1995), b a goods vehicle test certificate (within the meaning of Article 65(2) of that Order), or . 5 In sub-paragraph (10)(a) (meaning of “relevant work”), the words “(or, in Northern Ireland, a vehicle test certificate)” shall be omitted. 6 This section shall be deemed to have come into force on the date of the coming into operation of Articles 61 and 65 of the Road Traffic (Northern Ireland) Order 1995 (“the operational date”). 7 Subsections (2), (4) and (5) above do not have effect in relation to a compulsory test carried out in Northern Ireland before the operational date except for the purpose of construing, in relation to such a test, the reference to a further compulsory test in paragraph 22(10)(a) of Schedule 2 to the Vehicle Excise and Registration Act 1994. Other provisions relating to Northern Ireland. 22 1 In section 42 of the Vehicle Excise and Registration Act 1994 (not fixing registration mark), in subsection (5)(b), for “Article 34 of the Road Traffic (Northern Ireland) Order 1981” there shall be substituted “ Article 63 of the Road Traffic (Northern Ireland) Order 1995 ” . 2 In subsection (6) of that section, for paragraph (b) there shall be substituted— b it is being driven for the purposes of, or in connection with, its examination under Article 61 of the Road Traffic (Northern Ireland) Order 1995 in circumstances in which its use is exempted from paragraph (1) of Article 63 of that Order by regulations under paragraph (6) of that Article. 3 In section 60A(11) of that Act (special maximum weight in Northern Ireland), for “Article 29(3) of the Road Traffic (Northern Ireland) Order 1981” there shall be substituted “ Article 60(1) of the Road Traffic (Northern Ireland) Order 1995 ” . 4 In section 61(6) of that Act (meaning of “weight unladen”), for paragraph (b) there shall be substituted— b in Northern Ireland, has the same meaning as it has for the purposes of the Road Traffic (Northern Ireland) Order 1995 by virtue of Article 7 of that Order. 5 In paragraph 6 of Schedule 1 to that Act (vehicles used for exceptional loads), in sub-paragraph (2) for paragraph (b) there shall be substituted— b Article 60 of the Road Traffic (Northern Ireland) Order 1995, . 6 In that paragraph— a in sub-paragraph (3)(a), for “Article 28 of the Road Traffic (Northern Ireland) Order 1981” there shall be substituted “ Article 55 of the Road Traffic (Northern Ireland) Order 1995 ” ; and b in sub-paragraph (4), for “the Road Traffic (Northern Ireland) Order 1981” there shall be substituted “ the Road Traffic (Northern Ireland) Order 1995 ” . 7 In paragraph 17 of Schedule 3 to that Act (amendments of the Road Traffic (Northern Ireland) Order 1981)— a in sub-paragraph (1), “29(2),” and “34(6),” shall be omitted, and b sub-paragraph (2) shall be omitted. Licensing and registration. 23 Schedule 2 to this Act (which makes provision in connection with powers conferred on the Secretary of State by the Vehicle Excise and Registration Act 1994) shall have effect. Repeal of certain drawbacks and allowances Repeal of certain drawbacks and allowances. 24 The following provisions (which provide for repayments, drawbacks or allowances in the case of certain excise duties) shall cease to have effect, that is to say— a section 3 of the Finance Act 1977 (repayment in respect of tobacco used in the manufacture of a tobacco product after having borne duty under section 4 of the Finance Act 1964); b section 22(6) of the Alcoholic Liquor Duties Act 1979 (additions in respect of waste which are deemed to be made to tinctures exported or shipped as stores); c section 23 of that Act of 1979 (allowances in respect of British compounded spirits); d section 92(6) of that Act of 1979 (transitional right to drawback); and e section 9(2) and (3) of the Isle of Man Act 1979 (removal to the Isle of Man treated as export for the purposes of drawback). Part II Value Added Tax EC Second VAT Simplification Directive EC Second VAT Simplification Directive. 25 Sections 26 to 29 of and Schedule 3 to this Act are for the purpose of giving effect to requirements of the directive of the Council of the European Communities dated 17th May 1977 No. 77/388/ EEC and the amendments of that directive by the directive of that Council dated 10th April 1995 No. 95/7/EC (amendments with a view to introducing new simplification measures with regard to value added tax). Fiscal and other warehousing. 26 1 The provisions of Schedule 3 to this Act shall have effect. 2 Subject to subsection (3) below, this section and Schedule 3 to this Act shall come into force on such day as the Commissioners of Customs and Excise may by order made by statutory instrument appoint, and shall apply to any acquisition of goods from another member State and any supply taking place on or after that day. 3 In so far as the provisions inserted by Schedule 3 to this Act confer power to make regulations they shall come into force on the day this Act is passed. Value of imported goods. 27 1 Section 21 of the Value Added Tax Act 1994 (value of imported goods) shall be amended as follows. 2 In subsection (2) of that section at the end of paragraph (a) the word “and” shall be omitted. 3 For paragraph (b) of that subsection there shall be substituted— b all incidental expenses, such as commission, packing, transport and insurance costs, up to the goods’ first destination in the United Kingdom; and c if at the time of the importation of the goods from a place outside the member States a further destination for the goods is known, and that destination is within the United Kingdom or another member State, all such incidental expenses in so far as they result from the transport of the goods to that other destination; and in this subsection “ the goods’ first destination ” means the place mentioned on the consignment note or any other document by means of which the goods are imported into the United Kingdom, or in the absence of such documentation it means the place of the first transfer of cargo in the United Kingdom. 4 This section shall have effect in relation to goods imported on or after 1st January 1996. Adaptation of aircraft and hovercraft. 28 1 Section 22 of the Value Added Tax Act 1994 shall be omitted. 2 This section shall apply to supplies made on or after 1st January 1996. Work on materials. 29 1 The Value Added Tax Act 1994 shall be amended as follows. 2 After subsection (2) of section 30 there shall be inserted the following subsection— 2A A supply by a person of services which consist of applying a treatment or process to another person’s goods is zero-rated by virtue of this subsection if by doing so he produces goods, and either— a those goods are of a description for the time being specified in Schedule 8; or b a supply by him of those goods to the person to whom he supplies the services would be of a description so specified. 3 In subsection (5) of section 55 (supplies of gold), after paragraph (b) there shall be inserted the following— ; or c any supply of services consisting in the application to another person’s goods of a treatment or process which produces goods a supply of which would fall within paragraph (a) above. ; and the word “or” at the end of paragraph (a) shall be omitted. 4 Paragraph 2 of Schedule 4 (which provides that the treatment or processing of another person’s goods shall in certain circumstances be a supply of goods) shall be omitted. 5 This section shall apply to supplies made on or after 1st January 1996. Other provisions relating to charges to VAT Refunds in connection with construction and conversion. 30 1 For subsection (1) of section 35 of the Value Added Tax Act 1994 (refund of VAT to persons constructing certain buildings) there shall be substituted the following subsections— 1 Where— a a person carries out works to which this section applies, b his carrying out of the works is lawful and otherwise than in the course or furtherance of any business, and c VAT is chargeable on the supply, acquisition or importation of any goods used by him for the purposes of the works, the Commissioners shall, on a claim made in that behalf, refund to that person the amount of VAT so chargeable. 1A The works to which this section applies are— a the construction of a building designed as a dwelling or number of dwellings; b the construction of a building for use solely for a relevant residential purpose or relevant charitable purpose; and c a residential conversion. 1B For the purposes of this section goods shall be treated as used for the purposes of works to which this section applies by the person carrying out the works in so far only as they are building materials which, in the course of the works, are incorporated in the building in question or its site. 1C Where— a a person (“the relevant person”) carries out a residential conversion by arranging for any of the work of the conversion to be done by another (“a contractor”), b the relevant person’s carrying out of the conversion is lawful and otherwise than in the course or furtherance of any business, c the contractor is not acting as an architect, surveyor or consultant or in a supervisory capacity, and d VAT is chargeable on services consisting in the work done by the contractor, the Commissioners shall, on a claim made in that behalf, refund to the relevant person the amount of VAT so chargeable. 1D For the purposes of this section works constitute a residential conversion to the extent that they consist in the conversion of a non-residential building, or a non-residential part of a building, into— a a building designed as a dwelling or a number of dwellings; b a building intended for use solely for a relevant residential purpose; or c anything which would fall within paragraph (a) or (b) above if different parts of a building were treated as separate buildings. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 After subsection (3) of that section there shall be inserted the following subsections— 4 The notes to Group 5 of Schedule 8 shall apply for construing this section as they apply for construing that Group. 5 The power of the Treasury by order under section 30 to vary Schedule 8 shall include— a power to apply any variation made by the order for the purposes of this section; and b power to make such consequential modifications of this section as they may think fit. 4 This section applies in relation to any case in which a claim for repayment under section 35 of the Value Added Tax Act 1994 is made at any time on or after the day on which this Act is passed. Groups: anti-avoidance. 31 1 In section 43 of the Value Added Tax Act 1994 (groups of companies), after subsection (8) there shall be inserted the following subsection— 9 Schedule 9A (which makes provision for ensuring that this section is not used for tax avoidance) shall have effect. 2 After Schedule 9 to that Act there shall be inserted the Schedule set out in Schedule 4 to this Act. 3 In section 83 of that Act (appeals), after paragraph (w) there shall be inserted the following paragraph— wa any direction or assessment under Schedule 9A; . 4 In section 84 of that Act (further provisions relating to appeals), after subsection (7) there shall be inserted the following subsection— 7A Where there is an appeal against a decision to make such a direction as is mentioned in section 83(wa), the cases in which the tribunal shall allow the appeal shall include (in addition to the case where the conditions for the making of the direction were not fulfilled) the case where the tribunal are satisfied, in relation to the relevant event by reference to which the direction was given, that— a the change in the treatment of the body corporate, or b the transaction in question, had as its main purpose or, as the case may be, as each of its main purposes a genuine commercial purpose unconnected with the fulfilment of the condition specified in paragraph 1(3) of Schedule 9A. 5 Subsection (1A) of section 43 of that Act shall not have effect in relation to supplies on or after the day on which this Act is passed. Supplies of gold etc. 32 1 In section 55 of the Value Added Tax Act 1994 (supplies of gold), for paragraph (a) of subsection (5) there shall be substituted the following paragraph— a any supply of goods consisting in fine gold, in gold grain of any purity or in gold coins of any purity; or . 2 This section applies in relation to any supply after 28th November 1995. Small gifts. 33 1 In Schedule 4 to the Value Added Tax Act 1994 (matters to be treated as supply of goods or services), in paragraph 5(2)(a) (gift of goods in the course or furtherance of a business not a supply if cost to donor is not more than £10), for “£10” there shall be substituted “ £15 ” . 2 At the end of paragraph 5 of Schedule 4 to that Act there shall be inserted the following sub-paragraph— 7 The Treasury may by order substitute for the sum for the time being specified in sub-paragraph (2)(a) above such sum, not being less than £10, as they think fit. 3 In section 97(4) of that Act (orders which are subject to affirmative procedure), after paragraph (a) there shall be inserted the following paragraph— ab an order under paragraph 5(7) of Schedule 4 substituting a lesser sum for the sum for the time being specified in paragraph 5(2)(a) of that Schedule; . 4 Subsection (1) above shall apply where a gift is made after 28th November 1995. Payment and enforcement Method of making payments on account. 34 In section 28 of the Value Added Tax Act 1994 (payments on account of VAT), after subsection (2) there shall be inserted the following subsection— 2A The Commissioners may give directions, to persons who are or may become liable by virtue of any order under this section to make payments on account of VAT, about the manner in which they are to make such payments; and where such a direction has been given to any person and has not subsequently been withdrawn, any duty of that person by virtue of such an order to make such a payment shall have effect as if it included a requirement for the payment to be made in the manner directed. Default surcharges. 35 1 The Value Added Tax Act 1994 shall be amended as follows. 2 After section 59 (default surcharge) there shall be inserted the following section— Default surcharge: payments on account. 59A 1 For the purposes of this section a taxable person shall be regarded as in default in respect of any prescribed accounting period if the period is one in respect of which he is required, by virtue of an order under section 28, to make any payment on account of VAT and either— a a payment which he is so required to make in respect of that period has not been received in full by the Commissioners by the day on which it became due; or b he would, but for section 59(1A), be in default in respect of that period for the purposes of section 59. 2 Subject to subsections (10) and (11) below, subsection (4) below applies in any case where— a a taxable person is in default in respect of a prescribed accounting period; and b the Commissioners serve notice on the taxable person (a “surcharge liability notice”) specifying as a surcharge period for the purposes of this section a period which— i begins, subject to subsection (3) below, on the date of the notice; and ii ends on the first anniversary of the last day of the period referred to in paragraph (a) above. 3 If— a a surcharge liability notice is served by reason of a default in respect of a prescribed accounting period, and b that period ends at or before the expiry of an existing surcharge period already notified to the taxable person concerned, the surcharge period specified in that notice shall be expressed as a continuation of the existing surcharge period; and, accordingly, the existing period and its extension shall be regarded as a single surcharge period. 4 Subject to subsections (7) to (11) below, if— a a taxable person on whom a surcharge liability notice has been served is in default in respect of a prescribed accounting period, b that prescribed accounting period is one ending within the surcharge period specified in (or extended by) that notice, and c the aggregate value of his defaults in respect of that prescribed accounting period is more than nil, that person shall be liable to a surcharge equal to whichever is the greater of £30 and the specified percentage of the aggregate value of his defaults in respect of that prescribed accounting period. 5 Subject to subsections (7) to (11) below, the specified percentage referred to in subsection (4) above shall be determined in relation to a prescribed accounting period by reference to the number of such periods during the surcharge period which are periods in respect of which the taxable person is in default and in respect of which the value of his defaults is more than nil, so that— a in relation to the first such prescribed accounting period, the specified percentage is 2 per cent.; b in relation to the second such period, the specified percentage is 5 per cent.; c in relation to the third such period, the specified percentage is 10 per cent.; and d in relation to each such period after the third, the specified percentage is 15 per cent. 6 For the purposes of this section the aggregate value of a person’s defaults in respect of a prescribed accounting period shall be calculated as follows— a where the whole or any part of a payment in respect of that period on account of VAT was not received by the Commissioners by the day on which it became due, an amount equal to that payment or, as the case may be, to that part of it shall be taken to be the value of the default relating to that payment; b if there is more than one default with a value given by paragraph (a) above, those values shall be aggregated; c the total given by paragraph (b) above, or (where there is only one default) the value of the default under paragraph (a) above, shall be taken to be the value for that period of that person’s defaults on payments on account; d the value of any default by that person which is a default falling within subsection (1)(b) above shall be taken to be equal to the amount of any outstanding VAT less the amount of unpaid payments on account; and e the aggregate value of a person’s defaults in respect of that period shall be taken to be the aggregate of— i the value for that period of that person’s defaults (if any) on payments on account; and ii the value of any default of his in respect of that period that falls within subsection (1)(b) above. 7 In the application of subsection (6) above for the calculation of the aggregate value of a person’s defaults in respect of a prescribed accounting period— a the amount of outstanding VAT referred to in paragraph (d) of that subsection is the amount (if any) which would be the amount of that person’s outstanding VAT for that period for the purposes of section 59(4); and b the amount of unpaid payments on account referred to in that paragraph is the amount (if any) equal to so much of any payments on account of VAT (being payments in respect of that period) as has not been received by the Commissioners by the last day on which that person is required (as mentioned in section 59(1)) to make a return for that period. 8 If a person who, apart from this subsection, would be liable to a surcharge under subsection (4) above satisfies the Commissioners or, on appeal, a tribunal— a in the case of a default that is material for the purposes of the surcharge and falls within subsection (1)(a) above— i that the payment on account of VAT was despatched at such a time and in such a manner that it was reasonable to expect that it would be received by the Commissioners by the day on which it became due, or ii that there is a reasonable excuse for the payment not having been so despatched, or b in the case of a default that is material for the purposes of the surcharge and falls within subsection (1)(b) above, that the condition specified in section 59(7)(a) or (b) is satisfied as respects the default, he shall not be liable to the surcharge and for the purposes of the preceding provisions of this section he shall be treated as not having been in default in respect of the prescribed accounting period in question (and, accordingly, any surcharge liability notice the service of which depended upon that default shall be deemed not to have been served). 9 For the purposes of subsection (8) above, a default is material to a surcharge if— a it is the default which, by virtue of subsection (4) above, gives rise to the surcharge; or b it is a default which was taken into account in the service of the surcharge liability notice upon which the surcharge depends and the person concerned has not previously been liable to a surcharge in respect of a prescribed accounting period ending within the surcharge period specified in or extended by that notice. 10 In any case where— a the conduct by virtue of which a person is in default in respect of a prescribed accounting period is also conduct falling within section 69(1), and b by reason of that conduct, the person concerned is assessed to a penalty under section 69, the default shall be left out of account for the purposes of subsections (2) to (5) above. 11 If the Commissioners, after consultation with the Treasury, so direct, a default in respect of a prescribed accounting period specified in the direction shall be left out of account for the purposes of subsections (2) to (5) above. 12 For the purposes of this section the Commissioners shall be taken not to receive a payment by the day on which it becomes due unless it is made in such a manner as secures (in a case where the payment is made otherwise than in cash) that, by the last day for the payment of that amount, all the transactions can be completed that need to be completed before the whole amount of the payment becomes available to the Commissioners. 13 In determining for the purposes of this section whether any person would, but for section 59(1A), be in default in respect of any period for the purposes of section 59, subsection (12) above shall be deemed to apply for the purposes of section 59 as it applies for the purposes of this section. 14 For the purposes of this section references to a thing’s being done by any day include references to its being done on that day. 3 In section 59, at the beginning of subsection (1) (circumstances amounting to a default in respect of any prescribed accounting period), there shall be inserted “Subject to subsection (1A) below”; and after that subsection there shall be inserted the following subsection— 1A A person shall not be regarded for the purposes of this section as being in default in respect of any prescribed accounting period if that period is one in respect of which he is required by virtue of any order under section 28 to make any payment on account of VAT. 4 After subsection (10) of that section there shall be inserted the following subsection— 11 For the purposes of this section references to a thing’s being done by any day include references to its being done on that day. 5 After the section 59A inserted by subsection (2) above there shall be inserted the following section— Relationship between sections 59 and 59A. 59B 1 This section applies in each of the following cases, namely— a where a section 28 accounting period ends within a surcharge period begun or extended by the service on a taxable person (whether before or after the coming into force of section 59A) of a surcharge liability notice under section 59; and b where a prescribed accounting period which is not a section 28 accounting period ends within a surcharge period begun or extended by the service on a taxable person of a surcharge liability notice under section 59A. 2 In a case falling within subsection (1)(a) above section 59A shall have effect as if— a subject to paragraph (b) below, the section 28 accounting period were deemed to be a period ending within a surcharge period begun or, as the case may be, extended by a notice served under section 59A; but b any question— i whether a surcharge period was begun or extended by the notice, or ii whether the taxable person was in default in respect of any prescribed accounting period which was not a section 28 accounting period but ended within the surcharge period begun or extended by that notice, were to be determined as it would be determined for the purposes of section 59. 3 In a case falling within subsection (1)(b) above section 59 shall have effect as if— a subject to paragraph (b) below, the prescribed accounting period that is not a section 28 accounting period were deemed to be a period ending within a surcharge period begun or, as the case may be, extended by a notice served under section 59; b any question— i whether a surcharge period was begun or extended by the notice, or ii whether the taxable person was in default in respect of any prescribed accounting period which was a section 28 accounting period but ended within the surcharge period begun or extended by that notice, were to be determined as it would be determined for the purposes of section 59A; and c that person were to be treated as having had outstanding VAT for a section 28 accounting period in any case where the aggregate value of his defaults in respect of that period was, for the purposes of section 59A, more than nil. 4 In this section “ a section 28 accounting period ”, in relation to a taxable person, means any prescribed accounting period ending on or after the day on which the Finance Act 1996 was passed in respect of which that person is liable by virtue of an order under section 28 to make any payment on account of VAT. 6 In section 69(4)(a) and (9)(b) (disregard in connection with penalties for breach of regulations of conduct giving rise to a surcharge), after the words “section 59”, in each case, there shall be inserted “ or 59A ” . 7 In section 76(1) and (3)(a) (assessments for surcharges), after the words “section 59”, in each case, there shall be inserted “ or 59A ” . 8 This section applies in relation to any prescribed accounting period ending on or after 1st June 1996, but a liability to make a payment on account of VAT shall be disregarded for the purposes of the amendments made by this section if the payment is one becoming due before that date. Repeated misdeclaration penalty. 36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Penalties for failure to notify. 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VAT invoices and accounting. 38 1 Paragraph 2 of Schedule 11 to the Value Added Tax Act 1994 (regulations about accounting for VAT, VAT invoices etc.) shall be amended as follows. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 In sub-paragraph (10) (adjustments of VAT accounts), at the end of paragraph (c) there shall be inserted and d for a person, for purposes connected with the making of any such entry or financial adjustment, to be required to provide to any prescribed person, or to retain, a document in the prescribed form containing prescribed particulars of the matters to which the entry or adjustment relates; and e for enabling the Commissioners, in such cases as they may think fit, to dispense with or relax a requirement imposed by regulations made by virtue of paragraph (d) above. Part III Landfill Tax The basic provisions Landfill tax. 39 1 A tax, to be known as landfill tax, shall be charged in accordance with this Part. 2 The tax shall be under the care and management of the Commissioners of Customs and Excise. Charge to tax. 40 1 Tax shall be charged on a taxable disposal made in England ... or Northern Ireland . 2 A taxable disposal takes place where material is disposed of and either— a the disposal is made at a landfill site (see subsection (4)), or b the disposal requires a permit or licence mentioned in subsection (4) but is not made at a landfill site. 3 For this purpose a disposal is made at a landfill site if the land on or under which it is made constitutes or falls within land which is a landfill site at the time of the disposal. 4 Land is a landfill site at a given time if at that time— a a permit under regulations made under— i section 2 of the Pollution Prevention and Control Act 1999, or ii Article 4 of the Environment (Northern Ireland) Order 2002 ( S.I. 2002/3153 (N.I. 7)), is in force in relation to the land and authorises deposits or disposals in or on the land, b a waste management licence issued under Part 2 of the Waste and Contaminated Land (Northern Ireland) Order 1997 ( S.I. 1997/2778 (N.I. 19)) (waste on land) is in force in relation to the land and authorises deposits in or on the land, or c a licence under any provision for the time being having effect in Northern Ireland and corresponding to section 35 of the Environmental Protection Act 1990 (waste management licences) is in force in relation to the land and authorises disposals in or on the land. Disposals of material 40A 1 For the purposes of this Part, there is a disposal of material if— a material is disposed of on the surface of land or on a structure set into the surface, or b material is disposed of under the surface of land. 2 For the purposes of subsection (1)(a) and (b) it does not matter whether the material is placed in a container before it is disposed of. 3 For the purposes of subsection (1)(b) it does not matter whether the material— a is covered after it is disposed of, or b is disposed of in a cavity (such as a cavern or mine). 4 If material is disposed of on the surface of land or on a structure set into the surface with a view to the material being covered, the disposal is to be treated as made when the material is disposed of and not when it is covered. 5 An order may for the purposes of this Part provide for— a material to be treated as disposed of in circumstances where it would not otherwise be so treated; b material to be treated as not disposed of in circumstances where it would otherwise be so treated. 6 An order under subsection (5) may, among other things, make provision by reference to— a descriptions of material; b the quantities disposed of; c the nature of the site at which material is disposed of; d the location of material in a site (for example, whether it is in a discrete unit within the site). 7 An order may for the purposes of this Part provide for a prohibited disposal to be treated as a disposal falling within paragraph (b) of section 40(2). “Prohibited disposal” here means a disposal of material the disposal of which at a landfill site is prohibited by or by virtue of a prescribed enactment. 8 An order under this section may make provision subject to exceptions, conditions or other qualifications. Liability to pay tax. 41 1 The person liable to pay tax charged on a taxable disposal made at a landfill site is the landfill site operator. 2 The reference here to the landfill site operator is to the person who is at the time of the disposal the operator of the landfill site which constitutes or contains the land on or under which the disposal is made. 3 A person is liable to pay tax charged on a taxable disposal not made at a landfill site if the person— a makes the disposal, or b knowingly causes or knowingly permits the disposal to be made. 4 Every such person is jointly and severally liable to pay the tax charged. 5 In the case of a taxable disposal not made at a landfill site, a person within subsection (6) or (7) is taken for the purposes of this Part to be a person who knowingly causes or knowingly permits the disposal to be made, unless it is shown to the satisfaction of the Commissioners that the person did not do so. 6 A person is within this subsection if, before the time of the disposal of the material in question, the person— a took any action with a view to the disposal of the material, b was party to a contract for the sale of the material, or c facilitated the transport or storage of the material. 7 A person is within this subsection if at the time of the disposal the person— a is the owner, or a lessee or occupier, of the land at which the disposal is made, b controls, or is able to control, a vehicle or trailer from which the disposal is made, or c is an officer of a body corporate or unincorporated association that is within subsection (3)(a) or (3)(b). 8 In subsection (7)(c) “officer”— a in relation to a body corporate, means a director, manager, secretary, chief executive or member of the committee of management, or a person purporting to act in such a capacity; b in relation to an unincorporated association, means an officer of the association or a member of its governing body, or a person purporting to act in such a capacity. Amount of tax. 42 1 The amount of tax charged on a taxable disposal shall be found by taking— a £126.15 for each whole tonne disposed of and a proportionately reduced sum for any additional part of a tonne, or b a proportionately reduced sum if less than a tonne is disposed of. 2 Where— a the material disposed of consists entirely of qualifying material or qualifying fines, and b the disposal is made at a landfill site, this section applies as if the reference to £126.15 were to £4.05 . 3 Qualifying material is material for the time being listed for the purposes of this section in an order. 3A Qualifying fines are a mixture of— a fines that consist of such qualifying material as is prescribed by order, and b fines that consist of material that is not qualifying material, that satisfies all the requirements prescribed in an order. 3B An order under subsection (3A) relating to the mixture of fines may require, in particular— a that fines that consist of material that is not qualifying material do not exceed a prescribed proportion; b that the mixture of fines does not include prescribed materials or prescribed descriptions of materials; c that the mixture of fines is such that, if subjected to a prescribed test, it would give a prescribed result; d that the mixture of fines originates, or does not originate, in a prescribed way. 4 The Treasury must— a set criteria to be considered in determining from time to time what material is to be listed or what fines are to be qualifying fines , b keep those criteria under review, and c revise them whenever they consider they should be revised. 5 The Commissioners must publish the criteria (and any revised criteria) set by the Treasury. 6 In determining from time to time what material is to be listed, or what fines are to be qualifying fines, the Treasury must have regard to— a the criteria (or revised criteria) published under subsection (5), and b any other factors they consider relevant. Exemptions Material removed from water. 43 1 A disposal made at a landfill site is not a taxable disposal for the purposes of this Part if it is shown to the satisfaction of the Commissioners that the disposal is of material all of which— a has been removed (by dredging or otherwise) from water falling within subsection (2) below, and b formed part of or projected from the bed of the water concerned before its removal. 2 Water falls within this subsection if it is— a a river, canal or watercourse (whether natural or artificial), or b a dock or harbour (whether natural or artificial). 3 A disposal made at a landfill site is not a taxable disposal for the purposes of this Part if it is shown to the satisfaction of the Commissioners that the disposal is of material all of which— a has been removed (by dredging or otherwise) from water falling within the approaches to a harbour (whether natural or artificial), b has been removed in the interests of navigation, and c formed part of or projected from the bed of the water concerned before its removal. 4 A disposal made at a landfill site is not a taxable disposal for the purposes of this Part if it is shown to the satisfaction of the Commissioners that the disposal is of material all of which— a consists of naturally occurring mineral material, and b has been removed (by dredging or otherwise) from the sea in the course of commercial operations carried out to obtain substances such as sand or gravel from the seabed. 5 A disposal made at a landfill site is not a taxable disposal for the purposes of this Part if it is shown to the satisfaction of the Commissioners that the disposal is of material all of which comprises material falling within subsection (1) or (3) and other material which has been added to that material for the purpose of securing that it is not liquid waste. Contaminated land. 43A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Contaminated land: certificates. 43B 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Site restoration. 43C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mining and quarrying. 44 1 A disposal made at a landfill site is not a taxable disposal for the purposes of this Part if it is shown to the satisfaction of the Commissioners that the disposal is of material all of which fulfils each of the conditions set out in subsections (2) to (4) below. 2 The material must result from commercial mining operations (whether the mining is deep or open-cast) or from commercial quarrying operations. 3 The material must be naturally occurring material extracted from the earth in the course of the operations. 4 The material must not have been subjected to, or result from, a non-qualifying process carried out at any stage between the extraction and the disposal. 5 A non-qualifying process is— a a process separate from the mining or quarrying operations, or b a process forming part of those operations and permanently altering the material’s chemical composition. Quarries. 44A 1 A disposal is not a taxable disposal for the purposes of this Part if it is— a of material all of which is treated for the purposes of section 42 above as qualifying material, b made at a qualifying landfill site, and c made, or treated as made, on or after 1st October 1999. 2 A landfill site is a qualifying landfill site for the purposes of this section if at the time of the disposal— a the landfill site is or was a quarry, b subject to subsection (3) below, it is a requirement of planning consent in respect of the land in which the quarry or former quarry is situated that it be wholly or partially refilled, and c subject to subsection (4) below, the licence , permit or, as the case may require, resolution authorising disposals on or in the land comprising the site permits only the disposal of material which comprises qualifying material. 3 Where a quarry— a was in existence before 1st October 1999, and b quarrying operations ceased before that date, the requirement referred to in subsection (2)(b) must have been imposed on or before that date. 4 Where a licence or permit authorising disposals on or in the land does not (apart from the application of this subsection) meet the requirements of subsection (2)(c) above and an application has been made to vary the licence or permit in order to meet them, it shall be deemed to meet them for the period before— a the application is disposed of, or b the second anniversary of the making of the application if it occurs before the application is disposed of. 5 For the purposes of subsection (4) an application is disposed of if— a it is granted, b it is withdrawn, c it is refused and there is no right of appeal against the refusal, d a time limit for appeal against refusal expires without an appeal having been commenced, or e an appeal against refusal is dismissed or withdrawn and there is no further right of appeal. Pet cemeteries. 45 1 A disposal made at a landfill site is not a taxable disposal for the purposes of this Part if— a the disposal is of material consisting entirely of the remains of dead domestic pets, and b the landfill site at which the disposal is made fulfils the test set out in subsection (2) below. 2 The test is that during the relevant period— a no disposal of material was made at the site, or b the only disposals of material made at the site were of material consisting entirely of the remains of dead domestic pets. 3 For the purposes of subsection (2) above the relevant period— a begins with 1st October 1996 or (if later) with the coming into force in relation to the site of the licence , resolution or permit mentioned in section 66 below, and b ends immediately before the disposal mentioned in subsection (1) above. Power to vary. 46 1 Provision may be made by order to produce the result that— a a disposal which would otherwise be a taxable disposal (by virtue of this Part as it applies for the time being) is not a taxable disposal; b a disposal which would otherwise not be a taxable disposal (by virtue of this Part as it applies for the time being) is a taxable disposal. 2 Without prejudice to the generality of subsection (1) above, an order under this section may— za confer exemption by reference to guidance (as it has effect from time to time) issued by— i a body established by or under any enactment, or ii a government department or an agency of a government department, to the effect that particular kinds of disposal do not require a permit or licence mentioned in section 40(4); a confer exemption by reference to certificates issued by the Commissioners and to conditions set out in certificates; b allow the Commissioners to direct requirements to be met before certificates can be issued; c provide for reviews and appeals relating to decisions about certificates. 3 Provision may be made under this section in such way as the Treasury think fit (whether by amending this Part or otherwise). Administration Registration. 47 1 The register kept under this section may contain such information as the Commissioners think is required for the purposes of the care and management of the tax. 2 A person who— a carries out taxable activities at a landfill site , and b is not registered, is liable to be registered. 3 Where— a a person at any time forms the intention of carrying out taxable activities, and b he is not registered, he shall notify the Commissioners of his intention. 3A A registered person who forms the intention of carrying out taxable activities elsewhere than at a landfill site shall notify the Commissioners of that intention. 4 A person who at any time ceases to have the intention of carrying out taxable activities at a landfill site shall notify the Commissioners of that fact. 5 Where a person is liable to be registered by virtue of subsection (2) above the Commissioners shall register him with effect from the time when he begins to carry out taxable activities; and this subsection applies whether or not he notifies the Commissioners under subsection (3) above. 5A Where a person who is not registered carries out taxable activities elsewhere than at a landfill site, the Commissioners may register the person with effect from the date when the person begins carrying out those activities. 5B Subsections (2) to (5A) do not apply to a person within subsection (6) of section 41 who, but for that subsection, would not be treated as carrying out taxable activities. 6 Where the Commissioners are satisfied that a registered person has ceased to carry out taxable activities at a landfill site they may cancel his registration with effect from the earliest practicable time after he so ceased; and this subsection applies whether or not he notifies the Commissioners under subsection (4) above. 7 Where— a a person notifies the Commissioners under subsection (4) above, b they are satisfied that he will not carry out taxable activities, c they are satisfied that no tax which he is liable to pay is unpaid, d they are satisfied that no credit to which he is entitled under regulations made under section 51 below is outstanding, and e subsection (8) below does not apply, the Commissioners shall cancel his registration with effect from the earliest practicable time after he ceases to carry out taxable activities. 8 Where— a a person notifies the Commissioners under subsection (4) above, and b they are satisfied that he has not carried out, and will not carry out, taxable activities, the Commissioners shall cancel his registration with effect from the time when he ceased to have the intention to carry out taxable activities. 9 For the purposes of this section regulations may make— a provision as to the time within which a notification is to be made (including provision enabling the Commissioners to grant an extension of time); b provision as to the form and manner in which any notification is to be made and as to the information to be contained in or provided with it; c provision as to the criteria that the Commissioners are to apply in deciding whether to register a person under subsection (5A); d provision under which, in prescribed circumstances, taxable activities at a site within subsection (9B) may, on a provisional or conditional basis, be treated as carried out at a landfill site; e provision requiring a person who has made a notification to notify the Commissioners if any information contained in or provided in connection with it is or becomes inaccurate; f provision as to the correction of entries in the register (including provision for a person provisionally or conditionally registered by virtue of paragraph (d) to be treated, in prescribed circumstances, as never having been so registered). 9A Provision made by regulations under subsection (9)(c) may be supplemented by provision made by notice published by the Commissioners in accordance with the regulations. 9B A site is within this subsection if— a it is not a landfill site, or b it not known at the relevant time whether it is a landfill site or not. 10 In this Part— “ registered person ” means— a person registered under subsection (5) or (5A), and a person who was registered under this section before the passing of FA 2018 and who remains registered; “ registrable person ” means a person who carries out taxable activities (whether registered or not), excluding a person within subsection (6) of section 41 who, but for that subsection, would not be treated as carrying out taxable activities. Information required to keep register up to date. 48 1 Regulations may make provision requiring a registrable person to notify the Commissioners of particulars which— a are of changes in circumstances relating to the registrable person or any business carried on by him, b appear to the Commissioners to be required for the purpose of keeping the register kept under section 47 above up to date, and c are of a prescribed description. 2 Regulations may make provision— a as to the time within which a notification is to be made; b as to the form and manner in which a notification is to be made; c requiring a person who has made a notification to notify the Commissioners if any information contained in it is inaccurate. Accounting for tax and time for payment. 49 Regulations may provide that a registered person shall— a account for tax by reference to such periods (accounting periods) as may be determined by or under the regulations; b make, in relation to accounting periods, returns in such form ... and at such times as may be so determined; c pay tax at such times and in such manner as may be so determined. Power to assess: registered persons . 50 1 Where— a a registered person has failed to make any returns required to be made under this Part, b a registered person has failed to keep any documents necessary to verify returns required to be made under this Part, c a registered person has failed to afford the facilities necessary to verify returns required to be made under this Part, or d it appears to the Commissioners that returns required to be made by a registered person under this Part are incomplete or incorrect, the Commissioners may assess the amount of tax due from the person concerned to the best of their judgment and notify it to him. 2 Where a registered person has for an accounting period been paid an amount to which he purports to be entitled under regulations made under section 51 below, then, to the extent that the amount ought not to have been paid or would not have been paid had the facts been known or been as they later turn out to be, the Commissioners may assess the amount as being tax due from him for that period and notify it to him accordingly. 3 Where a person is assessed under subsections (1) and (2) above in respect of the same accounting period the assessments may be combined and notified to him as one assessment. 4 Where the person failing to make a return, or making a return which appears to the Commissioners to be incomplete or incorrect, was required to make the return as a personal representative, trustee in bankruptcy, receiver, liquidator or person otherwise acting in a representative capacity in relation to another person, subsection (1) above shall apply as if the reference to tax due from him included a reference to tax due from that other person. 5 An assessment under subsection (1) or (2) above of an amount of tax due for an accounting period shall not be made after the later of the following— a two years after the end of the accounting period; b one year after evidence of facts, sufficient in the Commissioners’ opinion to justify the making of the assessment, comes to their knowledge; but where further such evidence comes to their knowledge after the making of an assessment under subsection (1) or (2) above another assessment may be made under the subsection concerned in addition to any earlier assessment. 6 Where— a as a result of a person’s failure to make a return in relation to an accounting period the Commissioners have made an assessment under subsection (1) above for that period, b the tax assessed has been paid but no proper return has been made in relation to the period to which the assessment related, and c as a result of a failure to make a return in relation to a later accounting period, being a failure by the person referred to in paragraph (a) above or a person acting in a representative capacity in relation to him, as mentioned in subsection (4) above, the Commissioners find it necessary to make another assessment under subsection (1) above, then, if the Commissioners think fit, having regard to the failure referred to in paragraph (a) above, they may specify in the assessment referred to in paragraph (c) above an amount of tax greater than that which they would otherwise have considered to be appropriate. 7 Where an amount has been assessed and notified to any person under subsection (1) or (2) above it shall be deemed to be an amount of tax due from him and may be recovered accordingly unless, or except to the extent that, the assessment has subsequently been withdrawn or reduced. 8 For the purposes of this section notification to— a a personal representative, trustee in bankruptcy, receiver or liquidator, or b a person otherwise acting in a representative capacity in relation to another person, shall be treated as notification to the person in relation to whom the person mentioned in paragraph (a) above, or the first person mentioned in paragraph (b) above, acts. 9 Subsection (5) above has effect subject to paragraph 33 of Schedule 5 to this Act. 10 In this section “ trustee in bankruptcy ” means, as respects Scotland, a trustee or interim trustee in the sequestration, under the Bankruptcy (Scotland) Act 2016, of a person’s estate or a trustee acting under a trust deed (within the meaning of that Act). Power to assess: unregistered persons 50A 1 Where— a it appears to the Commissioners that a person is liable to pay tax on a taxable disposal, and b the person is not a registered person, the Commissioners may assess the amount of tax due from the person to the best of their judgment and notify it to the person. 2 An assessment under this section must be accompanied by a notice— a identifying the land where the disposal was made; b indicating the date on which the disposal was made or treated as made, or the date on which (or period within which) the Commissioners believe it was made; c explaining why the Commissioners believe that the person to whom the notification is sent is liable to pay tax on the disposal; d describing the methods used to calculate the amount of tax, including the method used by the Commissioners to determine the weight of the material disposed of; e containing any other information prescribed by regulations. 3 An assessment under this section is not invalidated by any inaccuracy in the information given in the notice under subsection (2). 4 An assessment under this section— a may relate to more than one taxable disposal; b may relate to an unascertained number of taxable disposals; c may relate to taxable disposals at more than one location. 5 An assessment under this section shall not be made more than two years after evidence of facts, sufficient in the Commissioners' opinion to justify the making of the assessment, comes to their knowledge. But where further such evidence comes to their knowledge after the making of an assessment under this section another assessment may be made under this section in addition to any earlier assessment. 6 Where an amount has been assessed and notified to a person under this section it shall be deemed to be an amount of tax due from the person and may be recovered accordingly unless, or except to the extent that, the assessment has subsequently been withdrawn or reduced. Credit Credit: general. 51 1 Regulations may provide that where— a a person has paid or is liable to pay tax in respect of the disposal of material at a landfill site , and b prescribed conditions are fulfilled, the person shall be entitled to credit of such an amount as is found in accordance with prescribed rules. 2 Regulations may make provision as to the manner in which a person is to benefit from credit, and in particular may make provision— a that a person shall be entitled to credit by reference to accounting periods; b that a person shall be entitled to deduct an amount equal to his total credit for an accounting period from the total amount of tax due from him for the period; c that if no tax is due from a person for an accounting period but he is entitled to credit for the period, the amount of the credit shall be paid to him by the Commissioners; d that if the amount of credit to which a person is entitled for an accounting period exceeds the amount of tax due from him for the period, an amount equal to the excess shall be paid to him by the Commissioners; e for the whole or part of any credit to be held over to be credited for a subsequent accounting period; f as to the manner in which a person who has ceased to be registrable is to benefit from credit. 3 Regulations under subsection (2)(c) or (d) above may provide that where at the end of an accounting period an amount is due to a person who has failed to submit returns for an earlier period as required by this Part, the Commissioners may withhold payment of the amount until he has complied with that requirement. 4 Regulations under subsection (2)(e) above may provide for credit to be held over either on the person’s application or in accordance with directions given by the Commissioners from time to time; and the regulations may allow directions to be given generally or with regard to particular cases. 5 Regulations may provide that— a no benefit shall be conferred in respect of credit except on a claim made in such manner and at such time as may be determined by or under regulations; b payment in respect of credit shall be made subject to such conditions (if any) as the Commissioners think fit to impose, including conditions as to repayment in specified circumstances; c deduction in respect of credit shall be made subject to such conditions (if any) as the Commissioners think fit to impose, including conditions as to the payment to the Commissioners, in specified circumstances, of an amount representing the whole or part of the amount deducted. 6 Regulations may require a claim by a person to be made in a return required by provision made under section 49 above. 7 Nothing in section 52 or 53 below shall be taken to derogate from the power to make regulations under this section (whether with regard to bad debts, the environment or any other matter). Bad debts. 52 1 Regulations may be made under section 51 above with a view to securing that a person is entitled to credit if— a he carries out a taxable activity at a landfill site as a result of which he becomes entitled to a debt which turns out to be bad (in whole or in part), and b such other conditions as may be prescribed are fulfilled. 2 The regulations may include provision under section 51(5)(b) or (c) above requiring repayment or payment if it turns out that it was not justified to regard a debt as bad (or to regard it as bad to the extent that it was so regarded). 3 The regulations may include provision for determining whether, and to what extent, a debt is to be taken to be bad. Bodies concerned with the environment. 53 1 Regulations may be made under section 51 above with a view to securing that a person is entitled to credit if— a he pays a sum to a body whose objects are or include the protection of the environment, and b such other conditions as may be prescribed are fulfilled. 2 The regulations may in particular prescribe conditions— a requiring bodies to which sums are paid (environmental bodies) to be approved by another body (the regulatory body); b requiring the regulatory body to be approved by the Commissioners; c requiring sums to be paid with the intention that they be expended on such matters connected with the protection of the environment as may be prescribed. 3 The regulations may include provision under section 51(5)(b) or (c) above requiring repayment or payment if— a a sum is not in fact expended on matters prescribed under subsection (2)(c) above, or b a prescribed condition turns out not to have been fulfilled. 4 The regulations may include— a provision for determining the amount of credit (including provision for limiting it); b provision that matters connected with the protection of the environment include such matters as overheads (including administration) of environmental bodies and the regulatory body; c provision as to the matters by reference to which an environmental body or the regulatory body can be, and remain, approved (including matters relating to the functions and activities of any such body); ca provision for an environmental body to be and remain approved only if it complies with conditions imposed from time to time by the regulatory body or for the regulatory body to be and remain approved only if it complies with conditions imposed from time to time by the Commissioners (including provision for the variation or revocation of such conditions); d provision allowing the withdrawal of approval of an environmental body by the Commissioners or by the regulatory body, and the withdrawal of approval of the regulatory body by the Commissioners, (whether prospectively or retrospectively); e provision that, if approval of the regulatory body is withdrawn, another body may be approved in its place or its functions may be performed by the Commissioners; f provision allowing the Commissioners to disclose to the regulatory body information which relates to the tax affairs of persons carrying out taxable activities and which is relevant to the credit scheme established by the regulations. Review and appeal Appeals 54 1 Subject to section 55, an appeal shall lie to an appeal tribunal from any person who is or will be affected by any of the following decisions— a a decision as to the registration or cancellation of registration of any person under this Part; b a decision as to whether tax is chargeable in respect of a disposal or as to how much tax is chargeable; ba . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . bb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c a decision as to whether a person is entitled to credit by virtue of regulations under section 51 above or as to how much credit a person is entitled to or as to the manner in which he is to benefit from credit; ca a decision to withdraw approval of an environmental body under any provision contained in regulations by virtue of section 53(4)(d) above; d a decision as to an assessment falling within subsection (2) below or as to the amount of such an assessment; e a decision to refuse a request under section 58(3) below; f a decision to refuse an application under section 59 below; g a decision as to whether conditions set out in a specification under the authority of provision made under section 68(4)(b) below are met in relation to a disposal; h a decision to give a direction under any provision contained in regulations by virtue of section 68(5) below; i a decision as to a claim for the repayment of an amount under paragraph 14 of Schedule 5 to this Act; j a decision as to liability to a penalty under Part V of that Schedule or as to the amount of such a penalty; k a decision under paragraph 19 of that Schedule (as mentioned in paragraph 19(5)); l a decision as to any liability to pay interest under paragraph 26 or 27 of that Schedule or as to the amount of the interest payable; m a decision as to any liability to pay interest under paragraph 29 of that Schedule or as to the amount of the interest payable; n a decision to require any security under paragraph 31 of that Schedule or as to its amount; o a decision as to the amount of any penalty or interest specified in an assessment under paragraph 32 of that Schedule. 2 An assessment falls within this subsection if it is— a an assessment under section 50 above in respect of an accounting period in relation to which a return required to be made by virtue of regulations under section 49 above has been made , or b an assessment under section 50A. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Offer of review 54A 1 HMRC must offer a person (P) a review of a decision that has been notified to P if an appeal lies under section 54 in respect of the decision. 2 The offer of the review must be made by notice given to P at the same time as the decision is notified to P. 3 This section does not apply to the notification of the conclusions of a review. Right to require review 54B 1 Any person (other than P) who has the right of appeal under section 54 against a decision may require HMRC to review that decision if that person has not appealed to the appeal tribunal under section 54G. 2 A notification that such a person requires a review must be made within 30 days of that person becoming aware of the decision. Review by HMRC 54C 1 HMRC must review a decision if— a they have offered a review of the decision under section 54A, and b P notifies HMRC accepting the offer within 30 days from the date of the document containing the notification of the offer. 2 But P may not notify acceptance of the offer if P has already appealed to the appeal tribunal under section 54G. 3 HMRC must review a decision if a person other than P notifies them under section 54B. 4 HMRC shall not be required to review a decision if P, or another person, has appealed to the appeal tribunal under section 54G in respect of the decision. Extensions of time 54D 1 If under section 54A, HMRC have offered P a review of a decision, HMRC may within the relevant period notify P that the relevant period is extended. 2 If under section 54B another person may require HMRC to review a matter, HMRC may within the relevant period notify the other person that the relevant period is extended. 3 If notice is given the relevant period is extended to the end of 30 days from— a the date of the notice, or b any other date set out in the notice or a further notice. 4 In this section “relevant period” means— a the period of 30 days referred to in— i section 54C(1)(b) (in a case falling within subsection (1)), or ii section 54B(2) (in a case falling within subsection (2)), or b if notice has been given under subsection (1) or (2), that period as extended (or as most recently extended) in accordance with subsection (3). Review out of time 54E 1 This section applies if— a HMRC have offered a review of a decision under section 54A and P does not accept the offer within the time allowed under section 54C(1)(b) or 54D(3); or b a person who requires a review under section 54B does not notify HMRC within the time allowed under that section or section 54D(3). 2 HMRC must review the decision under section 54C if— a after the time allowed, P, or the other person, notifies HMRC in writing requesting a review out of time, b HMRC are satisfied that P, or the other person, had a reasonable excuse for not accepting the offer or requiring review within the time allowed, and c HMRC are satisfied that P, or the other person, made the request without unreasonable delay after the excuse had ceased to apply. 3 HMRC shall not be required to review a decision if P, or another person, has appealed to the appeal tribunal under section 54G in respect of the decision. Nature of review etc 54F 1 This section applies if HMRC are required to undertake a review under section 54C or 54E. 2 The nature and extent of the review are to be such as appear appropriate to HMRC in the circumstances. 3 For the purpose of subsection (2), HMRC must, in particular, have regard to steps taken before the beginning of the review— a by HMRC in reaching the decision, and b by any person in seeking to resolve disagreement about the decision. 4 The review must take account of any representations made by P, or the other person, at a stage which gives HMRC a reasonable opportunity to consider them. 5 The review may conclude that the decision is to be— a upheld, b varied, or c cancelled. 6 HMRC must give P, or the other person, notice of the conclusions of the review and their reasoning within— a a period of 45 days beginning with the relevant date, or b such other period as HMRC and P, or the other person, may agree. 7 In subsection (6) “relevant date” means— a the date HMRC received P’s notification accepting the offer of a review (in a case falling within section 54A), or b the date HMRC received notification from another person requiring review (in a case falling within section 54B), or c the date on which HMRC decided to undertake the review (in a case falling within section 54E). 8 Where HMRC are required to undertake a review but do not give notice of the conclusions within the time period specified in subsection (6), the conclusion of the review is deemed to be that the decision is upheld. 9 HMRC must notify P, or the other person of any conclusion under subsection (8). Bringing of appeals 54G 1 An appeal under section 54 is to be made to the appeal tribunal before— a the end of the period of 30 days beginning with— i in a case where P is the appellant, the date of the document notifying the decision to which the appeal relates, or ii in a case where a person other than P is the appellant, the date that person becomes aware of the decision, or b if later, the end of the relevant period (within the meaning of section 54D). 2 But that is subject to subsections (3) to (5). 3 In a case where HMRC are required to undertake a review under section 54C— a an appeal may not be made until the conclusion date, and b any appeal is to be made within the period of 30 days beginning with the conclusion date. 4 In a case where HMRC are requested to undertake a review by virtue of section 54E — a an appeal may not be made to an appeal tribunal— i unless HMRC have notified P, or the other person, that a review will be undertaken, and ii if HMRC have notified P, or the other person, that a review will be undertaken, until the conclusion date; b any appeal where paragraph (a)(ii) applies is to be made within the period of 30 days beginning with the conclusion date; c if HMRC have notified P, or the other person, that a review will not be undertaken, an appeal may be made only if the appeal tribunal gives permission to do so. 5 In a case where section 54F(8) applies, an appeal may be made at any time from the end of the period specified in section 54F(6) to the date 30 days after the conclusion date. 6 An appeal may be made after the end of the period specified in subsection (1), (3)(b), (4)(b) or (5) if the appeal tribunal gives permission to do so. 7 In this section “conclusion date” means the date of the document notifying the conclusions of the review. Appeals: further provisions 55 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Subject to subsections (3A) and (3B), where an appeal under section 54 relates to a decision falling within section 54(1)(b) or (d), it shall not be entertained unless the amount which HMRC have determined to be payable as tax has been paid or deposited with them. 3A In a case where the amount determined to be payable as tax has not been paid or deposited an appeal may be entertained if— a HMRC are satisfied (on the application of the appellant), or b the appeal tribunal decides (HMRC not being so satisfied and on the application of the appellant), that the requirement to pay or deposit the amount determined would cause the appellant to suffer hardship. 3B Notwithstanding the provisions of sections 11 and 13 of the Tribunals, Courts and Enforcement Act 2007, the decision of the tribunal as to the issue of hardship is final. 4 On an appeal under this section against an assessment to a penalty under paragraph 18 of Schedule 5 to this Act, the burden of proof as to the matters specified in paragraphs (a) and (b) of sub-paragraph (1) of paragraph 18 shall lie upon the Commissioners. Appeals: other provisions. 56 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Where on an appeal under section 54 — a it is found that the amount specified in the assessment is less than it ought to have been, and b the tribunal gives a direction specifying the correct amount, the assessment shall have effect as an assessment of the amount specified in the direction and that amount shall be deemed to have been notified to the appellant. 3 Where on an appeal under section 55 above it is found that the whole or part of any amount paid or deposited in pursuance of section 55(3) above is not due, so much of that amount as is found not to be due shall be repaid with interest at the rate applicable under section 197 of this Act . 4 Where on an appeal under section 55 above it is found that the whole or part of any amount due to the appellant by virtue of regulations under section 51(2)(c) or (d) or (f) above has not been paid, so much of that amount as is found not to have been paid shall be paid with interest at the rate applicable under section 197 of this Act . 5 Where an appeal under section 55 above has been entertained notwithstanding that an amount determined by the Commissioners to be payable as tax has not been paid or deposited and it is found on the appeal that that amount is due it shall be paid with interest at the rate applicable under section 197 of this Act . 5A Interest under subsection (5) shall be paid without any deduction of income tax. 6 Without prejudice to paragraph 25 of Schedule 5 to this Act, nothing in section 55 above shall be taken to confer on a tribunal any power to vary an amount assessed by way of penalty except in so far as it is necessary to reduce it to the amount which is appropriate under paragraphs 18 to 24 of that Schedule. 7 Without prejudice to paragraph 28 of Schedule 5 to this Act, nothing in section 55 above shall be taken to confer on a tribunal any power to vary an amount assessed by way of interest except in so far as it is necessary to reduce it to the amount which is appropriate under paragraph 26 or 27 of that Schedule. 8 Sections 85 and 85B of the Value Added Tax Act 1994 (settling of appeals by agreement and payment of tax where there is a further appeal) shall have effect as if— a the references to section 83 of that Act included references to section 54 of this Act, and b the references to value added tax included references to landfill tax. Review and appeal: commencement. 57 Sections 54 to 56 above shall come into force on— a 1st October 1996, or b such earlier day as may be appointed by order. Miscellaneous Partnership, bankruptcy, transfer of business, etc. 58 1 As regards any case where a business is carried on in partnership or by another unincorporated body, regulations may make provision for determining by what persons anything required by this Part to be done by a person is to be done. 2 The registration under this Part of an unincorporated body other than a partnership may be in the name of the body concerned; and in determining whether taxable activities are carried out by such a body no account shall be taken of any change in its members. 3 The registration under this Part of a body corporate carrying on a business in several divisions may, if the body corporate so requests and the Commissioners see fit, be in the names of those divisions. 4 As regards any case where a person carries on a business of a person who has died or become bankrupt or incapacitated or whose estate has been sequestrated, or of a person which is in liquidation or receivership or administration , regulations may— a require the first-mentioned person to inform the Commissioners of the fact that he is carrying on the business and of the event that has led to his carrying it on; b make provision allowing the person to be treated for a limited time as if he were the other person; c make provision for securing continuity in the application of this Part where a person is so treated. 5 Regulations may make provision for securing continuity in the application of this Part in cases where a business carried on by a person is transferred to another person as a going concern. 6 Regulations under subsection (5) above may in particular— a require the transferor to inform the Commissioners of the transfer; b provide for liabilities and duties under this Part of the transferor to become, to such extent as may be provided by the regulations, liabilities and duties of the transferee; c provide for any right of either of them to repayment or credit in respect of tax to be satisfied by making a repayment or allowing a credit to the other; but the regulations may provide that no such provision as is mentioned in paragraph (b) or (c) of this subsection shall have effect in relation to any transferor and transferee unless an application in that behalf has been made by them under the regulations. Groups of companies. 59 1 Where under the following provisions of this section any bodies corporate are treated as members of a group, for the purposes of this Part— a any liability of a member of the group to pay tax shall be taken to be a liability of the representative member; b the representative member shall be taken to carry out any taxable activities which a member of the group would carry out (apart from this section) by virtue of section 69 below; c all members of the group shall be jointly and severally liable for any tax due from the representative member. 2 Two or more bodies corporate are eligible to be treated as members of a group if the conditions mentioned in subsection (3) below are fulfilled and— a one of them controls each of the others, b one person (whether a body corporate or an individual) controls all of them, or c two or more individuals carrying on a business in partnership control all of them. 3 The conditions are that— a each of the bodies corporate is a registered person, and b the prospective representative member has an established place of business in the United Kingdom. 4 Where an application to that effect is made to the Commissioners with respect to two or more bodies corporate eligible to be treated as members of a group, then— a from the beginning of an accounting period they shall be so treated, and b one of them shall be the representative member, unless the Commissioners refuse the application; and the Commissioners shall not refuse the application unless it appears to them necessary to do so for the protection of the revenue. 5 Where any bodies corporate are treated as members of a group and an application to that effect is made to the Commissioners, then, from the beginning of an accounting period— a a further body eligible to be so treated shall be included among the bodies so treated, b a body corporate shall be excluded from the bodies so treated, c another member of the group shall be substituted as the representative member, or d the bodies corporate shall no longer be treated as members of a group, unless the application is to the effect mentioned in paragraph (a) or (c) above and the Commissioners refuse the application. 6 The Commissioners may refuse an application under subsection (5)(a) or (c) above only if it appears to them necessary to do so for the protection of the revenue. 7 Where a body corporate is treated as a member of a group as being controlled by any person and it appears to the Commissioners that it has ceased to be so controlled, they shall, by notice given to that person, terminate that treatment from such date as may be specified in the notice. 8 An application under this section with respect to any bodies corporate must be made by one of those bodies or by the person controlling them and must be made not less than 90 days before the date from which it is to take effect, or at such later time as the Commissioners may allow. 9 For the purposes of this section a body corporate shall be taken to control another body corporate if it is empowered by statute to control that body’s activities or if it is that body’s holding company within the meaning of section 1159 of and Schedule 6 to the Companies Act 1985; and an individual or individuals shall be taken to control a body corporate if he or they, were he or they a company, would be that body’s holding company within the meaning of those provisions . Information, powers, penalties, secondary liability, etc. 60 Schedule 5 to this Act (which contains provisions relating to information, powers, penalties , secondary liability and other matters) shall have effect. Taxable disposals: special provisions. 61 1 Where— a a taxable disposal is in fact made on a particular day, b within the period of 14 days beginning with that day the person liable to pay tax in respect of the disposal issues a landfill invoice in respect of the disposal, and c he has not notified the Commissioners in writing that he elects not to avail himself of this subsection, for the purposes of this Part the disposal shall be treated as made at the time the invoice is issued. 2 The reference in subsection (1) above to a landfill invoice is to a document containing such particulars as regulations may prescribe for the purposes of that subsection. 3 The Commissioners may at the request of a person direct that subsection (1) above shall apply— a in relation to disposals in respect of which he is liable to pay tax, or b in relation to such of them as may be specified in the direction, as if for the period of 14 days there were substituted such longer period as may be specified in the direction. Taxable disposals: regulations. 62 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Qualifying material: special provisions. 63 1 This section applies for the purposes of section 42 above. 2 The Commissioners may direct that where material is disposed of it must be treated as qualifying material if it would in fact be such material but for a small quantity of non-qualifying material; and whether a quantity of non-qualifying material is small must be determined in accordance with the terms of the direction. 3 The Commissioners may at the request of a person direct that where there is a disposal in respect of which he is liable to pay tax the material disposed of must be treated as qualifying material if it would in fact be such material but for a small quantity of non-qualifying material, and— a a direction may apply to all disposals in respect of which a person is liable to pay tax or to such of them as are identified in the direction; b whether a quantity of non-qualifying material is small must be determined in accordance with the terms of the direction. 4 If a direction under subsection (3) above applies to a disposal any direction under subsection (2) above shall not apply to it. 4A Subsections (2) to (4) do not apply where the material disposed of consists of qualifying fines. 5 An order may provide that material must not be treated as qualifying material unless prescribed conditions are met. 6 A condition may relate to any matter the Treasury think fit (such as the production of a document which includes a statement of the nature of the material). Qualifying fines: special provisions 63A 1 This section applies for the purposes of section 42. 2 An order may provide that fines must not be treated as qualifying fines unless prescribed conditions are met. 3 A condition may relate to any matter the Treasury think fit. 4 The conditions may include conditions making provision about— a the production of a document which includes a statement of the nature of the fines; b carrying out a specified test on fines proposed to be disposed of as qualifying fines; c the frequency with which tests are to be carried out on any fines proposed to be disposed of as qualifying fines; d the frequency with which tests are to be carried out on any fines that come from a particular source and are proposed to be disposed of as qualifying fines; e the steps to be taken by operators of landfill sites in relation to persons sending fines to be disposed of as qualifying fines. 5 The conditions may enable provision to be made by notices issued by the Commissioners in accordance with such provision as is made in the conditions. 6 A notice issued as described in subsection (5) may be revoked by a notice issued in the same way. 7 If an order includes provision falling within subsection (4)(b), the Commissioners may direct a person to carry out such a test in relation to any fines proposed to be disposed of as qualifying fines. 8 In this section “ specified ” means specified in— a a condition prescribed under subsection (2), or b a notice issued as described in subsection (5). Interpretation Disposal of material as waste. 64 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disposal by way of landfill. 65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prescribed landfill site activities to be treated as disposals 65A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Landfill sites. 66 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Operators of landfill sites. 67 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Weight of material disposed of. 68 1 The weight of the material disposed of on a taxable disposal shall be determined in accordance with regulations. 2 The regulations may— a prescribe rules for determining the weight; b authorise rules for determining the weight to be specified by the Commissioners in a prescribed manner; c authorise rules for determining the weight to be agreed by the person liable to pay the tax and an authorised person. 3 The regulations may in particular prescribe, or authorise the specification or agreement of, rules about— a the method by which the weight is to be determined; b the time by reference to which the weight is to be determined; c the discounting of constituents (such as water). 4 The regulations may include provision that a specification authorised under subsection (2)(b) above may provide— a that it is to have effect only in relation to disposals of such descriptions as may be set out in the specification; b that it is not to have effect in relation to particular disposals unless the Commissioners are satisfied that such conditions as may be set out in the specification are met in relation to the disposals; and the conditions may be framed by reference to such factors as the Commissioners think fit (such as the consent of an authorised person to the specification having effect in relation to disposals). 5 The regulations may include provision that— a where rules are agreed as mentioned in subsection (2)(c) above, and b the Commissioners believe that they should no longer be applied because they do not give an accurate indication of the weight or they are not being fully observed or for some other reason, the Commissioners may direct that the agreed rules shall no longer have effect. 6 The regulations shall be so framed that where in relation to a given disposal— a no specification of the Commissioners has effect, and b no agreed rules have effect, the weight shall be determined in accordance with rules prescribed in the regulations. Taxable activities. 69 1 A person carries out a taxable activity if the person— a makes a taxable disposal (whether or not at a landfill site), b permits a taxable disposal to be made at a landfill site, or c knowingly causes or knowingly permits a taxable disposal to be made elsewhere than at a landfill site, and the person is liable to pay tax in respect of the disposal. 2 Where— a a taxable disposal is made at a landfill site , and b it is made without the knowledge of the person who is liable to pay tax in respect of it, that person shall for the purposes of subsection (1)(b) be taken to permit the disposal. Interpretation: other provisions. 70 1 Unless the context otherwise requires— “accounting period” shall be construed in accordance with section 49 above; “ appeal tribunal ” means the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal; “ authorised person ” means any person acting under the authority of the Commissioners; “ the Commissioners ” means the Commissioners of Customs and Excise; “ conduct ” includes any act, omission or statement; “ disposal ” and “ dispose of ” shall be construed in accordance with section 40A; “the Environment Agency” means the body established by section 1 of the Environment Act 1995; “ fines ” means particles produced by a waste treatment process that involves an element of mechanical treatment; “HMRC” means Her Majesty’s Revenue and Customs; “ landfill site ” has the meaning given by section 40(4); “ material ” means material of all kinds, including objects, substances and products of all kinds; “ the Natural Resources Body for Wales ” means the body established by article 3 of the Natural Resources Body for Wales (Establishment) Order 2012 (S.I. 2012/1903); “ operator ”, in relation to a landfill site, means the person who at the relevant time is the holder of the permit (where section 40(4)(a) applies) or the licence (where section 40(4)(b) or (c) applies); “ prescribed ” means prescribed by an order or regulations under this Part; “ registered person” and “registrable person ” have the meaning given by section 47(10) above; ... “ tax ” means landfill tax; “ taxable disposal ” has the meaning given by section 40 above. “ taxable person ” means a person who is liable to pay tax on a taxable disposal. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 A reference to this Part includes a reference to any order or regulations made under it and a reference to a provision of this Part includes a reference to any order or regulations made under the provision, unless otherwise required by the context or any order or regulations. 4 This section and sections 68 and 69 above apply for the purposes of this Part. Supplementary Orders and regulations. 71 1 The power to make an order under section 57 above shall be exercisable by the Commissioners, and the power to make an order under any other provision of this Part shall be exercisable by the Treasury. 2 Any power to make regulations under this Part shall be exercisable by the Commissioners. 3 Any power to make an order or regulations under this Part shall be exercisable by statutory instrument. 4 An order to which this subsection applies shall be laid before the House of Commons; and unless it is approved by that House before the expiration of a period of 28 days beginning with the date on which it was made it shall cease to have effect on the expiration of that period, but without prejudice to anything previously done under the order or to the making of a new order. 5 In reckoning any such period as is mentioned in subsection (4) above no account shall be taken of any time during which Parliament is dissolved or prorogued or during which the House of Commons is adjourned for more than four days. 6 A statutory instrument containing an order or regulations under this Part (other than an order under section 57 above or an order to which subsection (4) above applies) shall be subject to annulment in pursuance of a resolution of the House of Commons. 7 Subsection (4) above applies to— za an order under section 40A which has the result that anything which would not otherwise be a taxable disposal is a taxable disposal; a an order under section 42(3) above providing for material which would otherwise be qualifying material not to be qualifying material; aa an order under section 42(3A) providing for fines which would otherwise be qualifying fines not to be qualifying fines; b an order under section 46 above which produces the result that a disposal which would otherwise not be a taxable disposal is a taxable disposal; c an order under section 63(5) above other than one which provides only that an earlier order under section 63(5) is not to apply to material; cza an order under section 63A(2) other than one which provides only that an earlier order under section 63A(2) is not to apply to fines; ca . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . cb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Any power to make an order or regulations under this Part— a may be exercised as regards prescribed cases or descriptions of case; b may be exercised differently in relation to different cases or descriptions of case. 9 An order or regulations under this Part may include such supplementary, incidental, consequential or transitional provisions as appear to the Treasury or the Commissioners (as the case may be) to be necessary or expedient. 10 No specific provision of this Part about an order or regulations shall prejudice the generality of subsections (8) and (9) above. Part IV Income Tax, Corporation Tax and Capital Gains Tax Chapter I Principal provisions Income tax charge, rates and reliefs Charge and rates of income tax for 1996-97. 72 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Application of lower rate to income from savings. 73 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Schedule 6 to this Act (which makes further amendments in connection with the charge at the lower rate on income from savings etc.) shall have effect. 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Personal allowances for 1996-97. 74 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Blind person’s allowance. 75 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Limit on relief for interest. 76 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Corporation tax charge and rate Charge and rate of corporation tax for 1996. 77 Corporation tax shall be charged for the financial year 1996 at the rate of 33 per cent. Small companies. 78 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Abolition of Schedule C charge etc. Abolition of Schedule C charge etc. 79 1 The charge to tax under Schedule C is abolished— a for the purposes of income tax, for the year 1996-97 and subsequent years of assessment; b for the purposes of corporation tax, for accounting periods ending after 31st March 1996. 2 Schedule 7 to this Act (which, together with Chapter II of this Part of this Act, makes provision for imposing a charge under Schedule D on descriptions of income previously charged under Schedule C, and makes connected amendments) shall have effect. Chapter II Loan relationships Introductory provisions Taxation of loan relationships. 80 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “loan relationship” etc. 81 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Taxation of profits and gains and relief for deficits Method of bringing amounts into account. 82 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-trading deficit on loan relationships. 83 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Computational provisions etc. Debits and credits brought into account. 84 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchange gains and losses from loan relationships 84A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Computation in accordance with generally accepted accounting practice 85A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amounts recognised in determining company’s profit or loss 85B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amounts not fully recognised for accounting purposes 85C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accounting method where parties have a connection. 87 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “control” in section 87 87A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exemption from section 87 in certain cases. 88 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accounting method where rate of interest is reset 88A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inconsistent application of accounting methods. 89 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Changes of accounting method. 90 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Change of accounting basis applicable to assets or liabilities 90A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payments subject to deduction of tax. 91 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Shares treated as loan relationships Shares subject to outstanding third party obligations 91A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-qualifying shares 91B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Condition 1 for section 91B(6)(b) 91C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Condition 2 for section 91B(6)(b) 91D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Condition 3 for section 91B(6)(b) 91E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Power to add, vary or remove Conditions for section 91B(6)(b) 91F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Shares beginning or ceasing to be subject to section 91A or 91B 91G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Partnerships Payments in return for capital contribution 91H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Change of partnership shares 91I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Special cases Convertible securities etc : creditor relationships 92 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Convertible securities etc: debtor relationships 92A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relationships linked to the value of chargeable assets. 93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relationships linked to the value of chargeable assets: guaranteed returns 93A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loan relationships ceasing to be within section 93 93B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Creditor relationships and benefit derived by connected persons 93C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Indexed gilt-edged securities. 94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loan relationships with embedded derivatives 94A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loan relationships treated differently by connected debtor and creditor 94B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gilt strips. 95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Special rules for certain other gilts. 96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Manufactured interest. 97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Collective investment schemes. 98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Insurance companies. 99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Miscellaneous other provisions Money debts etc not arising from the lending of money 100 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial instruments. 101 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Discounted securities: income tax provisions. 102 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplemental Interpretation of Chapter. 103 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Minor and consequential amendments. 104 Schedule 14 to this Act (which, for the purposes of both corporation tax and income tax, makes certain minor and consequential amendments in connection with the provisions of this Chapter) shall have effect. Commencement and transitional provisions. 105 1 Subject to Schedule 15 to this Act, this Chapter has effect— a for the purposes of corporation tax, in relation to accounting periods ending after 31st March 1996; and b so far as it makes provision for the purposes of income tax, in relation to the year 1996-97 and subsequent years of assessment. 2 Schedule 15 to this Act (which contains transitional provisions and savings in connection with the coming into force of this Chapter) shall have effect. Chapter III Provisions relating to the Schedule E charge Living accommodation provided for employees. 106 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Beneficial loans. 107 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Incidental benefits for holders of certain offices etc. 108 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charitable donations: payroll deduction schemes. 109 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PAYE settlement agreements. 110 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chapter IV Share Options, Profit Sharing and Employee Share Ownership Share options Amount or value of consideration for option. 111 1 Section 149A of the Taxation of Chargeable Gains Act 1992 (consideration for grant of option under approved share option schemes not to be deemed to be equal to market value of option) shall be amended as follows. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 In subsection (2) (grantor to be treated as if the amount or value of the consideration was its actual amount or value) for “The grantor of the option” there shall be substituted “ Both the grantor of the option and the person to whom the option is granted ” . 4 Subsection (4) (section not to affect treatment under that Act of person to whom option granted) shall cease to have effect. 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 This section has effect in relation to any right to acquire shares in a body corporate obtained on or after 28th November 1995 by an individual by reason of his office or employment as a director or employee of a body corporate. Release and replacement. 112 1 After section 237 of the Taxation of Chargeable Gains Act 1992 there shall be inserted— Share option schemes: release and replacement of options. 237A 1 This section applies in any case where a right to acquire shares in a body corporate (“the old right”) which was obtained by an individual by reason of his office or employment as a director or employee of that or any other body corporate is released in whole or in part for a consideration which consists of or includes the grant to that individual of another right (“the new right”) to acquire shares in that or any other body corporate. 2 As respects the person to whom the new right is granted— a without prejudice to subsection (1) above, the new right shall not be regarded for the purposes of capital gains tax as consideration for the release of the old right; b the amount or value of the consideration given by him or on his behalf for the acquisition of the new right shall be taken for the purposes of section 38(1) to be the amount or value of the consideration given by him or on his behalf for the old right; and c any consideration paid for the acquisition of the new right shall be taken to be expenditure falling within section 38(1)(b). 3 As respects the grantor of the new right, in determining for the purposes of this Act the amount or value of the consideration received for the new right, the release of the old right shall be disregarded. 2 Section 238(4) of that Act (which provides that the release of an option under an approved share option scheme in exchange for another option, in connection with a company take-over, is not to involve a disposal, and which is superseded by subsection (1) above) shall cease to have effect. 3 This section has effect in relation to transactions effected on or after 28th November 1995. Savings-related share option schemes Exercise of rights by employees of non-participating companies. 113 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other share option schemes Requirements to be satisfied by approved schemes. 114 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transitional provisions. 115 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Profit sharing schemes The release date. 116 1 In section 187(2) of the Taxes Act 1988 (interpretation of sections 185 and 186 of, and Schedules 9 and 10 to, that Act) in the definition of “release date” (the fifth anniversary of the date on which shares were appropriated to a participant in a profit sharing scheme) for “fifth” there shall be substituted “ third ” . 2 The amendment made by subsection (1) above shall have effect in relation to shares of a participant in a profit sharing scheme if the third anniversary of the appropriation of the shares to the participant occurs on or after the day on which this Act is passed. 3 If the third anniversary of the appropriation of any shares to a participant in a profit sharing scheme has occurred, but the fifth anniversary of their appropriation to him has not occurred, before the passing of this Act, then, in the application of sections 186 and 187 of, and Schedules 9 and 10 to, the Taxes Act 1988 in relation to those shares, the release date shall be the day on which this Act is passed. The appropriate percentage. 117 1 In Schedule 10 to the Taxes Act 1988 (further provisions relating to profit sharing schemes) for paragraph 3 (the appropriate percentage) there shall be substituted— 3 1 For the purposes of any of the relevant provisions charging an individual to income tax under Schedule E by reason of the occurrence of an event relating to any of his shares, the “appropriate percentage” in relation to those shares is 100 per cent., unless sub-paragraph (2) below applies. 2 Where the individual— a ceases to be a director or employee of the grantor or, in the case of a group scheme, a participating company as mentioned in paragraph 2(a) above, or b reaches the relevant age, before the event occurs, the “appropriate percentage” is 50 per cent., unless paragraph 6(4) below applies. 2 In section 187(8) of that Act (determination of certain values and percentages where shares are appropriated to a participant at different times) paragraph (b) (which relates to the appropriate percentage), and the word “and” immediately preceding it, shall cease to have effect. 3 Subsections (1) and (2) above have effect in relation to the occurrence, on or after the day on which this Act is passed, of events by reason of whose occurrence any provision of section 186 or 187 of, or Schedule 9 or 10 to, the Taxes Act 1988 charges an individual to income tax under Schedule E. The appropriate allowance. 118 1 In section 186(12) of the Taxes Act 1988 (determination of the appropriate allowance for the purposes of the charge to tax on capital receipts by a participant in an approved profit sharing scheme)— a for “£100” there shall be substituted “ £60 ” ; and b for “five years” there shall be substituted “ three years ” . 2 Subsection (1) above has effect for the year 1997-98 and subsequent years of assessment. Employee share ownership trusts Removal of requirement for at least one year’s service. 119 1 In Schedule 5 to the Finance Act 1989 (employee share ownership trusts) in paragraph 4(5)(a) (for a trust to be a qualifying ESOT, its beneficiaries must have been employees or directors of the company for at least one year) the words “not less than one year and” shall cease to have effect. 2 This section applies to trusts established on or after the day on which this Act is passed. Grant and exercise of share options. 120 1 In Schedule 5 to the Finance Act 1989 (employee share ownership trusts), in paragraph 4 (the trust deed must contain provision as to the beneficiaries) after sub-paragraph (2) there shall be inserted— 2A The trust deed may provide that a person is a beneficiary at a given time if at that time he is eligible to participate in a savings-related share option scheme within the meaning of Schedule 9 to the Taxes Act 1988— a which was established by a company within the founding company’s group, and b which is approved under that Schedule. 2B Where a trust deed contains a rule conforming with sub-paragraph (2A) above it must provide that the only powers and duties which the trustees may exercise in relation to persons who are beneficiaries by virtue only of that rule are those which may be exercised in accordance with the provisions of a scheme such as is mentioned in that sub-paragraph. 2 In consequence of the amendment made by subsection (1) above, section 69 of, and Schedule 5 to, the Finance Act 1989 (which respectively make provision about chargeable events in relation to the trustees of qualifying employee share ownership trusts and the requirements to be satisfied by such trusts) shall be amended in accordance with the following provisions of this section. 3 In subsection (4) of that section (meaning of “ qualifying terms ” for the purposes of the provision that the transfer of securities to beneficiaries is a chargeable event if it is not on qualifying terms)— a in paragraph (a) (securities which are transferred at the same time must be transferred on similar terms) after “time” there shall be inserted “ other than those transferred on a transfer such as is mentioned in subsection (4ZA) below ” ; b in paragraph (b) (securities must have been offered to all the persons who are beneficiaries), after “trust deed” there shall be inserted “ by virtue of a rule which conforms with paragraph 4(2), (3) or (4) of Schedule 5 to this Act ” ; and c in paragraph (c) (securities must be transferred to all such beneficiaries who have accepted the offer) for “beneficiaries” there shall be substituted “ persons ” . 4 After subsection (4) of that section there shall be inserted— 4ZA For the purposes of subsection (1)(b) above a transfer of securities is also made on qualifying terms if— a it is made to a person exercising a right to acquire shares, and b that right was obtained in accordance with the provisions of a savings-related share option scheme within the meaning of Schedule 9 to the Taxes Act 1988— i which was established by, or by a company controlled by, the company which established the trust, and ii which is approved under that Schedule, and c that right is being exercised in accordance with the provisions of that scheme, and d the consideration for the transfer is payable to the trustees. 5 In sub-paragraph (4) of paragraph 4 of that Schedule (trust deed may provide for charity to be beneficiary if there are no beneficiaries falling within a rule conforming with sub-paragraph (2) or (3)) after “sub-paragraph (2)” there shall be inserted “ , (2A) ” . 6 In sub-paragraph (7) of that paragraph (trust deed must not provide for a person to be a beneficiary unless he falls within a rule conforming with sub-paragraph (2), (3) or (4)) after “sub-paragraph (2)” there shall be inserted “ , (2A) ” . 7 In sub-paragraph (8) of that paragraph (trust deed must provide that person with material interest in founding company cannot be a beneficiary) after “at a particular time (the relevant time)” there shall be inserted “ by virtue of a rule which conforms with sub-paragraph (2), (3) or (4) above ” . 8 In paragraph 5(2) of that Schedule (trust deed must be so expressed that it is apparent that the general functions of the trustees are as mentioned in paragraphs (a) to (e)) after paragraph (c) there shall be inserted— cc to grant rights to acquire shares to persons who are beneficiaries under the terms of the trust deed; . 9 In paragraph 9 of that Schedule (trust deed must provide that transfers of securities to beneficiaries must be on qualifying terms and within the qualifying period) in sub-paragraph (2) (meaning of qualifying terms)— a in paragraph (a) (securities which are transferred at the same time must be transferred on similar terms) after “time” there shall be inserted “ other than those transferred on a transfer such as is mentioned in sub-paragraph (2ZA) below ” ; b in paragraph (b) (securities must have been offered to all the persons who are beneficiaries) after “trust deed” there shall be inserted “ by virtue of a rule which conforms with paragraph 4(2), (3) or (4) above ” ; and c in paragraph (c) (securities must be transferred to all such beneficiaries who have accepted the offer) for “beneficiaries” there shall be substituted “ persons ” . 10 After sub-paragraph (2) of that paragraph there shall be inserted— 2ZA For the purposes of sub-paragraph (1) above a transfer of securities is also made on qualifying terms if— a it is made to a person exercising a right to acquire shares, and b that right was obtained in accordance with the provisions of a savings-related share option scheme within the meaning of Schedule 9 to the Taxes Act 1988— i which was established by, or by a company controlled by, the founding company, and ii which is approved under that Schedule, and c that right is being exercised in accordance with the provisions of that scheme, and d the consideration for the transfer is payable to the trustees. 11 In paragraph 10 of that Schedule (trust deed must not contain features not essential or reasonably incidental to purposes mentioned in that paragraph)— a after “acquiring sums and securities,” there shall be inserted “ granting rights to acquire shares to persons who are eligible to participate in savings-related share option schemes approved under Schedule 9 to the Taxes Act 1988, transferring shares to such persons, ” ; and b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 This section has effect in relation to trusts established on or after the day on which this Act is passed. Chapter V Self Assessment, General Management etc. General Returns and self assessment. 121 1 In subsection (1) of section 8 of the Taxes Management Act 1970 (personal return), and in subsection (1) of section 8A of that Act (trustee’s return), after the words “year of assessment,” there shall be inserted the words “ and the amount payable by him by way of income tax for that year, ” . 2 In subsection (1A) of each of those sections, the words from “and the amounts referred to” to the end shall cease to have effect. 3 After that subsection of each of those sections there shall be inserted the following subsection— 1AA For the purposes of subsection (1) above— a the amounts in which a person is chargeable to income tax and capital gains tax are net amounts, that is to say, amounts which take into account any relief or allowance a claim for which is included in the return; and b the amount payable by a person by way of income tax is the difference between the amount in which he is chargeable to income tax and the aggregate amount of any income tax deducted at source and any tax credits to which section 231 of the principal Act applies. 4 For subsection (1) of section 9 of that Act (returns to include self-assessment) there shall be substituted the following subsection— 1 Subject to subsection (2) below, every return under section 8 or 8A of this Act shall include a self-assessment, that is to say— a an assessment of the amounts in which, on the basis of the information contained in the return and taking into account any relief or allowance a claim for which is included in the return, the person making the return is chargeable to income tax and capital gains tax for the year of assessment; and b an assessment of the amount payable by him by way of income tax, that is to say, the difference between the amount in which he is assessed to income tax under paragraph (a) above and the aggregate amount of any income tax deducted at source and any tax credits to which section 231 of the principal Act applies. 5 In subsection (1)(b) of section 11AA of that Act (return of profits to include self-assessment), for the words “, allowance or repayment of tax” there shall be substituted the words “ or allowance ” . 6 In subsection (1)(a) of section 12AA of that Act (partnership return), after the words “so chargeable” there shall be inserted the words “ and the amount payable by way of income tax by each such partner ” . 7 For subsection (1A) of that section there shall be substituted the following subsection— 1A For the purposes of subsection (1) above— a the amount in which a partner is chargeable to income tax or corporation tax is a net amount, that is to say, an amount which takes into account any relief or allowance for which a claim is made; and b the amount payable by a partner by way of income tax is the difference between the amount in which he is chargeable to income tax and the aggregate amount of any income tax deducted at source and any tax credits to which section 231 of the principal Act applies. 8 This section and sections 122, 123, 125 to 127 and 141 below— a so far as they relate to income tax and capital gains tax, have effect as respects the year 1996-97 and subsequent years of assessment, and b so far as they relate to corporation tax, have effect as respects accounting periods ending on or after the appointed day for the purposes of Chapter III of Part IV of the Finance Act 1994. Notional tax deductions and payments. 122 1 At the end of subsection (1) of section 9 of the Taxes Management Act 1970 (as substituted by section 121(4) above) there shall be inserted the words “ but nothing in this subsection shall enable a self-assessment to show as repayable any income tax treated as deducted or paid by virtue of section 233(1), 246D(1), 249(4), 421(1), 547(5) or 599A(5) of the principal Act. ” 2 At the end of subsection (1) of section 59B of that Act (payment of income tax and capital gains tax) there shall be inserted the words “ but nothing in this subsection shall require the repayment of any income tax treated as deducted or paid by virtue of section 233(1), 246D(1), 249(4), 421(1), 547(5) or 599A(5) of the principal Act. ” 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 In subsection (1)(b) of section 421 of that Act (taxation of borrower when loan released), for the words “no assessment shall be made on him in respect of” there shall be substituted the words “ he shall not be liable to pay ” . 7 The following shall cease to have effect, namely— a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b in subsection (6) of section 599A of that Act (charge to tax: payments out of surplus funds), the words from “subject” to “and”; and c subsection (7) of that section. Liability of partners. 123 1 In subsection (2) of section 12AA of the Taxes Management Act 1970 (partnership return) after the words “with the notice” there shall be inserted the words “ or a successor of his ” . 2 In subsection (3) of that section after the words “the partner” there shall be inserted the words “ or a successor of his ” . 3 In subsection (7)(a) of that section, the words “any part of” shall cease to have effect. 4 At the end of that section there shall be inserted the following subsections— 11 In this Act “ successor ”, in relation to a person who is required to make and deliver, or has made and delivered, a return in pursuance of a notice under subsection (2) or (3) above, but is no longer available, means— a where a partner is for the time being nominated for the purposes of this subsection by a majority of the relevant partners, that partner; and b where no partner is for the time being so nominated, such partner as— i in the case of a notice under subsection (2) above, is identified in accordance with rules given with that notice; or ii in the case of a notice under subsection (3) above, is nominated for the purposes of this subsection by an officer of the Board; and “ predecessor ” and “ successor ”, in relation to a person so nominated or identified, shall be construed accordingly. 12 For the purposes of subsection (11) above a nomination under paragraph (a) of that subsection, and a revocation of such a nomination, shall not have effect in relation to any time before notice of the nomination or revocation is given to an officer of the Board. 13 In this section “ relevant partner ” means a person who was a partner at any time during the period for which the return was made or is required, or the personal representatives of such a person. 5 In subsection (1) of section 12AB of that Act (partnership return to include partnership statement)— a in paragraph (a), for the words “each period of account ending within the period in respect of which the return is made” there shall be substituted the words “ the period in respect of which the return is made and each period of account ending within that period ” ; b in sub-paragraph (i) of that paragraph, for the words “that period” there shall be substituted the words “ the period in question ” ; c after that sub-paragraph there shall be inserted the following sub-paragraph— ia the amount of the consideration which, on that basis, has accrued to the partnership in respect of each disposal of partnership property during that period, ; and d in paragraph (b), after the words “such period” there shall be inserted the words “ as is mentioned in paragraph (a) above ” and after the word “loss,” there shall be inserted the word “ consideration, ” . 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 In subsection (1)(b) of section 93A of that Act (failure to make partnership return), after the word “he” there shall be inserted the words “ or a successor of his ” . 9 In subsections (3) and (4) of that section, after the words “the representative partner” there shall be inserted the words “ or a successor of his ” . 10 In subsection (6) of that section— a after the words “the representative partner” there shall be inserted the words “ or a successor of his ” ; and b after the words “that partner”, in both places where they occur, there shall be inserted the words “ or successor ” . 11 In subsection (7) of that section, for the words “the representative partner had a reasonable excuse for not delivering the return” there shall be substituted the words “ the person for the time being required to deliver the return (whether the representative partner or a successor of his) had a reasonable excuse for not delivering it ” . 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 In subsection (1) of section 118 of that Act (interpretation), for the definition of “successor” there shall be substituted the following definition— “ successor ”, in relation to a person who is required to make and deliver, or has made and delivered, a return under section 12AA of this Act, and “ predecessor ” and “ successor ”, in relation to the successor of such a person, shall be construed in accordance with section 12AA(11) of this Act; . Retention of original records. 124 1 The Taxes Management Act 1970, as it has effect— a for the purposes of income tax and capital gains tax, as respects the year 1996-97 and subsequent years of assessment, and b for the purposes of corporation tax, as respects accounting periods ending on or after the day appointed under section 199 of the Finance Act 1994 for the purposes of Chapter III of Part IV of that Act (self-assessment management provisions), shall be amended in accordance with the following provisions of this section. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 After that subsection there shall be inserted— 4A The records which fall within this subsection are— a any statement in writing such as is mentioned in— i subsection (1) of section 234 of the principal Act (amount of qualifying distribution and tax credit), or ii subsection (1) of section 352 of that Act (gross amount, tax deducted, and actual amount paid, in certain cases where payments are made under deduction of tax), which is furnished by the company or person there mentioned, whether after the making of a request or otherwise; b any certificate or other record (however described) which is required by regulations under section 566(1) of the principal Act to be given to a sub-contractor (within the meaning of Chapter IV of Part XIII of that Act) on the making of a payment to which section 559 of that Act (deductions on account of tax) applies; c any such record as may be requisite for making a correct and complete claim in respect of, or otherwise requisite for making a correct and complete return so far as relating to, an amount of tax— i which has been paid under the laws of a territory outside the United Kingdom, or ii which would have been payable under the law of such a territory but for a relief to which section 788(5) of the principal Act (relief for promoting development and relief contemplated by double taxation arrangements) applies. 4 In subsection (5) of that section (penalty for failure to comply with section 12B(1) or (2A)) for “Subject to subsection (5A)” there shall be substituted “ Subject to subsections (5A) and (5B) ” . 5 After subsection (5A) of that section there shall be inserted— 5B Subsection (5) above also does not apply where— a the records which the person fails to keep or preserve are records falling within paragraph (a) of subsection (4A) above; and b an officer of the Board is satisfied that any facts which he reasonably requires to be proved, and which would have been proved by the records, are proved by other documentary evidence furnished to him. 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 In sub-paragraph (4) of that paragraph (penalty for failure to comply with paragraph 2A(1)) at the beginning there shall be inserted “ Subject to sub-paragraph (5) below, ” . 8 After that sub-paragraph there shall be inserted— 5 Sub-paragraph (4) above does not apply where— a the records which the person fails to keep or preserve are records falling within paragraph (a) of section 12B(4A) of this Act; and b an officer of the Board is satisfied that any facts which he reasonably requires to be proved, and which would have been proved by the records, are proved by other documentary evidence furnished to him. 9 The amendments made by this section shall not have effect in relation to— a any time before this Act is passed, or b any records which a person fails to preserve before this Act is passed. Determination of tax where no return delivered. 125 1 For subsection (1) of section 28C of the Taxes Management Act 1970 (determination of tax where no return delivered) there shall be substituted the following subsections— 1 This section applies where— a a notice has been given to any person under section 8 or 8A of this Act (the relevant section), and b the required return is not delivered on or before the filing date. 1A An officer of the Board may make a determination of the following amounts, to the best of his information and belief, namely— a the amounts in which the person who should have made the return is chargeable to income tax and capital gains tax for the year of assessment; and b the amount which is payable by him by way of income tax for that year; and subsection (1AA) of section 8 or, as the case may be, section 8A of this Act applies for the purposes of this subsection as it applies for the purposes of subsection (1) of that section. 2 In subsection (3) of that section the words “or 11AA” shall cease to have effect. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 After subsection (5) of section 59B of that Act (payment of income tax and capital gains tax) there shall be inserted the following subsection— 5A Where a determination under section 28C of this Act which has effect as a person’s self-assessment is superseded by his self-assessment under section 9 of this Act, any amount of tax which is payable or repayable by virtue of the supersession shall be payable or (as the case may be) repayable on or before the day given by subsection (3) or (4) above. PAYE regulations. 126 1 After subsection (9) of section 59A of the Taxes Management Act 1970 (payments on account of income tax) there shall be inserted the following subsection— 10 Regulations under section 203 of the principal Act (PAYE) may provide that, for the purpose of determining the amount of any such excess as is mentioned in subsection (1) above, any necessary adjustments in respect of matters prescribed by the regulations shall be made to the amount of tax deducted at source under that section. 2 After subsection (7) of section 59B of that Act (payment of income tax and capital gains tax) there shall be inserted the following subsection— 8 Regulations under section 203 of the principal Act (PAYE) may provide that, for the purpose of determining the amount of the difference mentioned in subsection (1) above, any necessary adjustments in respect of matters prescribed by the regulations shall be made to the amount of tax deducted at source under that section. Repayment postponed pending completion of enquiries. 127 After subsection (4) of section 59B of the Taxes Management Act 1970 (payment of income tax and capital gains tax) there shall be inserted the following subsection— 4A Where in the case of a repayment the return on the basis of which the person’s self-assessment was made under section 9 of this Act is enquired into by an officer of the Board— a nothing in subsection (3) or (4) above shall require the repayment to be made before the day on which, by virtue of section 28A(5) of this Act, the officer’s enquiries are treated as completed; but b the officer may at any time before that day make the repayment, on a provisional basis, to such extent as he thinks fit. Claims for reliefs involving two or more years. 128 1 In section 42 of the Taxes Management Act 1970 (procedure for making claims etc.)— a subsections (3A) and (3B) (which are superseded by subsection (2) below) shall cease to have effect; b in subsection (7)(a), the words “534, 535, 537A, 538” shall cease to have effect; and c after subsection (11) there shall be inserted the following subsection— 11A Schedule 1B to this Act shall have effect as respects certain claims for relief involving two or more years of assessment. 2 After Schedule 1A to that Act there shall be inserted, as Schedule 1B, the provisions set out in Schedule 17 to this Act (claims for reliefs involving two or more years). 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 This section (except subsections (1)(b) and (6) above) and Schedule 17 to this Act have effect as respects claims made (or deemed to be made) in relation to the year 1996-97 or later years of assessment. 12 Subsection (1)(b) above has effect as respects claims made in relation to the year 1997-98 or later years of assessment. Claims for medical insurance and vocational training relief. 129 1 Nothing in section 42 of the Taxes Management Act 1970 (procedure for making claims etc.), or Schedule 1A to that Act (claims etc. not included in returns), shall apply in relation to— a any claim under subsection (6)(b) of section 54 (medical insurance relief) of the Finance Act 1989 (“the 1989 Act”); or b any claim under subsection (5)(b) of section 32 (vocational training relief) of the Finance Act 1991 (“the 1991 Act”). 2 In section 54(6)(b) of the 1989 Act and section 32(5)(b) of the 1991 Act , after the words “on making a claim” there shall be inserted the words “ in accordance with regulations ” . 3 In section 57(1) of the 1989 Act (medical insurance relief: supplementary), after paragraph (a) there shall be inserted the following paragraph— aa make provision for and with respect to appeals against a decision of an officer of the Board or the Board with respect to a claim under section 54(6)(b) above; . 4 In section 33(1) of the 1991 Act (vocational training relief: supplementary), after paragraph (a) there shall be inserted the following paragraph— aa make provision for and with respect to appeals against a decision of an officer of the Board or the Board with respect to a claim under section 32(5)(b) above; . 5 Subsection (1)(a) above shall not apply in relation to claims made before the coming into force of regulations made by virtue of section 57(1)(aa) of the 1989 Act. 6 Subsection (1)(b) above shall not apply in relation to claims made before the coming into force of regulations made by virtue of section 33(1)(aa) of the 1991 Act. Procedure for giving notices. 130 1 Section 42 of, and Schedule 1A to, the Taxes Management Act 1970, as they have effect— a for the purposes of income tax and capital gains tax, as respects the year 1996-97 and subsequent years of assessment, and b for the purposes of corporation tax, as respects accounting periods ending on or after the day appointed under section 199 of the Finance Act 1994 for the purposes of Chapter III of Part IV of that Act (self-assessment management provisions), shall be amended in accordance with the following provisions of this section. 2 In subsection (7) of section 42 (which contains a list of provisions, claims under which must be made in accordance with subsection (6)) the following words shall cease to have effect, that is to say— a in paragraph (a), “62A,” and “401,”; and b in paragraph (c), “30,”, “33,”, “48, 49,” and “124A,”. 3 In subsection (10) of that section (section 42 to apply in relation to elections and notices as it applies in relation to claims) the words “and notices” shall cease to have effect. 4 In subsection (11) of that section (Schedule 1A to apply as respects any claim, election or notice made otherwise than in a return under section 8 etc) for the words “, election or notice” there shall be substituted “ or election ” . 5 In paragraph 1 of Schedule 1A (claims etc. not included in returns), in the definition of “claim”, for the words “means a claim, election or notice” there shall be substituted “ means a claim or election ” . Interest on overdue tax. 131 1 Section 110 of the Finance Act 1995 (interest on overdue tax) shall be deemed to have been enacted with the insertion after subsection (3) of the following subsection— 4 So far as it relates to partnerships whose trades, professions or businesses were set up and commenced before 6th April 1994, subsection (1) above has effect as respects the year 1997-98 and subsequent years of assessment. 2 In subsection (3) of section 86 of the Taxes Management Act 1970 (which was substituted by the said section 110), for the words “section 93” there shall be substituted the words “ section 92 ” . 3 In Schedule 19 to the Finance Act 1994, paragraph 23 (which is superseded by the said section 110) shall cease to have effect. Overdue tax and excessive payments by the Board. 132 Schedule 18 to this Act (which amends enactments relating to overdue tax or excessive payments by the Board) shall have effect. Claims and enquiries. 133 Schedule 19 to this Act (which, for purposes connected with self-assessment, further amends provisions relating to claims and enquiries) shall have effect. Discretions exercisable by the Board etc. 134 1 Schedule 20 to this Act (which in connection with self-assessment modifies enactments by virtue of which a decision or other action affecting an assessment may be or is required to be taken by the Board, or one of their officers, before the making of the assessment) shall have effect. 2 Subject to subsection (3) below, the amendments made by that Schedule shall have effect— a for the purposes of income tax and capital gains tax, as respects the year 1996-97 and subsequent years of assessment; and b for the purposes of corporation tax, as respects accounting periods ending on or after the day appointed under section 199 of the Finance Act 1994 for the purposes of Chapter III of Part IV of that Act (self-assessment management provisions). 3 Paragraphs 22 and 23 of that Schedule shall have effect in relation to shares issued on or after 6th April 1996. Time limits for claims etc. 135 1 Schedule 21 to this Act (which in connection with self-assessment modifies enactments which impose time limits on the making of claims, elections, adjustments and assessments and the giving of notices, and enactments which provide for the giving of notice to the inspector) shall have effect. 2 Subject to subsections (3) to (5) below, the amendments made by that Schedule shall have effect— a for the purposes of income tax and capital gains tax, as respects the year 1996-97 and subsequent years of assessment; and b for the purposes of corporation tax, as respects accounting periods ending on or after the day appointed under section 199 of the Finance Act 1994 for the purposes of Chapter III of Part IV of that Act (self-assessment management provisions). 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appeals. 136 Schedule 22 to this Act (which makes provision, in connection with self-assessment, about appeals) shall have effect. Companies Schedules 13 and 16 to the Taxes Act 1988. 137 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accounting periods. 138 Schedule 24 to this Act (which makes provision, in connection with self-assessment, in relation to accounting periods) shall have effect. Surrenders of advance corporation tax. 139 Schedule 25 to this Act (which makes provision, in connection with self-assessment, about surrenders of advance corporation tax) shall have effect. Chargeable gains Transfer of company’s assets to investment trust. 140 1 In section 101 of the Taxation of Chargeable Gains Act 1992 (transfer of company’s assets to investment trust) after subsection (1) there shall be inserted— 1A Any chargeable gain or allowable loss which, apart from this subsection, would accrue to the company on the sale referred to in subsection (1) above shall be treated as accruing to the company immediately before the end of the last accounting period to end before the beginning of the accounting period mentioned in that subsection. 2 This section shall have effect as respects accounting periods ending on or after the day appointed under section 199 of the Finance Act 1994 for the purposes of Chapter III of Part IV of that Act (self-assessment management provisions). Roll-over relief. 141 1 In subsection (4) of section 152 of the Taxation of Chargeable Gains Act 1992 (roll-over relief)— a after the word “making” there shall be inserted the words “ or amending ” ; and b after the word “assessments”, in the second place where it occurs, there shall be inserted the words “ or amendments ” . 2 After section 153 of that Act there shall be inserted the following section— Provisional application of sections 152 and 153. 153A 1 This section applies where a person carrying on a trade who for a consideration disposes of, or of his interest in, any assets (“the old assets”) declares, in his return for the chargeable period in which the disposal takes place— a that the whole or any specified part of the consideration will be applied in the acquisition of, or of an interest in, other assets (“the new assets”) which on the acquisition will be taken into use, and used only, for the purposes of the trade; b that the acquisition will take place as mentioned in subsection (3) of section 152; and c that the new assets will be within the classes listed in section 155. 2 Until the declaration ceases to have effect, section 152 or, as the case may be, section 153 shall apply as if the acquisition had taken place and the person had made a claim under that section. 3 The declaration shall cease to have effect as follows— a if and to the extent that it is withdrawn before the relevant day, or is superseded before that day by a valid claim made under section 152 or 153, on the day on which it is so withdrawn or superseded; and b if and to the extent that it is not so withdrawn or superseded, on the relevant day. 4 On the declaration ceasing to have effect in whole or in part, all necessary adjustments— a shall be made by making or amending assessments or by repayment or discharge of tax; and b shall be so made notwithstanding any limitation on the time within which assessments or amendments may be made. 5 In this section “ the relevant day ” means— a in relation to capital gains tax, the third anniversary of the 31st January next following the year of assessment in which the disposal of, or of the interest in, the old assets took place; b in relation to corporation tax, the fourth anniversary of the last day of the accounting period in which that disposal took place. 6 Subsections (6), (8), (10) and (11) of section 152 shall apply for the purposes of this section as they apply for the purposes of that section. 3 In section 175 of that Act (replacement of business assets by members of a group)— a in subsections (2A) and (2B), after the words “Section 152” there shall be inserted the words “ or 153 ” ; and b in subsection (2C), for the words “Section 152 shall not” there shall be substituted the words “ Neither section 152 nor section 153 shall ” . 4 In section 246 of that Act (time of disposal or acquisition), the words from “or, if earlier” to the end shall cease to have effect. 5 In subsection (5)(b) of section 247 of that Act (roll-over relief on compulsory acquisition), for the words “subsection (3)” there shall be substituted the words “ subsections (3) and (4) ” . 6 After that section there shall be inserted the following section— Provisional application of section 247. 247A 1 This section applies where a person who disposes of land (“the old land”) to an authority exercising or having compulsory powers declares, in his return for the chargeable period in which the disposal takes place— a that the whole or any specified part of the consideration for the disposal will be applied in the acquisition of other land (“the new land”); b that the acquisition will take place as mentioned in subsection (3) of section 152; and c that the new land will not be land excluded from section 247(1)(c) by section 248. 2 Until the declaration ceases to have effect, section 247 shall apply as if the acquisition had taken place and the person had made a claim under that section. 3 For the purposes of this section, subsections (3) to (5) of section 153A shall apply as if the reference to section 152148. or 153 were a reference to section 247 and the reference to the old assets were a reference to the old land. 4 In this section “ land ” and “ authority exercising or having compulsory powers ” have the same meaning as in section 247. Premiums for leases. 142 1 Paragraph 3 of Schedule 8 to the Taxation of Chargeable Gains Act 1992 (premiums for leases) shall be amended as follows. 2 In sub-paragraph (2), for the words “for the period” to the end there shall be substituted the words , being a premium which— a is due when the sum is payable by the tenant; and b where the sum is payable in lieu of rent, is in respect of the period in relation to which the sum is payable. 3 In sub-paragraph (3), for the words “for the period” to the end there shall be substituted the words , being a premium which— a is due when the sum is payable by the tenant; and b is in respect of the period from the time when the variation or waiver takes effect to the time when it ceases to have effect. 4 For sub-paragraphs (4) to (6) there shall be substituted the following sub-paragraphs— 4 Where under sub-paragraph (2) or (3) above a premium is deemed to have been received by the landlord, that shall not be the occasion of any recomputation of the gain accruing on the receipt of any other premium, and the premium shall be regarded— a in the case of a premium deemed to have been received for the surrender of a lease, as consideration for a separate transaction which is effected when the premium is deemed to be due and consists of the disposal by the landlord of his interest in the lease; and b in any other case, as consideration for a separate transaction which is effected when the premium is deemed to be due and consists of a further part disposal of the freehold or other asset out of which the lease is granted. 5 If under sub-paragraph (2) or (3) above a premium is deemed to have been received by the landlord, otherwise than as consideration for the surrender of the lease, and the landlord is a tenant under a lease the duration of which does not exceed 50 years, this Schedule shall apply— a as if an amount equal to the amount of that premium deemed to have been received had been given by way of consideration for the grant of the part of the sublease covered by the period in respect of which the premium is deemed to have been paid; and b as if that consideration were expenditure incurred by the sublessee and attributable to that part of the sublease under section 38(1)(b). 5 This section has effect as respects sums payable on or after 6th April 1996. Chapter VI Miscellaneous provisions Reliefs Annual payments under certain insurance policies. 143 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vocational training. 144 1 Section 32 of the Finance Act 1991 (vocational training relief) shall be amended in accordance with the following provisions of this section. 2 In subsection (1) (application of section) for paragraph (ca) (individual has attained school leaving age etc at time of paying for the course) there shall be substituted— ca at the time the payment is made, the individual— i in a case where the qualifying course of vocational training is such a course by virtue only of paragraph (b) of subsection (10) below, has attained the age of thirty, or ii in any other case, has attained school-leaving age and, if under the age of nineteen, is not a person who is being provided with full-time education at a school, . 3 For subsection (10) (meaning of “qualifying course of vocational training”) there shall be substituted— 10 In this section “ qualifying course of vocational training ” means— a any programme of activity capable of counting towards a qualification— i accredited as a National Vocational Qualification by the National Council for Vocational Qualifications; or ii accredited as a Scottish Vocational Qualification by the Scottish Vocational Education Council; or b any course of training which— i satisfies the conditions set out in the paragraphs of section 589(1) of the Taxes Act 1988 (qualifying courses of training etc), ii requires participation on a full-time or substantially full-time basis, and iii extends for a period which consists of or includes four consecutive weeks, but treating any time devoted to study in connection with the course as time devoted to the practical application of skills or knowledge. 4 This section applies to payments made on or after 6th May 1996. Personal reliefs for non-resident EEA nationals. 145 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exemptions for charities. 146 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Withdrawal of relief for Class 4 contributions. 147 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 In consequence of the provision made by subsection (1) above, in paragraph 3(2) of Schedule 2 to— a the Social Security Contributions and Benefits Act 1992, and b the Social Security Contributions and Benefits (Northern Ireland) Act 1992, the words “ (e) section 617(5) (relief for Class 4 contributions); ” shall be omitted. 3 This section shall have effect in relation to the year 1996-97 and subsequent years of assessment. Mis-sold personal pensions etc. 148 1 Income tax shall not be chargeable on any payment falling within subsection (3) or (5) below. 2 Receipt of a payment falling within subsection (3) below shall not be regarded for the purposes of capital gains tax as the disposal of an asset. 3 A payment falls within this subsection if it is a capital sum by way of compensation for loss suffered, or reasonably likely to be suffered, by a person in a case where that person, or some other person, acting in reliance on bad investment advice at least some of which was given during the period beginning with 29th April 1988 and ending with 30th June 1994,— a has, while eligible, or reasonably likely to become eligible, to be a member of an occupational pension scheme, instead become a member of a personal pension scheme or entered into a retirement annuity contract; b has ceased to be a member of, or to pay contributions to, an occupational pension scheme and has instead become a member of a personal pension scheme or entered into a retirement annuity contract; c has transferred to a personal pension scheme accrued rights of his under an occupational pension scheme; or d has ceased to be a member of an occupational pension scheme and has instead (by virtue of such a provision as is mentioned in section 591(2)(g) of the Taxes Act 1988) entered into arrangements for securing relevant benefits by means of an annuity contract. 4 A payment chargeable to income tax apart from subsection (1) above may nevertheless be regarded as a capital sum for the purpose of determining whether it falls within subsection (3) above. 5 A payment falls within this subsection if and to the extent that it is a payment of interest, on the whole or any part of a capital sum such as is mentioned in subsection (3) above, for a period ending on or before the earliest date on which a determination (whether or not subsequently varied on an appeal or in any other proceedings) of the amount of the particular capital sum in question is made, whether by agreement or by a decision of— a a court, tribunal or commissioner, b an arbitrator or (in Scotland) arbiter, or c any other person appointed for the purpose. 6 In this section— “ bad investment advice ” means investment advice in respect of which an action against the person who gave it has been, or may be, brought— in or for negligence; for breach of contract; by reason of a breach of a fiduciary obligation; or by reason of a contravention which is actionable— under section 62 of the Financial Services Act 1986; or under section 150 of the Financial Services and Markets Act 2000; “investment advice”— in relation to a time before 1st December 2001, means advice such as is mentioned in paragraph 15 of Schedule 1 to the Financial Services Act 1986; and in relation to a time on or after that date, means advice such as is mentioned in Article 53 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001; “ occupational pension scheme ” means— a scheme approved, or being considered for approval, under Chapter I of Part XIV of the Taxes Act 1988 (retirement benefit schemes); a relevant statutory scheme, as defined in section 611A(1) of that Act; or a fund to which section 608 of that Act applies (superannuation funds approved before 6th April 1980 etc); “ personal pension scheme ” has the meaning given by section 630(1) of the Taxes Act 1988; “ relevant benefits ” has the meaning given by section 612(1) of the Taxes Act 1988; “ retirement annuity contract ” means a contract made before 1st July 1988 and approved by the Board under or by virtue of any provision of Chapter III of Part XIV of the Taxes Act 1988. 6A References in subsections (3)(d) and (6) to provisions of Part 14 of the Taxes Act 1988 are to those provisions as they had effect at the time in question. 7 This section shall have effect, and be taken always to have had effect, in relation to any payment falling within subsection (3) or (5) above, whether made before or after the passing of this Act. Annual payments in residuary cases. 149 1 Section 347A of the Taxes Act 1988 (annual payments not a charge on the income of a payer) shall apply to any payment made on or after 6th April 1996— a in pursuance of any obligation which falls within section 36(4)(a) of the Finance Act 1988 (existing obligations under certain court orders), and b for the benefit, maintenance or education of a person (whether or not the person to whom the payment is made) who attained the age of 21 before 6th April 1994, as if that obligation were not an existing obligation within the definition contained in section 36(4) of the Finance Act 1988. 2 Subsection (1) above does not apply to any payment to which section 38 of the Finance Act 1988 (treatment of certain maintenance payments under existing obligations) applies. Income tax exemption for periodical payments of damages and compensation for personal injury. 150 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Taxation of benefits Benefits under pilot schemes. 151 1 The Treasury may by order make provision for the Income Tax Acts to have effect in relation to any amount of benefit payable by virtue of a Government pilot scheme as if it was, as they think fit, either— a wholly or partly exempt from income tax and, accordingly, to be disregarded in computing the amount of any receipts brought into account for income tax purposes; or b to the extent specified in the order, to be brought into account for the purposes of income tax as income of a description so specified or as a receipt of a description so specified. 2 The Treasury may by order provide for any amount of benefit payable by virtue of a Government pilot scheme to be left out of account, to the extent specified in the order, in the determination for the purposes of section 532 of the Capital Allowances Act (exclusion of expenditure met by contributions) of how far any expenditure has been or is to be met directly or indirectly by the Crown or by an authority or person other than the person actually incurring it. 3 In this section “ Government pilot scheme ” means any arrangements (whether or not contained in a scheme) which— a are made, under any enactment or otherwise, by the Secretary of State or any Northern Ireland department; b make provision for or about the payment of amounts of benefit either— i for purposes that are similar to those for which any social security or comparable benefit is payable; or ii for purposes connected with the carrying out of any functions of the Secretary of State or any such department in relation to employment or training for employment; c are arrangements relating to a temporary experimental period; and d are made wholly or partly for the purpose of facilitating a decision as to whether, or to what extent, it is desirable for provision to be made on a permanent basis for or in relation to any benefit. 4 In subsection (3)(b) above the reference to making provision for or about the payment of amounts of benefit for purposes that are similar to those for which any social security or comparable benefit is payable shall include a reference to making provision by virtue of which there is a modification of the conditions of entitlement to, or the conditions for the payment of, an existing social security or comparable benefit. 5 An order under this section may— a make different provision for different cases, and b contain such incidental, supplemental, consequential and transitional provision (including provision modifying provision made by or under the Income Tax Acts) as the Treasury may think fit. 6 In this section “ benefit ” includes any allowance, grant or other amount the whole or any part of which is payable directly or indirectly out of public funds. 7 The power to make an order under this section— a shall be exercisable for the year 1996-97 and subsequent years of assessment; and b so far as exercisable for the year 1996-97, shall be exercisable in relation to benefits, allowances and other amounts paid at times on or after 6th April 1996 but before the making of the order. 8 The Treasury shall not make an order under this section containing any such provision as is mentioned in subsection (1)(b) above unless a draft of the order has been laid before, and approved by a resolution of, the House of Commons. Jobfinder’s grant. 152 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investments Foreign income dividends. 153 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FOTRA securities. 154 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Schedule 28 to this Act (which contains amendments consequential on the provisions of this section) shall have effect. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 This section and Schedule 28 to this Act shall have effect— a for the purposes of income tax, for the year 1996-97 and subsequent years of assessment; and b for the purposes of corporation tax, for accounting periods ending after 31st March 1996. Directions for payment without deduction of tax. 155 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Paying and collecting agents etc. 156 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stock lending fees. 157 1 After section 129A of the Taxes Act 1988 (interest on cash collateral paid in connection with stock lending arrangements) there shall be inserted the following section— Stock lending fees. 129B 1 The income which, as income deriving from investments of a description specified in any of the relevant provisions, is eligible for relief from tax by virtue of that provision shall be taken to include any relevant stock lending fee. 2 For the purposes of this section the relevant provisions are sections 592(2), 608(2)(a), 613(4), 614(3), 620(6) and 643(2). 3 In this section “ relevant stock lending fee ”, in relation to investments of any description, means any amount, in the nature of a fee, which is payable in connection with an approved stock lending arrangement relating to investments which, but for any transfer under the arrangement, would be investments of that description. 4 In this section “ approved stock lending arrangement ” has the same meaning as in Schedule 5A. 2 This section has effect in relation to any arrangements entered into on or after 2nd January 1996. Transfers on death under the accrued income scheme. 158 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Manufactured payments, repos, etc. 159 1 Sections 729, 737A(2)(b) and 786(4) of the Taxes Act 1988 (provisions applying to sale and repurchase agreements) shall cease to have effect except in relation to cases where the initial agreement to sell or transfer the securities or other property was made before the appointed day. 2 In section 737 of that Act— a in subsection (5) (manufactured dividends paid to UK residents by non-residents), for the words from “a person resident in the United Kingdom” to “the United Kingdom recipient shall” there shall be substituted “ a United Kingdom recipient, that recipient shall ” ; and b after that subsection there shall be inserted the following subsection— 5AAA For the purposes of subsection (5) above a person who receives a manufactured dividend is a United Kingdom recipient if— a he is resident in the United Kingdom; or b he is not so resident but receives that dividend for the purposes of a trade carried on through a branch or agency in the United Kingdom. 3 In section 737C of that Act (deemed manufactured payments), the following subsection shall be inserted after subsection (11A) in relation to cases where the initial agreement to sell the securities is made on or after the appointed day, that is to say— 11B The preceding provisions of this section shall have effect in cases where paragraph 2, 3 or 4 of Schedule 23A would apply by virtue of section 737A(5) but for paragraph 5 of that Schedule as they have effect in a case where the paragraph in question is not disapplied by paragraph 5; and where— a the gross amount of the deemed manufactured interest, or b the gross amount of the deemed manufactured overseas dividend, falls to be calculated in such a case under subsection (8) or (11) above, it shall be so calculated by reference to the provisions of paragraph 3 or 4 of Schedule 23A that would have applied but for paragraph 5 of that Schedule. 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 In sub-paragraph (1) of paragraph 8 of that Schedule (power to modify provisions of Schedule)— a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b in the words after paragraph (b), for “paragraph 2, 3 or 4 above” there shall be substituted “ paragraphs 2 to 5 above ” . 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Subsections (2), (4) and (5) above have effect— a for the purposes of corporation tax, in relation to accounting periods ending after 31st March 1996; and b for the purposes of income tax, in relation to the year 1996-97 and subsequent years of assessment. 10 In this section “ the appointed day ” means such day as the Treasury may by order appoint, and different days may be appointed under this subsection for different purposes. Investments in housing. 160 Schedule 30 to this Act (which makes provision conferring relief from corporation tax on companies that invest in housing) shall have effect. Venture capital trusts: control of companies etc. 161 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Insurance policies Qualifying life insurance policies: certification. 162 1 Section 55 of the Finance Act 1995 (removal of certification requirements for qualifying policies with respect to any time on or after 5th May 1996 etc) shall have effect— a with the substitution for “5th May 1996”, wherever occurring, of “the appointed date”; and b with the addition of the following subsection after subsection (8)— 9 In this section “ the appointed date ” means such date as may be specified for the purpose in an order made by the Board. 2 In Schedule 15 to the Taxes Act 1988 (qualifying policies) paragraphs 24(2A) and 25(2) shall have effect with the substitution for “5th May 1996” of “ the appointed date for the purposes of section 55 of the Finance Act 1995 (removal of certification requirements) ” . Insurance companies Life assurance business losses. 163 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Limits on relief for expenses. 164 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Subject to subsection (6) below, this section has effect in relation to accounting periods beginning on or after 1st January 1996. 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annual payments under insurance policies: deductions. 165 1 In section 337 of the Taxes Act 1988 (deductions in computing income), the following subsections shall be inserted after subsection (2)— 2A In computing any profits or losses of a company in accordance with the provisions of this Act applicable to Case I of Schedule D, subsection (2)(b) above shall not prevent the deduction of any annuity or other annual payment which is payable by a company wholly or partly in satisfaction of any claim under an insurance policy in relation to which the company is the insurer. 2B The reference in subsection (2A) above to an annuity payable wholly or partly in satisfaction of a claim under an insurance policy shall be taken, in relation to an insurance company (within the meaning of Chapter I of Part XII), to include a reference to every annuity payable by that company; and the references in sections 338(2) and 434B(2) to an annuity paid wholly or partly as mentioned in subsection (2A) above shall be construed accordingly. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 In section 434B of that Act (treatment of interest and annuities in the case of insurance companies), subsection (1) shall cease to have effect; and in subsection (2), for the words from the beginning to “mentioned in subsection (1) above” there shall be substituted— 2 Nothing in section 337(2A) or 338(2) shall be construed as preventing any annuity or other annual payment which is paid wholly or partly as mentioned in section 337(2A) . 4 Subject to subsection (5) below, this section has effect in relation to accounting periods beginning on or after 1st January 1996. 5 In relation to any accounting period beginning on or after 1st January 1996 but ending before 1st April 1996, this section shall have effect as if any reference in provisions inserted by this section to an annuity payable or paid by an insurance company included a reference to any such interest as was mentioned in section 434B(1) of the Taxes Act 1988 before its repeal by virtue of this section. Equalisation reserves. 166 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Industrial assurance business. 167 1 In section 432 of the Taxes Act 1988, subsection (2) (industrial assurance business treated as separate business for the purposes of Chapter I of Part XII) shall cease to have effect. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 In Schedule 14 to the Taxes Act 1988 (ancillary provisions about relief in respect of life assurance premiums), in paragraph 8, at the beginning of sub-paragraph (4) (policy which is varied so as to increase benefits, etc. to be treated as issued after 13th March 1984) there shall be inserted “ Subject to sub-paragraph (8) below, ” . 6 After sub-paragraph (7) of that paragraph there shall be inserted the following sub-paragraph— 8 Sub-paragraph (4) above does not apply in the case of a variation so as to increase the benefits secured, if the variation is made— a on or after such day as the Board may by order appoint, and b in consideration of a change in the method of payment of premiums from collection by a person collecting premiums from house to house to payment by a different method. 7 In Schedule 15 to the Taxes Act 1988 (qualifying policies)— a in paragraph 1(6) (calculation of amount included in premiums of whole life and term insurances in respect of their payment otherwise than annually), for “and if the policy is issued in the course of an industrial assurance business,” there shall be substituted “ sand if the policy provides for payment otherwise than annually without providing for the amount of the premiums if they are paid annually, ” ; and b in paragraph 2(2) (the equivalent calculation for endowment assurances), for “issued in the course of an industrial assurance business” there shall be substituted “ that provides for the payment of premiums otherwise than annually without providing for the amount of the premiums if they are paid annually, ” . 8 After paragraph 8 of that Schedule there shall be inserted the following paragraph— 8A 1 Paragraphs 7 and 8 above shall have effect in relation to any policy issued on or after the appointed day as if the references to the issue of a policy in the course of an industrial assurance business were references to the issue of a policy by any company in a case in which— a the company, before that day and in the course of such a business, issued any policy which was a qualifying policy by virtue of either of those paragraphs; and b the policies which on 28th November 1995 were being offered by the company as available to be issued included policies of the same description as the policy issued on or after the appointed day. 2 In this paragraph “ the appointed day ” means such day as the Board may by order appoint. 9 In paragraph 18(3) of that Schedule (certain variations of a policy not to affect whether policy is a qualifying policy), after paragraph (b) there shall be inserted or c any variation so as to increase the benefits secured or reduce the premiums payable which is effected— i on or after such day as the Board may by order appoint, and ii in consideration of a change in the method of payment of premiums from collection by a person collecting premiums from house to house to payment by a different method. 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Subsection (4) above shall come into force on such day as the Board may by order appoint. 12 Subsection (7) above shall have effect in relation to policies issued on or after such day as the Board may by order appoint. Capital redemption business. 168 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169 Time for amending and enquiring into returns. 170 1 After section 11AB of the Taxes Management Act 1970 there shall be inserted the following sections— Modifications of sections 11AA and 11AB in relation to non-annual accounting of general insurance business. 11AC 1 This section applies in any case where a company carrying on insurance business in any period delivers a return for that period under section 11 of this Act which is based wholly or partly on accounts which the company is required or permitted to draw up using the method described in paragraph 52 of Schedule 9A to the Companies Act 1985 (accounting for general insurance business on a non-annual basis). 2 Where this section applies, section 11AA(2) of this Act shall have effect as if after paragraph (b) there were added “and c1 where a company has delivered a return which is based wholly or partly on accounts drawn up as mentioned in section 11AC(1) of this Act, then, at any time before the end of the period of twelve months beginning with the date on which any particular technical provision constituted in the case of those accounts as described in paragraph 52 of Schedule 9A to the Companies Act 1985 is replaced as described in sub-paragraph (4) of that paragraph, the company may by notice to an officer of the Board so amend its self-assessment as to give effect to any amendments to the return— i which arise from the replacement of that technical provision, and ii which the company has notified to such an officer.” 3 Where this section applies, section 11AB of this Act shall have effect— a as if in subsection (1)(b) after “subsection (2)(b)” there were inserted “or (c1)”; and b as if in subsection (2) for the words from “is” to the end of paragraph (b) there were substituted— “ in the case of a return (whenever delivered) which is based wholly or partly on accounts drawn up as mentioned in section 11AC(1) of this Act, is whichever of the following periods ends the later, that is to say— i the period of two years beginning with the date (or, if there is more than one such date, the latest date) on which any technical provision constituted in the case of those accounts as described in paragraph 52 of Schedule 9A to the Companies Act 1985 is replaced as mentioned in sub-paragraph (4) of that paragraph; or ii the period ending with the quarter day next following the first anniversary of the day on which the return was delivered; and b1 in the case of an amendment of such a return— i if the amendment is made on or before the filing date, is the period of twelve months beginning with that date; or ii if the amendment is made after that date, is the period ending with the quarter day next following the first anniversary of the day on which the amendment was made;”. Modifications of sections 11AA and 11AB for insurance companies with non-annual actuarial investigations. 11AD 1 This section applies in any case where a return under section 11 of this Act is delivered by an insurance company which is permitted by an order under section 68 of the Insurance Companies Act 1982 to cause investigations to be made into its financial condition less frequently than is required by section 18 of that Act. 2 Where this section applies, section 11AA(2) of this Act shall have effect as if, after paragraph (b), there were added “and c2 where a company falling within section 11AD(1) of this Act has delivered a return for any period, then, at any time before the end of the period of twelve months beginning with the date as at which the relevant investigation is carried out, that is to say— i if the return is for a period as at the end of which there is carried out an investigation under section 18 of the Insurance Companies Act 1982 into the financial condition of the company, that investigation, or ii if the return is not for such a period, the first such investigation to be made into the financial condition of the company as at the end of a subsequent period, the company may by notice to an officer of the Board so amend its self-assessment as to give effect to any amendments to its return which arise from that investigation and which the company has notified to such an officer.” 3 Where this section applies, section 11AB of this Act shall have effect— a as if in subsection (1)(b) after “subsection (2)(b)” there were inserted “or (c2)”; and b as if in subsection (2) for the words from “is” to the end of paragraph (b) there were substituted— “ in the case of a return delivered at any time by a company falling within section 11AD(1) of this Act, is the period of two years beginning with the date as at which the relevant investigation, as defined in section 11AA(2)(c2) of this Act, is carried out; and b2 in the case of an amendment of such a return— i if the amendment is made on or before the filing date, is the period of twelve months beginning with that date; or ii if the amendment is made after that date, is the period ending with the quarter day next following the first anniversary of the day on which the amendment was made;”. Modifications of sections 11AA and 11AB for friendly societies with non-annual actuarial investigations. 11AE 1 This section applies in any case where a return under section 11 of this Act is delivered by a friendly society which is required by section 47 of the Friendly Societies Act 1992 to cause an investigation to be made into its financial condition at least once in every period of three years. 2 Where this section applies, section 11AA(2) of this Act shall have effect as if, after paragraph (b), there were added “and c3 where a friendly society falling within section 11AE(1) of this Act has delivered a return for any period, then, at any time before the end of the period of fifteen months beginning with the date as at which the relevant investigation is carried out, that is to say— i if the return is for a period as at the end of which there is carried out an investigation under section 47 of the Friendly Societies Act 1992 into the financial condition of the society, that investigation, or ii if the return is not for such a period, the first such investigation to be made into the financial condition of the society as at the end of a subsequent period, the society may by notice to an officer of the Board so amend its self-assessment as to give effect to any amendments to its return which arise from that investigation and which the society has notified to such an officer.” 3 Where this section applies, section 11AB of this Act shall have effect— a as if in subsection (1)(b) after “subsection (2)(b)” there were inserted “or (c3)”; and b as if in subsection (2) for the words from “is” to the end of paragraph (b) there were substituted— “ in the case of a return delivered at any time by a friendly society falling within section 11AE(1) of this Act, is the period of twenty seven months beginning with the date as at which the relevant investigation, as defined in section 11AA(2)(c3) of this Act, is carried out; and b3 in the case of an amendment of such a return— i if the amendment is made on or before the filing date, is the period of twelve months beginning with that date; or ii if the amendment is made after that date, is the period ending with the quarter day next following the first anniversary of the day on which the amendment was made;”. 2 The amendment made by subsection (1) above shall have effect as respects accounting periods ending on or after the day appointed under section 199 of the Finance Act 1994 for the purposes of Chapter III of Part IV of that Act (self-assessment management provisions). Friendly societies Life or endowment business. 171 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Personal pension schemes Return of contributions on or after death of member. 172 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Participators in close companies Loans to participators etc. 173 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 In section 826(4) of that Act (interest on repayment of tax by virtue of section 419), for paragraph (a) there shall be substituted the following paragraph— a the date when the entitlement to relief in respect of the repayment accrued, that is to say— i where the repayment of the loan or advance (or part thereof) occurred on or after the day mentioned in section 419(4A), the date nine months after the end of that accounting period; and ii in any other case, the date nine months after the end of the accounting period in which the loan or advance was made; or . 6 This section has effect in relation to any loan or advance made in an accounting period ending on or after 31st March 1996. Attribution of gains to participators in non-resident companies. 174 1 Section 13 of the Taxation of Chargeable Gains Act 1992 (attribution of gains to members of non-resident companies) shall be amended in accordance with subsections (2) to (9) below. 2 In subsection (2) (persons subject to charge on gain to company), for “holds shares” there shall be substituted “ is a participator ” . 3 For subsections (3) and (4) (part of gain attributed to person subject to charge) there shall be substituted the following subsections— 3 That part shall be equal to the proportion of the gain that corresponds to the extent of the participator’s interest as a participator in the company. 4 Subsection (2) above shall not apply in the case of any participator in the company to which the gain accrues where the aggregate amount falling under that subsection to be apportioned to him and to persons connected with him does not exceed one twentieth of the gain. 4 In subsection (5), paragraph (a) (section not to apply where gain distributed within two years) shall be omitted; and after that subsection there shall be inserted the following subsection— 5A Where— a any amount of capital gains tax is paid by a person in pursuance of subsection (2) above, and b an amount in respect of the chargeable gain is distributed (either by way of dividend or distribution of capital or on the dissolution of the company) within 2 years from the time when the chargeable gain accrued to the company, that amount of tax (so far as neither reimbursed by the company nor applied as a deduction under subsection (7) below) shall be applied for reducing or extinguishing any liability of that person to income tax in respect of the distribution or (in the case of a distribution falling to be treated as a disposal on which a chargeable gain accrues to that person) to any capital gains tax in respect of the distribution. 5 In subsection (7) (deduction of tax paid in computing gain on shares in the company)— a for “not reimbursed by the company)” there shall be inserted “ neither reimbursed by the company nor applied under subsection (5A) above for reducing any liability to tax) ” ; and b for “the shares by reference to which the tax was paid” there shall be substituted “ any asset representing his interest as a participator in the company. ” 6 After subsection (7) there shall be inserted the following subsection— 7A In ascertaining for the purposes of subsection (5A) or (7) above the amount of capital gains tax or income tax chargeable on any person for any year on or in respect of any chargeable gain or distribution— a any such distribution as is mentioned in subsection (5A)(b) above and falls to be treated as income of that person for that year shall be regarded as forming the highest part of the income on which he is chargeable to tax for the year; b any gain accruing in that year on the disposal by that person of any asset representing his interest as a participator in the company shall be regarded as forming the highest part of the gains on which he is chargeable to tax for that year; c where any such distribution as is mentioned in subsection (5A)(b) above falls to be treated as a disposal on which a gain accrues on which that person is so chargeable, that gain shall be regarded as forming the next highest part of the gains on which he is so chargeable, after any gains falling within paragraph (b) above; and d any gain treated as accruing to that person in that year by virtue of subsection (2) above shall be regarded as the next highest part of the gains on which he is so chargeable, after any gains falling within paragraph (c) above. 7 In subsection (9) (cases where person charged is a company)— a for “the person owning any of the shares in the company” there shall be substituted “ a person who is a participator in the company ” ; and b for the words from “to the shares” onwards there shall be substituted “ to the participating company’s interest as a participator in the company to which the gain accrues shall be further apportioned among the participators in the participating company according to the extent of their respective interests as participators, and subsection (2) above shall apply to them accordingly in relation to the amounts further apportioned, and so on through any number of companies. ” 8 In subsection (10) (application to trustees), for “owning shares in the company” there shall be substituted “ who are participators in the company, or in any company amongst the participators in which the gain is apportioned under subsection (9) above, ” . 9 After subsection (11) there shall be inserted the following subsections— 12 In this section “ participator ”, in relation to a company, has the meaning given by section 417(1) of the Taxes Act for the purposes of Part XI of that Act (close companies). 13 In this section— a references to a person’s interest as a participator in a company are references to the interest in the company which is represented by all the factors by reference to which he falls to be treated as such a participator; and b references to the extent of such an interest are references to the proportion of the interests as participators of all the participators in the company (including any who are not resident or ordinarily resident in the United Kingdom) which on a just and reasonable apportionment is represented by that interest. 14 For the purposes of this section, where— a the interest of any person in a company is wholly or partly represented by an interest which he has under any settlement (“his beneficial interest”), and b his beneficial interest is the factor, or one of the factors, by reference to which that person would be treated (apart from this subsection) as having an interest as a participator in that company, the interest as a participator in that company which would be that person’s shall be deemed, to the extent that it is represented by his beneficial interest, to be an interest of the trustees of the settlement (and not of that person), and references in this section, in relation to a company, to a participator shall be construed accordingly. 15 Any appeal under section 31 of the Management Act involving any question as to the extent for the purposes of this section of a person’s interest as a participator in a company shall be to the Special Commissioners. 10 In paragraph 1(3) of Schedule 5 to the Taxation of Chargeable Gains Act 1992 (application of section 86 to section 13 gains)— a in paragraph (a), for “hold shares in a company which originate” there shall be substituted “ are participators in a company in respect of property which originates ” ; b in paragraph (b), for “the shares” there shall be substituted “ so much of their interest as participators as arises from that property ” ; and c at the end there shall be added— Subsections (12) and (13) of section 13 shall apply for the purposes of this sub-paragraph as they apply for the purposes of that section. 11 This section applies to gains accruing on or after 28th November 1995. Cancellation of tax advantages Transactions in certain securities. 175 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chargeable gains: reliefs Retirement relief: age limits. 176 1 In each of sections 163 and 164 of, and paragraph 5 of Schedule 6 to, the Taxation of Chargeable Gains Act 1992 (retirement relief), for “the age of 55”, wherever occurring, there shall be substituted “ the age of 50 ” . 2 The amendments made by this section shall apply in relation to disposals on or after 28th November 1995. Reinvestment relief on disposal of qualifying corporate bond. 177 Section 164A of the Taxation of Chargeable Gains Act 1992 (re-investment relief) shall have effect, and be deemed always to have had effect, as if the following subsections were inserted after subsection (2)— 2A Where the chargeable gain referred to in subsection (1)(a) above is one which (apart from this section) would be deemed to accrue by virtue of section 116(10)(b)— a any reduction falling to be made by virtue of subsection (2)(a) above shall be treated as one made in the consideration mentioned in section 116(10)(a), instead of in the consideration for the disposal of the asset disposed of; but b if the disposal on which that gain is deemed to accrue is a disposal of only part of the new asset, it shall be assumed, for the purpose only of making a reduction affecting the amount of that gain— i that the disposal is a disposal of the whole of a new asset, ii that the gain accruing on that disposal relates to an old asset consisting in the corresponding part of what was in fact the old asset, and iii that the corresponding part of the consideration deemed to be given for what was in fact the old asset is taken to be the consideration by reference to which the amount of that gain is computed; and in this subsection “ new asset ” and “ old asset ” have the same meanings as in section 116. 2B Where a chargeable gain accrues in accordance with subsection (12) of section 116, this Chapter shall have effect— a as if that gain were a gain accruing on the disposal of an asset; and b in relation to that deemed disposal, as if references in this Chapter to the consideration for the disposal were references to the sum of money falling, apart from this Chapter, to be used in computing the gain accruing under that subsection. Special cases Sub-contractors in the construction industry. 178 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180 Overseas petroleum. 181 1 In subsection (1) of section 196 of the Taxation of Chargeable Gains Act 1992 (interpretation of sections 194 and 195), for “licence” there shall be substituted “ UK licence ” . 2 After subsection (1) of section 196 of that Act there shall be inserted the following subsection— 1A For the purposes of section 194 a licence other than a UK licence relates to an undeveloped area at any time if, at that time— a no development has actually taken place in any part of the licensed area; and b no condition for the carrying out of development anywhere in that area has been satisfied— i by the grant of any consent by the authorities of a country or territory exercising jurisdiction in relation to the area; or ii by the approval or service on the licensee, by any such authorities, of any programme of development. ; and in subsection (2) of that section for “subsection (1) above” there shall be substituted “ subsections (1) and (1A) above ” . 3 For subsection (5) of section 196 of that Act there shall be substituted the following subsections— 5 In sections 194 and 195 and this section— “ foreign oil concession ” means any right to search for or win overseas petroleum, being a right conferred or exercisable (whether or not by virtue of a licence) in relation to a particular area; “ interest ” in relation to a licence, includes, where there is an agreement which— relates to oil from the whole or any part of the licensed area, and was made before the extraction of the oil to which it relates, any entitlement under that agreement to, or to a share of, either that oil or the proceeds of its sale; “ licence ” means any UK licence or foreign oil concession; “ licensed area ” (subject to subsection (4) above)— in relation to a UK licence, has the same meaning as in Part I of the Oil Taxation Act 1975; and in relation to a foreign oil concession, means the area to which the concession applies; “ licensee ”— in relation to a UK licence, has the same meaning as in Part I of the Oil Taxation Act 1975; and in relation to a foreign oil concession, means the person with the concession or any person having an interest in it; “ oil ”— except in relation to a UK licence, means any petroleum (within the meaning of the Petroleum (Production) Act 1934); and in relation to such a licence, has the same meaning as in Part I of the Oil Taxation Act 1975; “ overseas petroleum ” means any oil that exists in its natural condition at a place to which neither the Petroleum (Production) Act 1934 nor the Petroleum (Production) Act (Northern Ireland) 1964 applies; and “ UK licence ” means a licence within the meaning of Part I of the Oil Taxation Act 1975. 5A References in sections 194 and 195 to a part disposal of a licence shall include references to the disposal of any interest in a licence. 4 Subsections (1) to (3) above shall have effect in relation to any disposal on or after 13th September 1995 and subsection (3) shall also have effect, and be deemed always to have had effect, for the construction of section 195 of the Taxation of Chargeable Gains Act 1992 in its application to disposals before that date. 5 Where enactments re-enacted in the Taxation of Chargeable Gains Act 1992 apply, instead of that Act, in the case of any disposal before 13th September 1995, this section shall have effect as if it required amendments equivalent to those made by subsection (3) above to have effect, and be deemed always to have had effect, for the construction of any enactment corresponding to section 195 of that Act. Controlled foreign companies. 182 Schedule 36 to this Act (which contains amendments of Chapter IV of Part XVII of the Taxes Act 1988) shall have effect in relation to accounting periods of a controlled foreign company, within the meaning of that Chapter, beginning on or after 28th November 1995. Part V Inheritance tax Rate bands. 183 1 For the Table in Schedule 1 to the Inheritance Tax Act 1984 there shall be substituted— Table of Rates of Tax Portion of value Rate of tax Lower limit Upper limit Per cent. £ £ 0 200,000 Nil 200,000 40 2 Subsection (1) above shall apply to any chargeable transfer made on or after 6th April 1996; and section 8 of that Act (indexation of rate bands) shall not have effect as respects any difference between the retail prices index for the month of September 1994 and that for the month of September 1995. Business property relief. 184 1 The Inheritance Tax Act 1984 shall be amended as follows. 2 In section 105(1) (relevant business property for the purposes of business property relief)— a in paragraph (b) (unquoted shares and securities attracting 100 per cent. relief where they gave the transferor control of a company)— i the words “ shares in or ” shall be omitted; and ii for the words “shares or securities owned by the transferor” there shall be substituted “ securities owned by the transferor and any unquoted shares so owned ” ; b for paragraph (bb) (unquoted shares attracting 100 per cent. relief in other cases) there shall be substituted the following paragraph— bb any unquoted shares in a company; and c paragraph (c) (unquoted shares attracting 50 per cent. relief) shall be omitted. 3 In section 107(4) (replacement of property with unquoted shares), for the words from the beginning to “such shares” there shall be substituted— 4 Without prejudice to subsection (1) above, where any shares falling within section 105(1)(bb) above which are . 4 In section 113A(3A)(b) (which contains a reference to shares and securities falling within paragraph (b) of section 105(1)), after “(b)” there shall be inserted “ or (bb) ” . 5 For the removal of any doubt, the following subsection shall be inserted in section 113A (provisions applying to business property relief where there is a transfer within seven years of death) after subsection (7)— 7A The provisions of this Chapter for the reduction of value transferred shall be disregarded in any determination for the purposes of this section of whether there is a potentially exempt or chargeable transfer in any case. 6 This section— a so far as it inserts a new subsection (7A) in section 113A, has effect in relation to any transfer of value on or after 28th November 1995; and b so far as it makes any other provision, has effect— i in relation to any transfer of value on or after 6th April 1996, and ii for the purposes of any charge to tax by reason of an event occurring on or after 6th April 1996, in relation to transfers of value before that date. Agricultural property relief. 185 1 Chapter II of Part V of the Inheritance Tax Act 1984 (agricultural property) shall be amended as follows. 2 In section 116 (relief for transfers of agricultural property) after subsection (5) there shall be inserted— 5A Where, in consequence of the death on or after 1st September 1995 of the tenant or, as the case may be, the last surviving tenant of any property, the tenancy— a becomes vested in a person, as a result of his being a person beneficially entitled under the deceased tenant’s will or other testamentary writing or on his intestacy, and b is or becomes binding on the landlord and that person as landlord and tenant respectively, subsection (2)(c) above shall have effect as if the tenancy so vested had been a tenancy beginning on the date of the death. 5B Where in consequence of the death on or after 1st September 1995 of the tenant or, as the case may be, the last surviving tenant of any property, a tenancy of the property or of any property comprising the whole or part of it— a is obtained by a person under or by virtue of an enactment, or b is granted to a person in circumstances such that he is already entitled under or by virtue of an enactment to obtain such a tenancy, but one which takes effect on a later date, or c is granted to a person who is or has become the only or only remaining applicant, or the only or only remaining person eligible to apply, under a particular enactment for such a tenancy in the particular case, subsection (2)(c) above shall have effect as if the tenancy so obtained or granted had been a tenancy beginning on the date of the death. 5C Subsection (5B) above does not apply in relation to property situate in Scotland. 5D If, in a case where the transferor dies on or after 1st September 1995,— a the tenant of any property has, before the death, given notice of intention to retire in favour of a new tenant, and b the tenant’s retirement in favour of the new tenant takes place after the death but not more than thirty months after the giving of the notice, subsection (2)(c) above shall have effect as if the tenancy granted or assigned to the new tenant had been a tenancy beginning immediately before the transfer of value which the transferor is treated by section 4(1) above as making immediately before his death. 5E In subsection (5D) above and this subsection— “ the new tenant ” means— the person or persons identified in a notice of intention to retire in favour of a new tenant as the person or persons who it is desired should become the tenant of the property to which that notice relates; or the survivor or survivors of the persons so identified, whether alone or with any other person or persons; “ notice of intention to retire in favour of a new tenant ” means, in the case of any property, a notice or other written intimation given to the landlord by the tenant, or (in the case of a joint tenancy or tenancy in common) all of the tenants, of the property indicating, in whatever terms, his or their wish that one or more persons identified in the notice or intimation should become the tenant of the property; “ the retiring tenant’s tenancy ” means the tenancy of the person or persons giving the notice of intention to retire in favour of a new tenant; “ the tenant’s retirement in favour of the new tenant ” means— the assignment, or (in Scotland) assignation, of the retiring tenant’s tenancy to the new tenant in circumstances such that the tenancy is or becomes binding on the landlord and the new tenant as landlord and tenant respectively; or the grant of a tenancy of the property which is the subject of the retiring tenant’s tenancy, or of any property comprising the whole or part of that property, to the new tenant and the acceptance of that tenancy by him; and, except in Scotland, “grant” and “acceptance” in paragraph (b) above respectively include the deemed grant, and the deemed acceptance, of a tenancy under or by virtue of any enactment. 3 In consequence of subsection (2) above, subsection (2A) of that section (which made, in relation to Scotland, provision which is superseded by the subsection (5A) inserted by subsection (2) above) shall cease to have effect. 4 For the removal of any doubt, the following subsection shall be inserted in section 124A (provisions applying to agricultural property relief where there is a transfer within seven years of death) after subsection (7)— 7A The provisions of this Chapter for the reduction of value transferred shall be disregarded in any determination for the purposes of this section of whether there is a potentially exempt or chargeable transfer in any case. 5 Subsection (2) above— a so far as relating to subsections (5A) to (5C) of section 116 of the Inheritance Tax Act 1984, has effect in any case where the death of the tenant or, as the case may be, the sole surviving tenant, occurs on or after 1st September 1995; and b so far as relating to subsections (5D) and (5E) of that section, has effect in any case where the death of the transferor occurs on or after 1st September 1995. 6 Subsection (3) above has effect in any case where the death of the tenant or, as the case may be, the sole surviving tenant, occurs on or after 1st September 1995. 7 Subsection (4) above has effect in relation to any transfer of value on or after 28th November 1995. Part VI Stamp Duty and Stamp Duty Reserve Tax Stamp duty Transfers of securities to members of electronic transfer systems etc. 186 1 Stamp duty shall not be chargeable on an instrument effecting a transfer of securities if the transferee is a member of an electronic transfer system and the instrument is in a form which will, in accordance with the rules of the system, ensure that the securities are changed from being held in certificated form to being held in uncertificated form so that title to them may become transferable by means of the system. 2 In this section— “ certificated form ” has the same meaning as in the relevant regulations; “ electronic transfer system ” means a system and procedures which, in accordance with the relevant regulations, enable title to securities to be evidenced and transferred without a written instrument; “ member ”, in relation to an electronic transfer system, means a person who is permitted by the operator of the system to transfer by means of the system title to securities held by him in uncertificated form; “ operator ” means a person approved by the Treasury under the relevant regulations as operator of an electronic transfer system; “ the relevant regulations ” means regulations under section 785 of the Companies Act 2006 (transfer without written instrument); “ securities ” means stock or marketable securities; “ uncertificated form ” has the same meaning as it has in the relevant regulations. 3 This section applies in relation to instruments executed on or after 1st July 1996. 4 This section shall be construed as one with the Stamp Act 1891. Stamp duty reserve tax Territorial scope of the tax. 187 1 In section 86 of the Finance Act 1986 (introduction) after subsection (3) there shall be added— 4 Stamp duty reserve tax shall be chargeable in accordance with the provisions of this Part of this Act— a whether the agreement, transfer, issue or appropriation in question is made or effected in the United Kingdom or elsewhere, and b whether or not any party is resident or situate in any part of the United Kingdom. 2 The amendment made by subsection (1) above shall have effect— a in relation to an agreement, if— i the agreement is conditional and the condition is satisfied on or after 1st July 1996; or ii the agreement is not conditional and is made on or after that date; and b in relation to a transfer, issue or appropriation made or effected on or after that date. Removal of the two month period. 188 1 In section 87 of the Finance Act 1986 (the principal charge) in subsection (2) (tax charged on the expiry of the period of two months beginning with the relevant day unless the first and second conditions are fulfilled before that period expires) the following shall be omitted— a the words “ the expiry of the period of two months beginning with ” , and b the words from “ unless ” to the end. 2 In section 88 of that Act (special cases) in subsection (1) (which provides for instruments on which stamp duty is not chargeable by virtue of certain enactments to be disregarded for the purposes of section 87(4) and (5)) before paragraph (a) there shall be inserted— aa section 65(1) of the Finance Act 1963 (renounceable letters of allotment etc), ab section 14(1) of the Finance Act (Northern Ireland) 1963 (renounceable letters of allotment etc.), . 3 Subsections (2) and (3) of that section (which are superseded by subsection (2) above) shall cease to have effect. 4 In section 92(1) of that Act (repayment or cancellation of tax where the conditions in section 87(4) and (5) are shown to have been fulfilled after the expiry of the period of two months beginning with the relevant day but before the expiry of six years so beginning)— a for “after the expiry of the period of two months (beginning with the relevant day, as defined in section 87(3))” there shall be substituted “ on or after the relevant day (as defined in section 87(3)) ” ; and b for “(so beginning)” there shall be substituted “ (beginning with that day) ” . 5 The amendments made by this section shall have effect in relation to an agreement to transfer securities if— a the agreement is conditional and the condition is satisfied on or after 1st July 1996; or b the agreement is not conditional and is made on or after that date. Transfers to members of electronic transfer systems etc. 189 1 In section 88 of the Finance Act 1986 (special cases) after subsection (1) there shall be inserted— 1A An instrument on which stamp duty is not chargeable by virtue of section 186 of the Finance Act 1996 (transfers of securities to members of electronic transfer systems etc) shall be disregarded in construing section 87(4) and (5) above unless— a the transfer is made by a stock exchange nominee; and b the maximum stamp duty chargeable on the instrument, apart from section 186 of the Finance Act 1996, would be 50p; and in this subsection “ stock exchange nominee ” means a person designated for the purposes of section 127 of the Finance Act 1976 as a nominee of The Stock Exchange by an order made by the Secretary of State under subsection (5) of that section. 2 This section has effect in relation to an agreement to transfer securities if an instrument is executed on or after 1st July 1996 in pursuance of the agreement. Transfers between associated bodies. 190 1 In section 88 of the Finance Act 1986 (special cases) after subsection (1A) there shall be inserted— 1B An instrument on which stamp duty is not chargeable by virtue of section 42 of the Finance Act 1930 or section 11 of the Finance Act (Northern Ireland) 1954 (transfer between associated bodies corporate) shall be disregarded in construing section 87(4) and (5) above in any case where— a the property mentioned in section 42(2)(a) of the Finance Act 1930 or, as the case may be, section 11(2)(a) of the Finance Act (Northern Ireland) 1954 consists of chargeable securities of any particular kind acquired in the period of two years ending with the day on which the instrument was executed; and b the body corporate from which the conveyance or transfer there mentioned is effected acquired the chargeable securities— i in a transaction which was given effect by an instrument of transfer on which stamp duty was not chargeable by virtue of section 81 above; ii in pursuance of an agreement to transfer securities as regards which section 87 above did not apply by virtue of section 89 below; or iii in circumstances with regard to which the charge to stamp duty or stamp duty reserve tax was treated as not arising by virtue of regulations under section 116 or 117 of the Finance Act 1991. 2 At the end of that section there shall be added— 4 For the purposes of subsection (1B) above, if the securities mentioned in paragraph (a) of that subsection cannot (apart from this subsection) be identified, securities shall be taken as follows, that is to say, securities of the same kind acquired later in the period of two years there mentioned (and not taken under this subsection for the purposes of any earlier instrument) shall be taken before securities acquired earlier in that period. 5 If, in a case where subsection (4) above applies, some, but not all, of the securities taken in accordance with that subsection were acquired as mentioned in paragraph (b) of subsection (1B) above by the body corporate mentioned in that paragraph, the stamp duty reserve tax chargeable under section 87 above by virtue of subsection (1B) above shall not exceed the tax that would have been so chargeable had the agreement to transfer the securities related only to such of the securities so taken as were so acquired. 6 Where a person enters into an agreement for securities to be transferred to him or his nominee, the securities shall be treated for the purposes of subsections (1B)(a) and (4) above as acquired by that person at the time when he enters into the agreement, unless the agreement is conditional, in which case they shall be taken to be acquired by him when the condition is satisfied. 3 This section has effect where the instrument on which stamp duty is not chargeable by virtue of section 42 of the Finance Act 1930 or section 11 of the Finance Act (Northern Ireland) 1954 is executed on or after 4th January 1996 in pursuance of an agreement to transfer securities made on or after that date. Stock lending and collateral security arrangements. 191 1 After section 89A of the Finance Act 1986 (exceptions from section 87 for public issues) there shall be inserted— Section 87: exceptions for stock lending and collateral security arrangements. 89B 1 Where a person (P) has contracted to sell chargeable securities of a particular kind in the ordinary course of his business as a market maker in chargeable securities of that kind and, to enable him to fulfil the contract, he enters into an arrangement under which— a another person (Q) is to transfer chargeable securities to P or his nominee, and b in return, chargeable securities of the same kind and amount are to be transferred (whether or not by P or his nominee) to Q or his nominee, section 87 above shall not apply as regards an agreement to transfer chargeable securities which is made for the purpose of performing the obligation to transfer chargeable securities described in paragraph (a) or (b) above. 2 Where the arrangement mentioned in subsection (1) above is also one under which— a an amount of chargeable securities of some other kind is to be transferred by P or his nominee to Q or his nominee by way of security for the performance of the obligation described in paragraph (b) of that subsection, and b on performance of that obligation, the securities mentioned in paragraph (a) above, or chargeable securities of the same kind and amount as those securities, are to be transferred to P or his nominee, section 87 above shall also not apply as regards an agreement to transfer chargeable securities which is made for the purpose of performing the obligation to transfer chargeable securities described in paragraph (a) or (b) above. 3 Where, to enable Q to make the transfer to P or his nominee which is mentioned in paragraph (a) of subsection (1) above, Q enters into an arrangement under which— a another person (R) is to transfer chargeable securities to Q or his nominee, and b in return, chargeable securities of the same kind and amount are to be transferred (whether or not by Q or his nominee) to R or his nominee, section 87 above shall not apply as regards an agreement to transfer chargeable securities which is made for the purpose of performing the obligation to transfer chargeable securities described in paragraph (a) or (b) above. 4 Where the arrangement mentioned in subsection (3) above is also one under which— a an amount of chargeable securities of some other kind is to be transferred by Q or his nominee to R or his nominee by way of security for the performance of the obligation described in paragraph (b) of that subsection, and b on performance of that obligation, the securities mentioned in paragraph (a) above, or chargeable securities of the same kind and amount as those securities, are to be transferred to Q or his nominee, section 87 above shall also not apply as regards an agreement to transfer chargeable securities which is made for the purpose of performing the obligation to transfer chargeable securities described in paragraph (a) or (b) above. 5 For the purposes of this section a person is a market maker in chargeable securities of a particular kind if he— a holds himself out at all normal times in compliance with the rules of The Stock Exchange as willing to buy and sell chargeable securities of that kind at a price specified by him, and b is recognised as doing so by The Stock Exchange. 6 The Treasury may by regulations provide that for subsection (5) above (as it has effect for the time being) there shall be substituted a subsection containing a different definition of a market maker for the purposes of this section. 7 Regulations under subsection (6) above shall apply in relation to any agreement to transfer chargeable securities in pursuance of an arrangement entered into on or after such day after 1st July 1996 as is specified in the regulations. 8 The power to make regulations under subsection (6) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons. 2 This section applies in relation to agreements to transfer chargeable securities in pursuance of an arrangement entered into on or after 1st July 1996. Repayment or cancellation of tax. 192 1 In consequence of section 188(1) above, subsections (4), (5) and (8) of section 87 of the Finance Act 1986 (exemption from stamp duty reserve tax where an instrument is executed etc) shall cease to have effect. 2 In section 88 of that Act (which provides for instruments on which stamp duty is not chargeable by virtue of certain enactments to be disregarded for the purposes of section 87(4) and (5)) in subsections (1), (1A) and (1B) for “section 87(4) and (5) above” there shall be substituted “ section 92(1A) and (1B) below ” . 3 In section 92 of that Act (repayment or cancellation of tax) in subsection (1) (which refers to the conditions in section 87(4) and (5))— a for “section 87(4) and (5)” there shall be substituted “ subsections (1A) and (1B) below ” ; and b for “the following provisions of this section shall apply” there shall be substituted “ subsections (2) to (4A) of this section shall apply ” . 4 After that subsection, there shall be inserted— 1A The first condition is that an instrument is (or instruments are) executed in pursuance of the agreement and the instrument transfers (or the instruments between them transfer) to B or, as the case may be, to his nominee all the chargeable securities to which the agreement relates. 1B The second condition is that the instrument (or each instrument) transferring the chargeable securities to which the agreement relates is duly stamped in accordance with the enactments relating to stamp duty if it is an instrument which, under those enactments, is chargeable with stamp duty or otherwise required to be stamped. 5 At the end of that section there shall be added— 6 In this section “ the enactments relating to stamp duty ” means the Stamp Act 1891 and any enactment which amends or is required to be construed together with that Act. 6 The amendments made by this section shall have effect in relation to an agreement to transfer securities if— a the agreement is conditional and the condition is satisfied on or after 1st July 1996; or b the agreement is not conditional and is made on or after that date. Depositary receipts. 193 1 Section 93 of the Finance Act 1986 (depositary receipts) shall be amended in accordance with the following provisions of this section. 2 In subsection (1) (charge to stamp duty reserve tax where certain things are done in pursuance of an arrangement) in paragraph (b) (transfer or issue to, or appropriation by, a person falling within subsection (3))— a after “transferred or issued to” there shall be inserted “ the person mentioned in paragraph (a) above or ” ; and b for “such a person” there shall be substituted “ the person mentioned in paragraph (a) above or a person falling within subsection (3) below ” . 3 In subsection (6) (payment by instalments) in paragraph (d) (instrument received by person falling within subsection (3)) for “subsection (3)” there shall be substituted “ subsection (2) or (3) ” . 4 This section has effect— a so far as relating to the charge to tax under section 93(1) of the Finance Act 1986, where securities are transferred, issued or appropriated on or after 1st July 1996 (whenever the arrangement was made); b so far as relating to the charge to tax under section 93(10) of that Act, in relation to instalments payable on or after 1st July 1996. Rates of charge expressed as percentages. 194 1 In section 87 of the Finance Act 1986, in subsection (6) (which specifies the rate at which stamp duty reserve tax under that section is charged) for “50p for every £100 or part of £100” there shall be substituted “ 0.5 per cent. ” 2 In section 93 of that Act (depositary receipts)— a in subsection (4) (rate of charge) for “£1.50 for every £100 or part of £100” there shall be substituted “ 1.5 per cent. ” ; b in subsection (5) (which applies subsection (4) with modifications in certain cases where the securities are transferred by a chargeable instrument) for the words from “as if “£1.50” read” onwards there shall be substituted “ as if “1.5 per cent.” read “1 per cent.” ” ; and c in subsection (10) (payment in instalments etc) in paragraph (b), for “£1.50 for every £100 or part of £100” there shall be substituted “ 1.5 per cent. of the amount ” . 3 Section 94(8) of that Act (which defines “the day of The Stock Exchange reforms” for the purposes of section 93(5) and which becomes unnecessary in consequence of the amendment made by subsection (2)(b) above) shall be omitted. 4 In section 96 of that Act (clearance services)— a in subsection (2) (rate of charge) for “£1.50 for every £100 or part of £100” there shall be substituted “ 1.5 per cent. ” ; b in subsection (3) (which applies subsection (2) with modifications in certain cases where the securities are transferred by a chargeable instrument) for the words from “as if “£1.50” read” onwards there shall be substituted “ as if “1.5 per cent.” read “1 per cent.” ” ; and c in subsection (8) (payment in instalments etc) in paragraph (b), for “£1.50 for every £100 or part of £100” there shall be substituted “ 1.5 per cent. of the amount ” . 5 Section 96(12) of that Act (which defines “the day of The Stock Exchange reforms” for the purposes of subsection (3) and which becomes unnecessary in consequence of the amendment made by subsection (4)(b) above) shall be omitted. 6 In section 99 of that Act (interpretation) after subsection (12) there shall be added— 13 Where the calculation of any tax in accordance with the provisions of this Part results in an amount which is not a multiple of one penny, the amount so calculated shall be rounded to the nearest penny, taking any½p as nearest to the next whole penny above. 7 Subsections (1) to (5) above have effect in accordance with the following provisions of this subsection, that is to say— a in relation to the charge to tax under section 87 of the Finance Act 1986, subsection (1) above applies where— i the agreement to transfer is conditional and the condition is satisfied on or after 1st July 1996; or ii the agreement is not conditional and is made on or after 1st July 1996; b in relation to the charge to tax under section 93(1) of that Act, paragraphs (a) and (b) of subsection (2) above apply where securities are transferred, issued or appropriated on or after 1st July 1996 (whenever the arrangement was made) and subsection (3) above has effect accordingly; c in relation to the charge to tax under section 93(10) of that Act, paragraph (c) of subsection (2) above applies in relation to instalments payable on or after 1st July 1996; d in relation to the charge to tax under section 96(1) of that Act, paragraphs (a) and (b) of subsection (4) above apply where securities are transferred or issued on or after 1st July 1996 (whenever the arrangement was made) and subsection (5) above has effect accordingly; e in relation to the charge to tax under section 96(8) of that Act, paragraph (c) of subsection (4) above applies in relation to instalments payable on or after 1st July 1996. Regulations concerning administration: sub-delegation to the Board. 195 In section 98 of the Finance Act 1986 (Treasury regulations with respect to administration etc) after subsection (1) there shall be inserted— 1A The power conferred on the Treasury by subsection (1) above includes power to make provision conferring or imposing on the Board functions which involve the exercise of a discretion. Clearance services Election by operator for alternative system of charge. 196 1 In section 70 of the Finance Act 1986 (clearance services) in subsection (1) (which, subject to subsection (9), makes provision with respect to stamp duty on transfers into clearance services) after “Subject to subsection (9)” there shall be inserted “ and section 97A ” . 2 In section 96 of that Act (clearance services) in subsection (1) (which, subject to subsection (5) and section 97, provides for stamp duty reserve tax to be chargeable on transfers into clearance services) for “section 97” there shall be substituted “ sections 97 and 97A ” . 3 After section 97 of that Act (exceptions) there shall be inserted— Clearance services: election for alternative system of charge. 97A 1 A person whose business is or includes the provision of clearance services for the purchase and sale of chargeable securities or relevant securities (an “operator”) may, with the approval of the Board, elect that stamp duty and stamp duty reserve tax shall be chargeable in accordance with this section in connection with those clearance services. 2 An election under subsection (1) above— a shall come into force on such date as may be notified to the operator by the Board in giving their approval; and b shall continue in force unless and until it is terminated in accordance with the following provisions of this section. 3 If and so long as an election under subsection (1) above is in force, stamp duty or stamp duty reserve tax (as the case may require) shall, in connection with the clearance services to which the election relates, be chargeable in relation to— a a transfer or issue falling within section 70(1) or 96(1) above, b an agreement falling within section 90(4) above by virtue of section 96(1) above, or c an agreement falling within section 90(5) above, as it would be chargeable apart from sections 70, 90(4) and (5) and 96 above. 4 Where stamp duty or stamp duty reserve tax is chargeable by virtue of subsection (3) above in relation to a transfer, issue or agreement, sections 70, 90(4) and (5) and 96 above shall not have effect in relation to that transfer, issue or agreement. 5 Nothing in subsection (3) or (4) above affects the application of section 70 or 96 above in relation to a transfer falling within section 70(1) or 96(1) above by the operator or his nominee to, or to a nominee of, another operator in relation to whom no election under subsection (1) above is for the time being in force. 6 The Board may require the operator, as a condition of the approval of his election under subsection (1) above, to make and maintain such arrangements as they may consider satisfactory— a for the collection of stamp duty reserve tax chargeable in accordance with this section, and b for complying, or securing compliance, with the provisions of this Part and of regulations under section 98 below, so far as relating to such tax. 7 Where the operator is not resident in the United Kingdom and has no branch or agency in the United Kingdom, the Board may require him, as a condition of the approval of his election under subsection (1) above, to appoint and, so long as the election remains in force, maintain a tax representative. 8 A person shall not be an operator’s tax representative under this section unless that person— a has a business establishment in the United Kingdom, and b is approved by the Board. 9 A person who is at any time an operator’s tax representative under this section— a shall be entitled to act on the operator’s behalf for the purposes of stamp duty and stamp duty reserve tax in connection with the clearance services to which the operator’s election under subsection (1) above relates, b shall secure (where appropriate by acting on the operator’s behalf) the operator’s compliance with and discharge of the obligations and liabilities to which the operator is subject, in connection with the clearance services to which the operator’s election under subsection (1) above relates, by virtue of legislation relating to stamp duty or stamp duty reserve tax (including obligations and liabilities arising before he became the operator’s tax representative), and c shall be personally liable in respect of any failure to secure the operator’s compliance with or discharge of any such obligation or liability, and in respect of anything done for purposes connected with acting on the operator’s behalf, as if the obligations and liabilities imposed on the operator were imposed jointly and severally on the tax representative and the operator. 10 An election under subsection (1) above may be terminated— a by not less than thirty days’ notice given by the operator to the Board or by the Board to the operator; or b if there is or has been a breach of a condition of the approval of the election imposed by virtue of subsection (6) or (7) above, by a notice— i given by the Board to the operator, ii taking effect on the giving of the notice or at such later time as may be specified in the notice, and iii stating that it is given by reason of the breach of condition. 11 Where an election under subsection (1) above is terminated, section 96 above shall have effect as if chargeable securities of the same amounts and kinds as are, immediately before the termination, held by the operator or his nominee in connection with the provision of the clearance services, had, immediately after the termination, been transferred to the operator or, as the case may be, to the nominee by a transfer falling within subsection (1) of that section. 12 In this section “ relevant securities ” has the same meaning as in section 70 above. 4 Section 97(2) of that Act (no charge to tax under section 96 on transfers to a stock exchange nominee or to, or to a nominee of, a recognised investment exchange or recognised clearing house) shall not have effect in relation to any transfer effected on or after 1st July 1996. 5 In section 99(10) of that Act (interpretation of “chargeable securities” in sections 93, 94 and 96) for “and 96” there shall be substituted “ , 96 and 97A ” . 6 Subsections (1), (2), (3) and (5) above shall come into force on 1st July 1996. Part VII Miscellaneous and supplemental Miscellaneous: indirect taxation Setting of rates of interest. 197 1 The rate of interest applicable for the purposes of an enactment to which this section applies shall be the rate which for the purposes of that enactment is provided for by regulations made by the Treasury under this section. 2 This section applies to— a paragraphs 7 and 8(1) of Schedule 6 to the Finance Act 1994 (interest payable to the Commissioners of Customs and Excise in connection with air passenger duty); b sections 60(6), (7) and (8) of and paragraphs 21 and 22 of Schedule 7 to that Act (interest on amounts of insurance premium tax and on amounts payable by the Commissioners in respect of that tax); c sections 74, 78 and 85A(2) and (3) of the Value Added Tax Act 1994 (interest on VAT recovered or recoverable by assessment and interest payable in cases of official error); . . . d sections 56(3) to (5) of and paragraphs 26 and 29 of Schedule 5 to this Act (interest payable to or by the Commissioners in connection with landfill tax)and e paragraph 17 of Schedule 5 to the Finance Act 1997 (interest on amounts repayable in respect of overpayments by the Commissioners in connection with excise duties, insurance premium tax and landfill tax). f sections 126 and 127 of the Finance Act 1999 (interest on overdue customs duty and on repayments of amounts paid by way of customs duty). g the following provisions of Schedule 6 to the Finance Act 2000 (interest payable to or by the Commissioners in connection with climate change levy), that is to say, paragraphs 41(2)(f), 62(3)(f), 66, 70(1)(b) , 81(3) and 123(4) to (6) . h the following provisions of the Finance Act 2001 (interest payable to or by the Commissioners in connection with aggregates levy), that is to say— i sections 25(2)(f) , 30(3)(f) and 42(4) to (6) ; ii paragraphs 6 and 8(3)(a) of Schedule 5; and iii paragraphs 2 and 6(1)(b) of Schedule 8. i Parts 2 and 3 of Schedule 3 to the Finance Act 2001 (interest payable on repayments etc. ). 3 Regulations under this section may— a make different provision for different enactments or for different purposes of the same enactment, b either themselves specify a rate of interest for the purposes of an enactment or make provision for any such rate to be determined, and to change from time to time, by reference to such rate or the average of such rates as may be referred to in the regulations, c provide for rates to be reduced below, or increased above, what they otherwise would be by specified amounts or by reference to specified formulae, d provide for rates arrived at by reference to averages or formulae to be rounded up or down, e provide for circumstances in which changes of rates of interest are or are not to take place, and f provide that changes of rates are to have effect for periods beginning on or after a day determined in accordance with the regulations in relation to interest running from before that day, as well as in relation to interest running from, or from after, that day. 4 The power to make regulations under this section shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons. 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 The words “ the rate applicable under section 197 of the Finance Act 1996 ” shall be substituted— a for the words “the specified rate” in each of paragraphs 7(1) and (3) and 9(1) of Schedule 6 to the Finance Act 1994 (air passenger duty); b for the words “the prescribed rate” in each of sub-paragraphs (1) and (3) of paragraph 21 of Schedule 7 to that Act (insurance premium tax); c for the words from “such rate” onwards in sub-paragraph (2) of paragraph 22 of that Schedule; and d in the Value Added Tax Act 1994— i for the words “the prescribed rate” in each of subsections (1), (2) and (4) of section 74, and ii for the words from “such rates” onwards in subsection (3) of section 78. 7 Subsections (1) and (6) above shall have effect for periods beginning on or after such day as the Treasury may by order made by statutory instrument appoint and shall have effect in relation to interest running from before that day, as well as in relation to interest running from, or from after, that day; and different days may be appointed under this subsection for different purposes. Miscellaneous: direct taxation Banks. 198 Schedule 37 to this Act (which re-defines “bank” for certain purposes, and makes related amendments) shall have effect. Quotation or listing of securities. 199 Schedule 38 to this Act (which contains amendments of enactments referring to the quotation or listing of securities) shall have effect. Domicile for tax purposes of overseas electors. 200 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Enactment of Inland Revenue concessions. 201 Schedule 39 to this Act has effect for the purpose of enacting certain extra-statutory concessions relating to income tax, corporation tax, capital gains tax, and stamp duty. Miscellaneous: other matters Gilt stripping. 202 1 In section 47 of the Finance Act 1942 (Treasury regulations with respect to the transfer and registration of Government stock), after paragraph (bb) of subsection (1) there shall be inserted the following paragraphs— bc for the exchange of any such stock and bonds (whenever issued) for strips thereof; bd for exchanges by which such strips (whether deriving from the same security or from different securities) are consolidated into a single security of a description so specified; . 2 After subsection (1A) of that section (transfer of deceased persons’ stocks and bonds) there shall be inserted the following subsections— 1B In this section “ strip ”, in relation to any stock or bond, means a security issued under the National Loans Act 1968 which— a is issued for the purpose of representing the right to, or of securing— i a payment corresponding to a payment of interest or principal remaining to be made under the stock or bond, or ii two or more payments each corresponding to a different payment remaining to be so made; b is issued in conjunction with the issue of one or more other securities which, together with that security, represent the right to, or secure, payments corresponding to every payment remaining to be made under the stock or bond; and c is not itself a security that represents the right to, or secures, payments corresponding to a part of every payment so remaining. 1C For the purposes of subsection (1B) of this section, where the balance has been struck for a dividend on any stock or bond, any payment to be made in respect of that dividend shall, at times falling after that balance has been struck, be treated as not being a payment remaining to be made under the stock or bond. 1D Without prejudice to the generality of the powers conferred by the preceding provisions of this section (but subject to subsection (1E) of this section), regulations made by virtue of paragraph (bc) or (bd) of subsection (1) of this section may— a provide, for the purpose of authorising the making of exchanges, for any stock or bonds to be treated as issued on such terms as may be specified in the regulations; b contain such provision as the Treasury think fit about the circumstances in which and the conditions subject to which exchanges may be effected; and c contain any such provision as could be contained in rules made under section 14(3) of the National Loans Act 1968 (Treasury rules as to exchange of securities). 1E Regulations made by virtue of subsection (1)(bc) or (bd) of this section shall not make provision for the exchange of any stock or bonds, or of any strips, in any cases other than those where the exchange is at the request of the holder or in accordance with an order made by a court. 1F Regulations under this section may make different provision for different cases and contain such exceptions and exclusions as the Treasury think fit; and the powers of the Treasury to make regulations under this section are without prejudice to any of their powers under the National Loans Act 1968. 3 After section 2 of the National Debt (Stockholders Relief) Act 1892 (date for striking balance for a dividend on stock) there shall be inserted the following section— Payment of dividend on stock stripped after balance struck. 2A 1 Where— a any stock is exchanged for strips of that stock, and b that exchange takes place after the balance has been struck for a dividend on that stock but before the day on which that dividend is payable, any person who would have been entitled to that dividend but for the exchange shall remain entitled to that dividend notwithstanding the exchange. 2 The Treasury may by order made by statutory instrument provide that for the purposes of this section and section 47(1C) of the Finance Act 1942, the balance for any dividend on any stock is to be deemed to be struck at a time which, by such a period as is specified in the order, precedes the time when the balance is actually struck. 3 A period specified in an order under subsection (2) above shall not exceed 7 days; and an order made under that subsection may make different provision for different cases. 4 In this section “ strip ”, in relation to any stock, has the meaning given by section 47 of the Finance Act 1942. 4 In section 16 of the National Loans Act 1968 (supplemental provisions as to national debt), after subsection (4) there shall be inserted the following subsection— 4A In subsections (3) and (4) above the references to stock or registered bonds issued under this Act include references to a strip (within the meaning of section 47 of the Finance Act 1942) of any stock or bond (whether the stock or bond is issued under this Act or otherwise). 5 The Treasury may by regulations make provision for securing that enactments and subordinate legislation which— a apply in relation to government securities or to any description of such securities, or b for any other purpose refer (in whatever terms) to such securities or to any description of them, have effect with such modifications as the Treasury may think appropriate in consequence of the making of any provision or arrangements for, or in connection with, the issue or transfer of strips of government securities or the consolidation of such strips into other securities. 6 Regulations under subsection (5) above may— a impose a charge to income tax, corporation tax, capital gains tax, inheritance tax, stamp duty or stamp duty reserve tax; b include provision applying generally to, or to any description of, enactments or subordinate legislation; c make different provision for different cases; and d contain such incidental, supplemental, consequential and transitional provision as the Treasury think appropriate. 7 The power to make regulations under subsection (5) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons. 8 Schedule 40 to this Act (which makes provision in relation to strips for taxation purposes) shall have effect. 9 The enactments that may be modified by regulations under this section shall include section 95 above and the enactments contained in Schedule 40 to this Act. 10 In this section— “ government securities ” means any securities included in Part I of Schedule 11 to the Finance Act 1942; “ modifications ” includes amendments, additions and omissions; and “ subordinate legislation ” has the same meaning as in the Interpretation Act 1978; and expressions used in this section and in section 47 of the Finance Act 1942 have the same meanings in this section as in that section. Modification of the Agriculture Act 1993. 203 1 Part I of Schedule 2 to the Agriculture Act 1993 (taxation provisions applying to the reorganisation of the milk marketing boards) shall have effect, and be deemed always to have had effect, in accordance with subsections (2) to (4) below where— a any approved scheme has made provision as to the functions of a milk marketing board in the period after the transfers taking effect on the vesting day under section 11 of that Act; b regulations have been made by virtue of section 14(2) of that Act (provision following re-organisation) for giving effect to that provision; and c a transaction is or has been entered into by that board in pursuance of any obligation under those regulations to carry out those functions so far as they relate to a subsidiary of the board. 2 For the purposes of that Part of that Schedule— a anything done by way of entering into the transaction, or for the purpose of carrying it out, shall be deemed to have been done under and in accordance with the scheme; and b the terms and other provisions having effect in relation to that transaction by virtue of anything contained in, or anything done in exercise of powers conferred by, any regulations under section 14(2) of the Agriculture Act 1993 shall be deemed to be terms for which the scheme provided or, as the case may be, to be provisions of the scheme. 3 Sub-paragraph (1) of paragraph 16 of Schedule 2 to the Agriculture Act 1993 (distributions) shall have effect, and be deemed always to have had effect, in a case where the terms and provisions mentioned in subsection (2)(b) above involved or involve— a the issue or transfer of any shares in, or securities of, any body, b the conferring of any right to a distribution out of the assets of any body, c the conferring of any right to, or to acquire, shares in any body, or d the transfer to any person of any property or rights of a milk marketing board, or of the subsidiary of such a board, as if the references to the vesting day in paragraphs (a), (c), (d) and (e) of that sub-paragraph were references to the day on which the winding up of the board is completed. 4 Sub-paragraph (4) of paragraph 31 of Schedule 2 to the Agriculture Act 1993 (condition to be satisfied if body to be qualifying body by virtue of sub-paragraph (1)(c)) shall have effect, and be deemed always to have had effect, as if— a the reference, in relation to a company, to 90 per cent. of its ordinary share capital were a reference to 70 per cent. of its ordinary share capital; and b the references to shares having been issued to any person included references to their having been allotted to that person. 5 Paragraph 1 of Schedule 2 to the Agriculture Act 1993 (tax continuity with successor bodies) shall have effect, and be deemed to have had effect, in relation to any relevant transfer after 31st December 1995 to a society registered under the Industrial and Provident Societies Act 1965 of— a a trade, or part of a trade, of a milk marketing board, or b any property, rights or liabilities of such a board, as it has effect in relation to any transfer under section 11 of that Act to a qualifying body. 6 Paragraphs 16, 20, 25, 26, 28 and 29 of Schedule 2 to the Agriculture Act 1993 shall have effect, and be deemed to have had effect, in relation to any relevant transfer after 31st December 1995 of assets of a milk marketing board to a society registered under the Industrial and Provident Societies Act 1965 as if— a the terms and other provisions of the transaction for effecting the transfer were contained in an approved scheme; b the society were a relevant successor of that board; and c references in those paragraphs to the vesting day were references to the day on which the winding up of the board is completed. 7 For the purposes of subsections (5) and (6) above, a transfer of anything to a society registered under the Industrial and Provident Societies Act 1965 is a relevant transfer if— a it is a transfer in pursuance of regulations made by virtue of section 14(2) of the Agriculture Act 1993; b it is not a transfer of shares in a subsidiary of a milk marketing board; and c the condition mentioned in sub-paragraph (5) of paragraph 31 of Schedule 2 to that Act would have been met in relation to that society if the provision made as to the persons to whom the membership of the society is open were contained in an approved scheme providing for the transfer. 8 Paragraph 20 of Schedule 2 to the Agriculture Act 1993 (treatment of acquisition of certain shares and securities) shall not apply, and shall be deemed never to have applied, in relation to the acquisition of any security after 31st December 1995 if the indebtedness acknowledged by that security does not fall, for the purposes of the Taxation of Chargeable Gains Act 1992, to be treated as a debt on a security (as defined in section 132 of that Act of 1992). 9 For the purposes of Part 5 of the Corporation Tax Act 2009 (loan relationships) , so far as it has effect for any accounting period ending after 31st March 1996 in relation to any creditor relationship represented by a debenture issued on or after 31st December 1995, paragraph 25 of Schedule 2 to the Agriculture Act 1993 shall have effect as if sub-paragraph (2)(a) of that paragraph (deemed consideration for issue of debenture issued under approved scheme) were omitted. 10 For the purposes of the Taxation of Chargeable Gains Act 1992, where any debenture to which paragraph 25 of Schedule 2 to the Agriculture Act 1993 applies has been or is issued at any time after 31st December 1995, the indebtedness acknowledged by that debenture shall be deemed (where that would not otherwise be the case) to be, and always to have been, a debt on a security (as defined in section 132 of that Act of 1992). 11 Expressions used in this section and in Part I of the Agriculture Act 1993 have the same meanings in this section as in that Part. Supplemental Interpretation. 204 In this Act “ the Taxes Act 1988 ” means the Income and Corporation Taxes Act 1988. Repeals. 205 1 The enactments mentioned in Schedule 41 to this Act (which include spent provisions) are hereby repealed to the extent specified in the third column of that Schedule. 2 The repeals specified in that Schedule have effect subject to the commencement provisions and savings contained in, or referred to, in the notes set out in that Schedule. Short title. 206 This Act may be cited as the Finance Act 1996.