Finance Act 1998 Part I Excise Duties Alcoholic liquor duties Rate of duty on beer. 1 1 In section 36(1) of the Alcoholic Liquor Duties Act 1979 (rate of duty on beer), for “£11.14" there shall be substituted “ £11.50 ” . 2 This section shall come into force on 1st January 1999. Adjustment of rates of duty on sparkling liquors. 2 1 The Alcoholic Liquor Duties Act 1979 shall be amended as follows. 2 In Part I of the Table of rates of duty in Schedule 1, in column 2 of the fourth entry (rate of duty per hectolitre on sparkling wine or made-wine of a strength exceeding 5.5 per cent. but less than 8.5 per cent.), for “201.50" there shall be substituted “ 161.20 ” . 3 In section 62(1A)(a) (rate of duty per hectolitre on sparkling cider of a strength exceeding 5.5 per cent.), for “£37.54" there shall be substituted “ £45.05 ” . 4 This section shall be deemed to have come into force at 6 o’clock in the evening of 17th March 1998. Rates of duty on wine and made-wine. 3 1 For Part I of the Table of rates of duty in Schedule 1 to the Alcoholic Liquor Duties Act 1979 (wine and made-wine of a strength not exceeding 22 per cent.) there shall be substituted— Part I Wine or made-wine of a strength not exceeding 22 per cent. Description of wine or made-wine Rates of duty per hectolitre £ Wine or made-wine of a strength not exceeding 4 per cent. 46.01 Wine or made-wine of a strength exceeding 4 per cent. but not exceeding 5.5 per cent. 63.26 Wine or made-wine of a strength exceeding 5.5 per cent. but not exceeding 15 per cent. and not being sparkling 149.28 Sparkling wine or sparkling made-wine of a strength exceeding 5.5 per cent. but less than 8.5 per cent. 161.20 Sparkling wine or sparkling made-wine of a strength of 8.5 per cent. or of a strength exceeding 8.5 per cent. but not exceeding 15 per cent. 213.27 Wine or made-wine of a strength exceeding 15 per cent. but not exceeding 22 per cent. 199.03 2 This section shall come into force on 1st January 1999. Rates of duty on cider. 4 1 In section 62(1A) of the Alcoholic Liquor Duties Act 1979 (rates of duty on cider), for paragraphs (b) and (c) there shall be substituted the following paragraphs— b £37.92 per hectolitre in the case of cider of a strength exceeding 7.5 per cent. which is not sparkling cider; and c £25.27 per hectolitre in any other case. 2 This section shall come into force on 1st January 1999. Drawback of excise duty on beer. 5 1 Section 42 of the Alcoholic Liquor Duties Act 1979 (drawback on exportation, shipment as stores etc. ) shall cease to have effect. 2 Subsection (1) above shall come into force on such day as the Commissioners of Customs and Excise may by order made by statutory instrument appoint. Hydrocarbon oil duties Charge on production without delivery. 6 1 In section 6 of the Hydrocarbon Oil Duties Act 1979 (excise duty on imported hydrocarbon oil and on oil produced and delivered for home use), in subsection (1)— a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b the words from “and delivered" to “above" shall be omitted. 2 For subsection (2) of that section there shall be substituted the following subsections— 2 Where— a imported hydrocarbon oil is removed to relevant premises, b the oil undergoes a production process at those premises or any other relevant premises, and c any duty charged on the importation of the oil has not become payable at any time before the production time, the duty charged on importation shall not become payable at any time after the production time. 2AA In subsection (2) above— “ the production time ” means the time at which the oil undergoes the production process; and “ relevant premises ” means— a refinery; other premises used for the production of hydrocarbon oil; or premises of such other description as may be specified in regulations made by the Commissioners. 2AB For the purposes of subsection (2) above, oil undergoes a production process if— a hydrocarbon oil of another description is obtained from it, or b it is subjected to any process of purification or blending. 3 The preceding provisions of this section shall come into force on such day as the Commissioners of Customs and Excise may by order made by statutory instrument appoint. Rates of duties and rebates. 7 1 In section 6(1A) of the Hydrocarbon Oil Duties Act 1979 (rates of duty on hydrocarbon oil)— a in paragraph (a) (light oil), for “£0.4510" there shall be substituted “ £0.4926 ” ; b in paragraph (b) (ultra low sulphur diesel), for “£0.3928" there shall be substituted “ £0.4299 ” ; and c in paragraph (c) (heavy oil that is not ultra low sulphur diesel), for “£0.4028" there shall be substituted “ £0.4499 ” . 2 In section 11(1) of that Act (rebate on heavy oil)— a in paragraph (a) (fuel oil), for “£0.0200" there shall be substituted “ £0.0218 ” ; and b in each of paragraphs (b) and (ba) (gas oil which is not ultra low sulphur diesel and ultra low sulphur diesel), for “£0.0258" there shall be substituted “ £0.0282 ” . 3 In section 13A(1A) of that Act (rebate on unleaded petrol)— a in paragraph (a) (higher octane unleaded petrol), for “£0.0150" there shall be substituted “ £0.0050 ” ; and b in paragraph (b) (other unleaded petrol), for “£0.0482" there shall be substituted “ £0.0527 ” . 4 In section 14(1) of that Act (rebate on light oil for use as furnace fuel), for “£0.0200" there shall be substituted “ £0.0218 ” . 5 This section shall be deemed to have come into force at 6 o’clock in the evening of 17th March 1998. Ultra low sulphur diesel. 8 1 In section 1 of the Hydrocarbon Oil Duties Act 1979, for subsection (6) (meaning of “ultra low sulphur diesel") there shall be substituted the following subsection— 6 “ Ultra low sulphur diesel ” means gas oil— a the sulphur content of which does not exceed 0.005 per cent. by weight or is nil; b the density of which does not exceed 835 kilograms per cubic metre at a temperature of 15° C; and c of which not less than 95 per cent. by volume distils at a temperature not exceeding 345° C. 2 This section shall be deemed to have come into force at 6 o’clock in the evening of 17th March 1998. Mixtures of heavy oils. 9 1 In section 20AAA of the Hydrocarbon Oil Duties Act 1979 (charge to duty on mixtures of oils), after subsection (2) there shall be inserted the following subsection— 2A Where— a a mixture of heavy oils is produced in contravention of Part IIA 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 In subsection (3) of that section, after “subsection (1)" there shall be inserted “ or (2A) ” . 3 In section 20AAB of that Act (supplementary provisions about mixing of oils), in subsection (1), after “section 20AAA(1)" there shall be inserted “ or (2A) ” . 4 In Schedule 2A to that Act (mixtures of oils to which duty applies), after paragraph 7 there shall be inserted the following— Part IIA Unrebated heavy oil 7A A mixture of heavy oils is produced in contravention of this paragraph if such a mixture is produced by mixing— a ultra low sulphur diesel in respect of which, on its delivery for home use, a declaration was made that it was intended for use as fuel for a road vehicle; and b heavy oil of any other description in respect of which, on its delivery for home use, such a declaration was made. 5 In paragraph 9 of that Schedule (rate of duty for mixtures of heavy oil), after sub-paragraph (1) there shall be inserted the following sub-paragraph— 1A Subject to paragraph 10 below, duty charged under subsection (2A) of section 20AAA of this Act shall be charged at the rate for heavy oil in force at the time when the mixture is produced. 6 This section shall be deemed to have come into force at 6 o’clock in the evening of 17th March 1998. Tobacco products duty Rates of tobacco products duty. 10 1 For the Table of rates of duty in Schedule 1 to the Tobacco Products Duty Act 1979 there shall be substituted— TABLE 1. Cigarettes An amount equal to 22 per cent. of the retail price plus £77.09 per thousand cigarettes. 2. Cigars £114.79 per kilogram. 3. Hand-rolling tobacco £87.74 per kilogram. 4. Other smoking tobacco and chewing tobacco £50.47 per kilogram. 2 This section shall come into force on 1st December 1998. Gaming duty Rates of gaming duty. 11 1 For the Table in section 11(2) of the Finance Act 1997 (rates of gaming duty) there shall be substituted the following table— Table Part of gross gaming yield Rate The first £450,000 2½ per cent. The next £1,000,000 12½ per cent. The next £1,000,000 20 per cent. The next £1,750,000 30 per cent. The remainder 40 per cent. 2 In section 11(3) of that Act (rate of duty for unregistered gaming), for “ 131/3per cent." there shall be substituted “ 40 per cent. ” 3 This section has effect in relation to accounting periods beginning on or after 1st April 1998. Amusement machine licence duty Rates of amusement machine licence duty. 12 1 In section 23 of the Betting and Gaming Duties Act 1981 (rates of amusement machine licence duty), for the Table in subsection (2) there shall be substituted the following Table— TABLE (1) (2) (3) (4) Period (in months) for which licence granted Machines that are not gaming machines Gaming machines that are small-prize machines or are five-penny machines without being small-prize machines Other machines £ £ £ 1 30 80 220 2 50 150 425 3 75 220 615 4 95 285 800 5 120 345 970 6 140 400 1,125 7 160 450 1,270 8 185 500 1,405 9 205 540 1,525 10 225 580 1,635 11 240 615 1,730 12 250 645 1,815 2 This section shall apply in relation to any amusement machine licence for which an application is received by the Commissioners of Customs and Excise after 17th March 1998. Further exception for thirty-five-penny machines. 13 1 In section 21(3A) of the Betting and Gaming Duties Act 1981 (excepted machines), for paragraphs (b) and (c) there shall be substituted the following paragraphs— b a five-penny machine which is a small prize machine; or c a thirty-five-penny machine which is not a prize machine or which, if it is a prize machine, is not a gaming machine. 2 This section has effect in relation to the provision of an amusement machine at any time on or after 1st April 1998. Video machines. 14 1 In section 21(3A) of the Betting and Gaming Duties Act 1981 (excepted machines), after paragraph (c) there shall be inserted ; or d an excepted video machine. 2 After subsection (3A) of that section there shall be inserted the following subsections— 3B For the purposes of this section an amusement machine is an excepted video machine if— a it is a video machine which is not a prize machine; b it is a machine on which a game can be played solo; c the price for a solo game on the machine does not exceed 35p; and d the price to participate in a game on the machine for two or more players does not exceed 50p. 3C For the purposes of this section the price for a solo game on a machine does not exceed 35p if the denomination or aggregate denomination of the coin or coins that must be inserted into the machine to play the game solo does not or, where the machine provides differing numbers of games in different circumstances, cannot exceed 35p for each time the game is played. 3D For the purposes of this section the price to participate in a game on the machine for two or more players does not exceed 50p if the denomination or aggregate denomination of the coin or coins that must be inserted into the machine to play the game simultaneously with more than one player does not exceed or, where the machine provides differing numbers of games in different circumstances, cannot exceed 50p per player for each time the game is played. 3E For the purposes of this section a game is played solo if it is played by one person at a time (whether or not against a previous player). 3 Accordingly, in section 25 of that Act— a in subsection (4) (no account to be taken of the fact that a machine may be played by more than one person at a time), after “description" there shall be inserted “ other than an excepted video machine falling within section 21(3A)(d) above ” ; and b in subsection (6) (excepted machine not to be treated as a number of machines), for the words “in the case of any machine" onwards there shall be substituted “ for the purpose of determining whether a machine is an excepted video machine falling within section 21(3A)(d) above, or in the case of a pinball machine or a machine that is an excepted machine ” . 4 This section has effect in relation to the provision of an amusement machine at any time on or after the day on which this Act is passed. Air passenger duty Fiscal representatives. 15 1 After section 34 of the Finance Act 1994 (fiscal representatives) there shall be inserted the following section— Administrative representatives. 34A 1 Subject to the following provisions of this section, where— a the appointment of any person to be the fiscal representative of an aircraft operator contains a statement that the appointment is made for administrative purposes only, b the operator has complied with any obligations for the provision of security imposed, in relation to appointments containing such statements, by any general directions given by the Commissioners, and c the operator is not for the time being in contravention of any requirement to provide any security that he is required to provide under section 36 below, that appointment shall have effect in accordance with subsection (2) below. 2 Where the appointment of any person as a fiscal representative has effect in accordance with this subsection section 34(4)(b) and (c) above shall be taken, in the case of that person— a not to impose any requirement on the representative to secure the payment of amounts of duty which are or may become due from his principal, and b not to make him personally liable either to pay any such amounts or in respect of any failure by his principal to pay them. 3 The security that may be required by general directions given by the Commissioners for the purposes of this section is any such security for the payment of amounts of duty which are or may become due from the person providing the security as may be determined in accordance with the directions. 4 The power of the Commissioners under section 36 below to require the provision of security shall not include any power to require a fiscal representative of an aircraft operator whose appointment has effect in accordance with subsection (2) above to provide any security for the payment of amounts of duty which are or may become due from his principal. 5 In this section references to an amount of duty include references to any penalty or interest that is recoverable as if it were an amount of duty, but only in so far as the penalty or interest is in respect of a failure by an aircraft operator to pay an amount of duty, or to pay such an amount before a certain time. 2 In section 34(4) of that Act (effect of appointment of fiscal representative), after “subsection (5)" there shall be inserted “ and section 34A ” . Vehicle excise duty Rates of duty where pollution reduced. 16 Schedule 1 to this Act (which makes provision for reduced rates of vehicle excise duty to be applicable to certain vehicles adapted so as to reduce pollution) shall have effect. Restriction of exemption for old vehicles. 17 In paragraph 1A(1) of Schedule 2 to the Vehicle Excise and Registration Act 1994 (exemption for vehicles more than 25 years old), for the words “more than 25 years before the beginning of the year in which that time falls" there shall be substituted “ before 1st January 1973. ” Regulations relating to nil licences. 18 In section 22(2A) of the Vehicle Excise and Registration Act 1994 (provisions that may be made about nil licences), after paragraph (b) there shall be inserted the following paragraphs— c make provision (including provision requiring the payment of a fee) for cases where a nil licence is or may be lost, stolen, destroyed or damaged or contains particulars which have become illegible or inaccurate, d require a person issued with a nil licence which ceases to be in force in circumstances prescribed by the regulations to furnish to the Secretary of State such particulars and make such declarations as may be so prescribed, and to do so at such times and in such manner as may be so prescribed. Failure to pay amount required in respect of void licence. 19 1 In subsection (1) of section 35A of the Vehicle Excise and Registration Act 1994 (offence of failing to return void licence)— a in paragraph (a), for the words from “requires" to “the notice" there shall be substituted “ contains a relevant requirement ” ; and b in paragraph (b), for “within that period" there shall be substituted “ contained in the notice ” . 2 After subsection (2) of that section there shall be inserted the following subsections— 3 For the purposes of subsection (1)(a), a relevant requirement is— a a requirement to deliver up the licence within such reasonable period as is specified in the notice; or b a requirement to deliver up the licence within such reasonable period as is so specified and, on doing so, to pay the amount specified in subsection (4). 4 The amount referred to in subsection (3)(b) is an amount equal to one-twelfth of the appropriate annual rate of vehicle excise duty for each month, or part of a month, in the relevant period. 5 The reference in subsection (4) to the appropriate annual rate of vehicle excise duty is a reference to the annual rate which at the beginning of the relevant period— a in the case of a vehicle licence, was applicable to a vehicle of the description specified in the application, or b in the case of a trade licence, was applicable to a vehicle falling within paragraph 1 of Schedule 1 (or to a vehicle falling within sub-paragraph (1)(c) of paragraph 2 of that Schedule if the licence was to be used only for vehicles to which that paragraph applies). 6 For the purposes of subsection (4) the relevant period is the period— a beginning with the first day of the period for which the licence was applied for or, if later, the day on which the licence first was to have effect, and b ending with whichever is the earliest of the times specified in subsection (7). 7 In a case where the requirement is a requirement to deliver up a vehicle licence, those times are— a the end of the month during which the licence was required to be delivered up, b the end of the month during which the licence was actually delivered up, c the date on which the licence was due to expire, and d the end of the month preceding that in which there first had effect a new vehicle licence for the vehicle in question; and, in a case where the requirement is a requirement to deliver up a trade licence, those times are the times specified in paragraphs (a) to (c). 3 In section 36 of that Act (additional liability to be imposed on persons convicted of offences under section 35A), for subsection (4) of that section there shall be substituted the following subsections— 4 For the purposes of this section the relevant period is the period— a beginning with the first day of the period for which the licence was applied for or, if later, the day on which the licence first was to have effect, and b ending with whichever is the earliest of the times specified in subsection (4A). 4A the case of a vehicle licence those times are— a the end of the month in which the order is made, b the date on which the licence was due to expire, c the end of the month during which the licence was delivered up, and d the end of the month preceding that in which there first had effect a new licence for the vehicle in question; and, in the case of a trade licence, those times are the times specified in paragraphs (a) to (c). 4 After subsection (5) of that section there shall be inserted the following subsection— 6 Where— a a person has been convicted of an offence under section 35A in relation to a vehicle licence or a trade licence, and b a requirement to pay an amount with respect to that licence has been imposed on that person by virtue of section 35A(3)(b), the order to pay an amount under this section shall have effect instead of that requirement and the amount to be paid under the order shall be reduced by any amount actually paid in pursuance of the requirement. 5 The preceding provisions of this section apply to notices sent and orders made on or after the day on which this Act is passed. Assessments Assessments for excise duty purposes. 20 Schedule 2 to this Act (assessments for excise duty purposes) shall have effect. Part II Value Added Tax Deemed supplies. 21 1 Paragraph 5 of Schedule 4 to the Value Added Tax Act 1994 (disposal of business assets) shall be amended as follows. 2 In sub-paragraph (2)(a) (exception for gifts of small value), for “is" there shall be substituted “ of acquiring or, as the case may be, producing the goods was ” . 3 After sub-paragraph (2) there shall be inserted the following sub-paragraph— 2A For the purposes of determining the cost to the donor of acquiring or producing goods of which he has made a gift, where— a the acquisition by the donor of the goods, or anything comprised in the goods, was by means of a transfer of a business, or a part of a business, as a going concern, b the assets transferred by that transfer included those goods or that thing, and c the transfer of those assets is one falling by virtue of an order under section 5(3) (or under an enactment re-enacted in section 5(3)) to be treated as neither a supply of goods nor a supply of services, the donor and his predecessor or, as the case may be, all of his predecessors shall be treated as if they were the same person. 4 In sub-paragraph (5) (transactions without consideration to be treated as supplies under paragraph 5 only where the supplier is a person entitled to credit for input tax), for “is" there shall be substituted “ or any of his predecessors is a person who (disregarding this paragraph) has or will become ” . 5 After that sub-paragraph there shall be inserted the following sub-paragraph— 5A In relation to any goods or anything comprised in any goods, a person is the predecessor of another for the purposes of this paragraph if— a that other person is a person to whom he has transferred assets of his business by a transfer of that business, or a part of it, as a going concern; b those assets consisted of or included those goods or that thing; and c the transfer of the assets is one falling by virtue of an order under section 5(3) (or under an enactment re-enacted in section 5(3)) to be treated as neither a supply of goods nor a supply of services; and references in this paragraph to a person’s predecessors include references to the predecessors of his predecessors through any number of transfers. 6 The preceding provisions of this section apply to any case where the time when the goods are transferred or disposed of or, as the case may be, put to use, used or made available for use is on or after 17th March 1998. Changes of place of supply: transitional. 22 1 In the Value Added Tax Act 1994 the following section shall be inserted after section 97 (orders, rules and regulations)— Place of supply orders: transitional provision. 97A 1 This section shall have effect for the purpose of giving effect to any order made on or after 17th March 1998 under section 7(11), if— a the order provides for services of a description specified in the order to be treated as supplied in the United Kingdom; b the services would not have fallen to be so treated apart from the order; c the services are not services that would have fallen to be so treated under any provision re-enacted in the order; and d the order is expressed to come into force in relation to services supplied on or after a date specified in the order (“the commencement date"). 2 Invoices and other documents provided to any person before the commencement date shall be disregarded in determining the time of the supply of any services which, if their time of supply were on or after the commencement date, would be treated by virtue of the order as supplied in the United Kingdom. 3 If there is a payment in respect of any services of the specified description that was received by the supplier before the commencement date, so much (if any) of that payment as relates to times on or after that date shall be treated as if it were a payment received on the commencement date. 4 If there is a payment in respect of services of the specified description that is or has been received by the supplier on or after the commencement date, so much (if any) of that payment as relates to times before that date shall be treated as if it were a payment received before that date. 5 Subject to subsection (6) below, a payment in respect of any services shall be taken for the purposes of this section to relate to the time of the performance of those services. 6 Where a payment is received in respect of any services the performance of which takes place over a period a part of which falls before the commencement date and a part of which does not— a an apportionment shall be made, on a just and reasonable basis, of the extent to which the payment is attributable to so much of the performance of those services as took place before that date; b the payment shall, to that extent, be taken for the purposes of this section to relate to a time before that date; and c the remainder, if any, of the payment shall be taken for those purposes to relate to times on or after that date. 2 In section 6 of the Value Added Tax Act 1994 (time of supply), after subsection (14) there shall be inserted the following subsection— 14A In relation to any services of a description specified in an order under section 7(11), this section and any regulations under this section or section 8(4) shall have effect subject to section 97A. 3 This section shall be deemed to have come into force on 17th March 1998. Bad debt relief. 23 1 In subsection (1)(a) of section 36 of the Value Added Tax Act 1994 (bad debts), the words “for a consideration in money" shall be omitted. 2 In subsection (3) of that section— a in paragraph (a), for “payment by way" there shall be substituted “ part ” ; and b in paragraph (b), for “a payment or payments by way" there shall be substituted “ any part ” and for “the payment (or the aggregate of the payments)" there shall be substituted “ that part ” . 3 After that subsection there shall be inserted the following subsection— 3A For the purposes of this section, where the whole or any part of the consideration for the supply does not consist of money, the amount in money that shall be taken to represent any non-monetary part of the consideration shall be so much of the amount made up of— a the value of the supply, and b the VAT charged on the supply, as is attributable to the non-monetary consideration in question. 4 In subsection (5) of that section— a in paragraph (c), for “subsequent payments" there shall be substituted “ anything subsequently received ” ; and b in paragraph (e), for “payment (or further payment) by way" there shall be substituted “ part (or further part) ” . 5 In subsection (6) of that section, in paragraphs (b) and (c) for “a payment" there shall in each place be substituted “ anything received ” . 6 In subsection (7) of that section, for “part payment" there shall be substituted “ receipt of part of the consideration ” . 7 Subsections (1) to (3) above have effect in relation to claims made on or after the day on which this Act is passed. Long leases in Scotland. 24 In section 96(1) of the Value Added Tax Act 1994, in paragraph (b) of the definition of “major interest" (land in Scotland not held on feudal tenure: lessee’s interest must be for a period exceeding 21 years), for “exceeding 21 years" there shall be substituted “ of not less than 20 years ” . Part III Income Tax, Corporation Tax and Capital Gains Tax Chapter I Income Tax and Corporation Tax Income tax charge, rates and reliefs Charge and rates for 1998-99. 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Married couple’s allowance etc. in and after 1999-00. 27 1 The Taxes Act 1988 shall have effect for the year 1999-00 and subsequent years of assessment with the following amendments— a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 For the purposes only of applying section 257C of the Taxes Act 1988 (indexation) for the year 1999-00, the amounts specified for the year 1998-99 in subsections (2) and (3) of section 257A of that Act (married couple’s allowance for persons of 65 or more) shall be taken to have been £4,965 and £5,025, respectively. Corporation tax charge and rates Charge and rates for financial year 1998. 28 1 Corporation tax shall be charged for the financial year 1998 at the rate of 31 per cent. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charge and rates for financial year 1999. 29 1 Corporation tax shall be charged for the financial year 1999 at the rate of 30 per cent. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Corporation tax: periodic payments etc Corporation tax: due and payable date. 30 1 After section 59DA of the Taxes Management Act 1970 there shall be inserted— Further provision as to when corporation tax is due and payable. 59E 1 The Treasury may by regulations make provision, in relation to companies of such descriptions as may be prescribed, for or in connection with treating amounts of corporation tax for an accounting period as becoming due and payable on dates which fall on or before the date on which corporation tax for that period would become due and payable apart from this section. 2 Without prejudice to the generality of subsection (1) above, regulations under this section may make provision— a for or in connection with the determination of amounts of corporation tax which are treated as becoming due and payable under the regulations; b for or in connection with the determination of the dates on which amounts of corporation tax are treated as becoming due and payable under the regulations; c for or in connection with the making of payments to the Board in respect of amounts of corporation tax which are treated as becoming due and payable under the regulations; d for or in connection with the determination of the amount of any such payments as are mentioned in paragraph (c) above; e for or in connection with the determination of the dates on which any such payments as are mentioned in paragraph (c) above become due and payable; f for or in connection with any assumptions which are to be made for any purposes of the regulations; g for or in connection with the payment to the Board of interest on amounts of corporation tax which are treated as becoming due and payable under the regulations; h for or in connection with the repayment of amounts paid under the regulations; i for or in connection with the payment of interest by the Board on amounts paid or repaid under the regulations; j with respect to the furnishing of information to the Board; k with respect to the keeping, production or inspection of any books, documents or other records; l for or in connection with the imposition of such requirements as the Treasury think necessary or expedient for any purposes of the regulations; m for or in connection with appeals in relation to questions arising under the regulations. 3 Regulations under this section may make provision— a for amounts of corporation tax for an accounting period to be treated as becoming due and payable on dates which fall within the accounting period; b for payments in respect of any such amounts of corporation tax for an accounting period as are mentioned in paragraph (a) above to become due and payable on dates which fall within the accounting period. 4 Where interest is charged by virtue of regulations under this section on any amounts of corporation tax for an accounting period which are treated as becoming due and payable under the regulations, the company shall, in such circumstances as may be prescribed, be liable to a penalty not exceeding twice the amount of that interest. 5 Regulations under this section— a may make such modifications of any provisions of the Taxes Acts, or b may apply such provisions of the Taxes Acts, as the Treasury think necessary or expedient for or in connection with giving effect to the provisions of this section. 6 Regulations under this section which apply any provisions of the Taxes Acts may apply those provisions either without modifications or with such modifications as the Treasury think necessary or expedient for or in connection with giving effect to the provisions of this section. 7 Regulations under this section— a may make different provision for different purposes, cases or circumstances; b may make different provision in relation to companies or accounting periods of different descriptions; c may make such supplementary, incidental, consequential or transitional provision as appears to the Treasury to be necessary or expedient. 8 Subject to subsection (9) below, regulations under this section may make provision in relation to accounting periods beginning before (as well as accounting periods beginning on or after) the date on which the regulations are made. 9 Regulations under this section may not make provision in relation to accounting periods ending before the day appointed under section 199 of the Finance Act 1994 for the purposes of Chapter III of Part IV of that Act (corporation tax self-assessment). 10 In this section— “ modifications ” includes amendments, additions and omissions; “ prescribed ” means prescribed by regulations made under this section. 11 Any reference in this section to corporation tax includes a reference— a to any amount due from a company under section 419 of the principal Act (loans to participators etc) as if it were an amount of corporation tax chargeable on the company; b to any sum chargeable on a company under section 747(4)(a) of the principal Act (controlled foreign companies) as if it were an amount of corporation tax. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Abolition of advance corporation tax. 31 1 No company resident in the United Kingdom shall be liable to pay advance corporation tax in respect of any qualifying distribution made on or after 6th April 1999. 2 For the purposes of the Tax Acts, no distribution made on or after 6th April 1999 shall be treated as giving rise to the making of a franked payment. 3 No franked investment income which is attributable to a distribution made on or after 6th April 1999 shall be used to frank any distributions of a company. 4 Section 238(3) of the Taxes Act 1988 shall apply for the purposes of subsection (3) above as it applies for the purposes of Chapter V of Part VI of that Act. 5 Schedule 3 to this Act (which makes provision for and in connection with the abolition of advance corporation tax) shall have effect. Unrelieved surplus advance corporation tax. 32 1 The Treasury may by regulations make provision for or in connection with enabling unrelieved surplus advance corporation tax to be set against liability to corporation tax on profits charged to corporation tax for accounting periods ending on or after 6th April 1999 (and thus to discharge a corresponding amount of any such liability). 2 Without prejudice to the generality of subsection (1) above, regulations under this section may make provision— a for or in connection with imposing a limit or limits on the amount of unrelieved surplus advance corporation tax which may be set against liability to corporation tax on profits charged to corporation tax for an accounting period; b for or in connection with the carrying forward of unrelieved surplus advance corporation tax from earlier accounting periods to later accounting periods; c for or in connection with the recovery of corporation tax from companies in prescribed circumstances where any such liability as is mentioned in paragraph (a) above is or has been discharged by the set-off of unrelieved surplus advance corporation tax; d for or in connection with the reduction or extinguishment of unrelieved surplus advance corporation tax; e for or in connection with treating notional amounts of advance corporation tax (“shadow ACT") as paid by companies in respect of distributions made on or after 6th April 1999; f for or in connection with the determination of amounts of shadow ACT which are treated as paid by companies in respect of distributions made on or after 6th April 1999; g in relation to the treatment of shadow ACT; h in relation to the treatment of companies which have prescribed relationships or connections with each other; i in relation to the treatment of prescribed events, arrangements or transactions involving companies with unrelieved surplus advance corporation tax. 3 The provision which may be made by regulations under this section includes provision— a for or in connection with treating shadow ACT as reducing any limit or limits on the amount of unrelieved surplus advance corporation tax which may be set against any such liability as is mentioned in subsection (2)(a) above; b for or in connection with the carrying forward of shadow ACT from earlier accounting periods to later accounting periods; c for or in connection with the carrying back of shadow ACT from later accounting periods to earlier accounting periods; d for or in connection with the transfer of shadow ACT between companies; e for or in connection with the reduction or extinguishment of shadow ACT. 4 The provision which may be made by virtue of subsection (2)(c) above includes provision for or in connection with the recovery of corporation tax from a company which has a prescribed relationship or connection with a company whose liability to corporation tax is or has been discharged by the set-off of unrelieved surplus advance corporation tax. 5 The provision which may be made by regulations under this section includes provision for or in connection with enabling unrelieved surplus advance corporation tax to be set against liability to a sum charged at step 5 in section 371BC(1) of the Taxation (International and Other Provisions) Act 2010 (controlled foreign companies) as if it were an amount of corporation tax for an accounting period. 6 In this section “ unrelieved surplus advance corporation tax ” means the advance corporation tax (if any) which, apart from sub-paragraph (3) of paragraph 12 of Schedule 3 to this Act but otherwise in accordance with that paragraph, would be treated by virtue of section 239(4) of the Taxes Act 1988 as paid in respect of distributions made by a company in the first accounting period of the company to begin on or after 6th April 1999. 7 The reference in subsection (6) above to an accounting period beginning on or after 6th April 1999 includes a reference to a separate accounting period mentioned in section 245(2) of the Taxes Act 1988 which begins on 6th April 1999. 8 Regulations under this section— a may make such modifications of any provisions of the Tax Acts, or b may apply such provisions of the Tax Acts, as the Treasury think necessary or expedient for or in connection with giving effect to the provisions of this section. 9 Regulations under this section which apply any provisions of the Tax Acts may apply those provisions either without modifications or with such modifications as the Treasury think necessary or expedient for or in connection with giving effect to the provisions of this section. 10 Regulations under this section— a may make different provision for different purposes, cases or circumstances; b may make different provision in relation to companies or accounting periods of different descriptions; c may make such supplementary, incidental, consequential or transitional provision as appears to the Treasury to be necessary or expedient. 11 Regulations under this section may make provision in relation to accounting periods beginning before (as well as accounting periods beginning on or after) the date on which the regulations are made. 12 In this section— “ modifications ” includes amendments, additions and omissions; “ prescribed ” means prescribed by regulations made under this section. Relief for interest payable under the Tax Acts. 33 1 Section 90 of the Taxes Management Act 1970 (interest on overdue tax to be paid without deduction of income tax and not to be allowed as a deduction in computing income, profits or losses) shall be amended as follows. 2 At the beginning there shall be inserted “(1)" and in the subsection (1) so formed— a after “Interest payable under this Part of this Act" there shall be inserted “ (a) ” ; ... b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charge to tax on interest payable under the Tax Acts. 34 1 Section 826 of the Taxes Act 1988 (interest on tax overpaid) shall be amended as follows. 2 In subsection (5) (interest on overpaid tax to be paid without deduction of income tax and not to be brought into account in computing profits or income)— a after “Interest paid under this section" there shall be inserted “ (a) ” ; and b after “and" there shall be inserted “ (b) ” . 3 At the beginning of the paragraph (b) formed by subsection (2)(b) above (interest not to be brought into account in computing profits or income) there shall be inserted “subject to subsection (5A) below,". 4 After subsection (5) there shall be inserted— 5A Paragraph (b) of subsection (5) above does not apply in relation to interest payable to a company within the charge to corporation tax. 5 The amendments made by subsections (3) and (4) above have effect in relation to interest payable by virtue of any paragraph of section 826(1) of the Taxes Act 1988 if the accounting period mentioned in that paragraph is one which ends 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 (corporation tax self-assessment). Further provision about interest payable under the Tax Acts. 35 Schedule 4 to this Act (which makes further amendments relating to interest payable under the Tax Acts by or to companies) shall have effect. Arrangements with respect to payment of corporation tax. 36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gilt-edged securities Abolition of periodic accounting. 37 1 Section 51B of the Taxes Act 1988 (which enables provision to be made requiring tax on interest on gilt-edged securities to be accounted for periodically) shall cease to have effect. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 The preceding provisions of this section have effect in relation only to payments of interest falling due on or after such day as the Treasury may by order appoint. Rents and other receipts from land Taxation of rents and other receipts from land. 38 1 The provisions of Schedule 5 to this Act have effect with respect to tax on rents and other receipts from land. Part I contains amendments relating to the charge to tax under Schedule A or Case V of Schedule D on rents and other receipts from land. Part II contains amendments about relief for losses incurred in a Schedule A business or overseas property business, and the relationship between such relief and other reliefs. Part III contains minor and consequential amendments. 2 So far as relating to income tax, the provisions of Parts I to III of that Schedule have effect for the year 1998-99 and subsequent years of assessment. 3 So far as relating to corporation tax, the provisions of Parts I to III of that Schedule come into force on 1st April 1998, subject to the transitional provisions in Part IV of the Schedule. Land managed as one estate and maintenance funds for historic buildings. 39 Sections 26 and 27 of the Taxes Act 1988 (deductions from rent: land managed as one estate and maintenance funds for historic buildings) shall cease to have effect— a for income tax purposes, on and after 6th April 2001; b for corporation tax purposes, for accounting periods beginning on or after 1st April 2001. Treatment of premiums as rent. 40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tied premises: receipts and expenses treated as those of trade. 41 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 In section 156 of the Taxation of Chargeable Gains Act 1992 (replacement of business assets: buildings and land), for subsection (4) substitute— 4 Where section 98 of the Taxes Act applies (tied premises: receipts and expenses treated as those of trade), the trader shall be treated, to the extent that the conditions in subsection (1) of that section are met in relation to premises, as occupying as well as using the premises for the purposes of the trade. . 3 The above amendments have effect on and after 17th March 1998, subject to the following transitional provisions. In those provisions— “ before commencement ” and “ after commencement ” mean, respectively, before 17th March 1998 and on or after that date; and “ the new section 98 ” means the section as substituted by subsection (1) above. 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Computation of profits of trade, profession or vocation Computation of profits of trade, profession or vocation. 42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Barristers and advocates in early years of practice. 43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Minor and consequential provisions about computations. 46 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 In the provisions of the Tax Acts which refer to the subject of the charge under Case I or II of Schedule D as “ profits or gains ” or “profits and gains" of a trade, profession or vocation— a for “profits or gains" or “profits and gains", wherever occurring, substitute “ profits ” , and b for “arising or accruing", in reference to such profits or gains, substitute “ arising ” . The provisions affected are listed in Schedule 7 to this Act. Gifts to charities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Gifts of money for relief in poor countries. 48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Employee share incentives Employee share options. 49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conditional acquisition of shares. 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Convertible shares provided to directors and employees. 51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Information powers. 52 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provision supplemental to sections 50 to 52. 53 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amendments consequential on sections 50 to 53. 54 1 The Taxation of Chargeable Gains Act 1992 shall be amended as follows. 2 After subsection (5) of section 120 (increase of expenditure by reference to tax charged in relation to shares) there shall be inserted the following subsections— 5A Where an amount is chargeable to tax under section 140A of the Taxes Act in respect of— a the acquisition or disposal of any interest in shares, or b any interest in shares ceasing to be only conditional, the relevant amount is a sum equal to the amount so chargeable. 5B Where an amount is chargeable to tax under section 140D of the Taxes Act in respect of the conversion of shares, the relevant amount is a sum equal to the amount so chargeable. 3 In subsection (7) of that section— a after “(5)," there shall be inserted “ , (5A), (5B) ” ; and b after “138" there shall be inserted “ , 140A, 140D ” . 4 After that subsection there shall be inserted the following subsection— 8 For the purposes of subsection (5A) above this section shall have effect as if references in this section to shares included anything referred to as shares in section 140A of the Taxes Act. 5 After section 149A there shall be inserted the following section— Employee incentive schemes: conditional interests in shares. 149B 1 Where— a an individual has acquired an interest in any shares or securities which is only conditional, b that interest is one which for the purposes of section 140A of the Taxes Act is taken to have been acquired by him as a director or employee of a company, and c by virtue of section 17(1)(b) the acquisition of that interest would, apart from this section, be an acquisition for a consideration equal to the market value of the interest, section 17 shall not apply for calculating the consideration. 2 Instead, the consideration for the acquisition shall be taken (subject to section 120) to be equal to the actual amount or value of the consideration given for that interest as computed in accordance with section 140B of the Taxes Act. 3 This section shall apply in relation only to the individual making the acquisition and, accordingly, shall be disregarded in calculating the consideration received by the person from whom the interest is acquired. 4 Expressions used in this section and in section 140A of the Taxes Act have the same meanings in this section as in that section. 6 This section has effect in relation to disposals on or after 17th March 1998 of interests and shares acquired on or after that date. Construction industry workers Construction workers supplied by agencies. 55 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Subsections (1) and (2) above have effect in relation to— a any payments made on or after 6th April 1998 other than any made in respect of services rendered before that date; and b any payments made before 6th April 1998 in respect of services to be rendered on or after that date. Transitional provisions in connection with section 55. 56 1 Subject to subsection (6) below, subsection (2) below applies if— a a construction trade is being carried on by a person (“the sub-contractor") at the end of the year 1997-98; and b there are receipts of that trade which, but for section 134(5)(c) of the Taxes Act 1988, would have fallen to be treated for the year 1997-98 as the emoluments of an office or employment. 2 Where this subsection applies, then, subject to subsections (4) and (5) below— a the trade shall be deemed to have been permanently discontinued at the end of the year 1997-98; and b to the extent (if any) that the trade includes activities in addition to the rendering of services falling by virtue of section 55 to be treated as the duties of an office or employment, a new trade shall be deemed to have been set up and commenced on 6th April 1998. 3 Subsection (4) below applies if— a a construction trade (“ the old trade ”) is deemed by virtue of subsection (2)(a) above to have been permanently discontinued; and b a construction trade (“the new trade")— i is deemed by virtue of subsection (2)(b) above to have been set up and commenced; or ii (where sub-paragraph (i) above does not apply) is actually set up and commenced in the year 1998-99. 4 Where this subsection applies then, notwithstanding the deemed discontinuance, the old trade and the new trade shall be treated as the same for the purposes of section 83 of the Income Tax Act 2007 (carry-forward of losses against subsequent profits). 5 An officer of the Board shall not become entitled by virtue of anything in this section to give a direction under paragraph 3(2) of Schedule 20 to the Finance Act 1994 (power to revise assessment so that made on the actual basis) in the case of a person whose trade is deemed under subsection (2) above to cease on 5th April 1998. 6 Subsection (2) above does not apply if the sub-contractor by notice to an officer of the Board otherwise elects. 7 An election under subsection (6) above— a if it relates to a trade carried on by an individual, must be included in a return under section 8 of the Taxes Management Act 1970 which is made and delivered in that individual’s case on or before the day on which it is required to be made and delivered under that section; and b if it relates to a trade carried on by persons in partnership, must be included in a return under section 12AA of that Act which is made and delivered in the partners’ case, or in the case of any one or more of them, on or before the day specified in relation to that return under subsection (2) or (3) of that section. 8 In this section “ construction trade ” means a trade consisting in or including the rendering of services under contracts relating to construction operations (within the meaning of section 74 of the Finance Act 2004 ). 9 Where at any time on or after 17th March 1998 and before the day on which this Act is passed any election corresponding to an election under subsection (6) above has been made under a resolution of the House of Commons having effect in accordance with the provisions of the Provisional Collection of Taxes Act 1968, this section has effect, on and after the day on which this Act is passed, as if that election were an election under subsection (6) above. Sub-contractors in the construction industry. 57 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payments and other benefits in connection with termination of employment etc. Payments and other benefits in connection with termination of employment, etc. 58 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Benefits in kind Car fuel. 59 1 In section 158 of the Taxes Act 1988 (car fuel) for the Tables in subsection (2) (tables of cash equivalents) there shall be substituted— TABLE A Cylinder capacity of car in cubic centimetres Cash equivalent 1,400 or less £1,010 More than 1,400 but not more than 2,000 £1,280 More than 2,000 £1,890 TABLE AB Cylinder capacity of car in cubic centimetres Cash equivalent 2,000 or less £1,280 More than 2,000 £1,890 TABLE B Description of car Cash equivalent Any car £1,890 2 This section shall have effect for the year 1998-99 and subsequent years of assessment. Reductions for road fuel gas cars. 60 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Travelling expenses. 61 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Profit-related pay Provision preventing manipulation of profit periods. 62 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foreign earnings deduction Withdrawal except in relation to seafarers. 63 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PAYE : non-cash benefits etc. Transitory provision relating to tradeable assets. 64 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payment in the form of a readily convertible asset. 65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Enhancing the value of an asset. 66 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gains from share options etc. 67 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vouchers and credit-tokens. 68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Intermediaries, non-UK employers, agencies etc. 69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The enterprise investment scheme and venture capital trusts Qualifying trades for EIS and VCTs. 70 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pre-arranged exits from EIS. 71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Qualifying holdings for VCTs after 2nd July 1997. 72 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other changes to requirements for VCTs. 73 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other changes to EIS etc. 74 1 Schedule 13 to this Act, which amends the provisions mentioned in subsection (2) below, shall have effect. 2 The provisions are— a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b sections 150A and 150B of the Taxation of Chargeable Gains Act 1992 (EIS relief in respect of chargeable gains); c Schedule 5B to that Act (EIS deferral of chargeable gains); and d that Chapter as it has effect in relation to shares issued before 1st January 1994 (BES income tax relief) and section 150 of that Act (BES relief in respect of chargeable gains). 3 Unless the contrary intention appears, the amendments made by that Schedule have effect in relation to shares issued on or after 6th April 1998. Individual savings accounts etc. Use of PEPs powers to provide for accounts. 75 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax credits for accounts and for PEPs. 76 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The insurance element etc. 77 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Phasing out of TESSAs. 78 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relief for interest and losses etc. Relief for loan to acquire interest in a close company. 79 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relief for losses on unlisted shares in trading companies. 80 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 Carry forward of non-trading deficit on loan relationships. 82 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 The amendments made by this section shall be deemed always to have had effect. Capital allowances First-year allowances for investment in Northern Ireland. 83 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . First-year allowances for small businesses etc. 84 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . First-year allowances: consequential amendments etc. 85 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Insurance, insurance companies and friendly societies Life policies etc. 86 Schedule 14 to this Act (which makes provision in relation to the taxation of life policies etc under Chapter II of Part XIII of the Taxes Act 1988) shall have effect. Non-resident insurance companies: tax representatives. 87 After section 552 of the Taxes Act 1988 (duty of insurers to provide certain information) there shall be inserted— Tax representatives. 552A 1 This section has effect for the purpose of securing that, where it applies to an overseas insurer, another person is the overseas insurer’s tax representative. 2 In this section “ overseas insurer ” means a person who is not resident in the United Kingdom who carries on a business which consists of or includes the effecting and carrying out of— a policies of life insurance; b contracts for life annuities; or c capital redemption policies. 3 This section applies to an overseas insurer— a if the condition in subsection (4) below is satisfied on the designated day; or b where that condition is not satisfied on that day, if it has subsequently become satisfied. 4 The condition mentioned in subsection (3) above is that— a there are in force relevant insurances the obligations under which are obligations of the overseas insurer in question or of an overseas insurer connected with him; and b the total amount or value of the gross premiums paid under those relevant insurances is £1 million or more. 5 In this section “ relevant insurance ” means any policy of life insurance, contract for a life annuity or capital redemption policy in relation to which this Chapter has effect and in the case of which— a the holder is resident in the United Kingdom; b the obligations of the insurer are obligations of a person not resident in the United Kingdom; and c those obligations are not attributable to a branch or agency of that person’s in the United Kingdom. 6 Before the expiration of the period of three months following the day on which this section first applies to an overseas insurer, the overseas insurer must nominate to the Board a person to be his tax representative. 7 A person shall not be a tax representative unless— a if he is an individual, he is resident in the United Kingdom and has a fixed place of residence there, or b if he is not an individual, he has a business establishment in the United Kingdom, and, in either case, he satisfies such other requirements (if any) as are prescribed in regulations made for the purpose by the Board. 8 A person shall not be an overseas insurer’s tax representative unless— a his nomination by the overseas insurer has been approved by the Board; or b he has been appointed by the Board. 9 The Board may by regulations make provision supplementing this section; and the provision that may be made by any such regulations includes provision with respect to— a the making of a nomination by an overseas insurer of a person to be his tax representative; b the information which is to be provided in connection with such a nomination; c the form in which such a nomination is to be made; d the powers and duties of the Board in relation to such a nomination; e the procedure for approving, or refusing to approve, such a nomination, and any time limits applicable to doing so; f the termination, by the overseas insurer or the Board, of a person’s appointment as a tax representative; g the appointment by the Board of a person as the tax representative of an overseas insurer (including the circumstances in which such an appointment may be made); h the nomination by the overseas insurer, or the appointment by the Board, of a person to be the tax representative of an overseas insurer in place of a person ceasing to be his tax representative; j circumstances in which an overseas insurer to whom this section applies may, with the Board’s agreement, be released (subject to any conditions imposed by the Board) from the requirement that there must be a tax representative; k appeals to the Special Commissioners against decisions of the Board under this section or regulations under it. 10 The provision that may be made by regulations under subsection (9) above also includes provision for or in connection with the making of other arrangements between the Board and an overseas insurer for the purpose of securing the discharge by or on behalf of the overseas insurer of the relevant duties, within the meaning of section 552B. 11 Section 839 (connected persons) applies for the purposes of this section. 12 In this section— “ the designated day ” means such day as the Board may specify for the purpose in regulations; “ tax representative ” means a tax representative under this section. Duties of overseas insurers’ tax representatives. 552B 1 It shall be the duty of an overseas insurer’s tax representative to secure (where appropriate by acting on the overseas insurer’s behalf) that the relevant duties are discharged by or on behalf of the overseas insurer. 2 For the purposes of this section “ the relevant duties ” are— a the duties imposed by section 552, b any duties imposed by regulations made under subsection (4A)(a) of that section, and c any duties imposed by regulations made under subsection (4A)(b) of that section by virtue of subsection (4B) of that section, so far as relating to relevant insurances under which the overseas insurer in question has any obligations. 3 An overseas insurer’s tax representative shall be personally liable— a in respect of any failure to secure the discharge of the relevant duties, and b in respect of anything done for purposes connected with acting on the overseas insurer’s behalf, as if the relevant duties were imposed jointly and severally on the tax representative and the overseas insurer. 4 In the application of this section in relation to any particular tax representative, it is immaterial whether any particular relevant duty arose before or after his appointment. 5 This section has effect in relation to relevant duties relating to chargeable events happening on or after the day by which section 552A(6) requires the nomination of the overseas insurer’s first tax representative to be made. 6 Expressions used in this section and in section 552A have the same meaning in this section as they have in that section. Overseas life assurance business. 88 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Personal portfolio bonds. 89 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Distributions to friendly societies. 90 1 The repeal by section 30(4) of the Finance ( No. 2) Act 1997 of section 231(2) of the Taxes Act 1988 (payment of tax credit to a company resident in the UK ) shall not have effect in relation to any distribution made to a friendly society before 6th April 2004 which is— a a distribution to a friendly society all of whose profits are exempt from corporation tax by virtue of section 460(1) of the Taxes Act 1988 (life or endowment business of friendly society); or b a distribution not falling within paragraph (a) above in relation to which exemption is given under section 460(1) of that Act. 2 In relation to any distribution falling within paragraph (a) or (b) of subsection (1) above— a paragraph 3 of Schedule 4 to the Finance (No. 2) Act 1997 (which, from 6th April 1999, repeals certain provisions about claims for tax credits for accounting periods to which self-assessment applies) shall have effect as if the reference in sub-paragraph (2) of that paragraph to 6th April 1999 were a reference to 6th April 2004; and b paragraph 2 of that Schedule (which repeals certain provisions about claims for tax credits for earlier periods) shall have no effect. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Schedule 8 to the Finance (No. 2) Act 1997 (repeals), so far as it relates to any repeal referred to in the preceding provisions of this section, shall have effect subject to those provisions. Provisional repayments in connection with pension business. 91 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pensions Approved retirement benefit schemes etc. 92 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Benefits received under non-approved retirement benefits scheme. 93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Approval of personal pension schemes. 94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Personal pensions: charge on withdrawal of approval. 95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Information relating to personal pension schemes etc. 96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Notices to be given to scheme administrator. 97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Assessments on scheme administrators. 98 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 In section 9 of the Taxes Management Act 1970 (self-assessment), in subsection (1), for “subsection (2)" there shall be substituted “ subsections (1A) and (2) ” ; and after that subsection there shall be inserted the following subsection— 1A The tax to be assessed on a person by a self-assessment shall not include any tax which, under Chapter I or IV of Part XIV of the principal Act, is charged on the administrator of a scheme (within the meaning of section 658A of that Act) and is assessable by the Board in accordance with that section. 3 Subsection (2) above shall have effect for the year 1998-99 and subsequent years of assessment and shall be deemed to have had effect for the years 1996-97 and 1997-98. Futures and options Extension of provisions relating to guaranteed returns. 99 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Securities Accrued income scheme. 100 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dealers in securities etc. 101 1 Section 471 of the Taxes Act 1988 (exchange of securities in connection with conversion operations, nationalisation etc.) shall cease to have effect. 2 Section 472 of that Act (distribution of securities issued in connection with nationalisation etc.) shall cease to have effect. 3 Subsection (1) above applies in relation to exchanges made after the day on which this Act is passed. 4 Subsection (2) above applies in relation to issues of securities occurring after that day. Manufactured dividends. 102 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 In section 737D of the Taxes Act 1988 (power by regulations to provide for manufactured payments to be eligible for relief) in subsection (2) (which defines manufactured payment as any manufactured dividend etc) the words “manufactured dividend" shall cease to have effect. 4 Schedule 23A to the Taxes Act 1988 (manufactured dividends and interest) shall be amended in accordance with subsections (5) to (8) below. 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 In paragraph 2(3) (manufactured dividends to which paragraph 2(2) does not apply) paragraph (a) (duty to account for notional ACT) shall cease to have effect. 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 In consequence of subsection (6) above, the following provisions shall also cease to have effect— a in paragraph 2, sub-paragraphs (4) and (5) and, in sub-paragraph (6), paragraph (b) and the word “and" immediately preceding it; and b in paragraph 2A (deductibility of manufactured payment in the case of the manufacturer) in sub-paragraph (1), the words “together with an amount equal to the notional ACT" and sub-paragraph (3). 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Subsections (2) to (8) above have effect in relation to manufactured dividends paid (or treated for the purposes of Schedule 23A to the Taxes Act 1988 as paid) on or after 6th April 1999. Double taxation relief Restriction of relief on certain interest and dividends. 103 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Adjustments of interest and dividends for spared tax etc. 104 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “financial expenditure". 105 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Underlying tax reflecting interest or dividends. 106 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Notification of foreign tax adjustment. 107 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfer pricing, FOREX and financial instruments New regime for transfer pricing etc. 108 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 In the Finance Act 1996— a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b in paragraph 16 of Schedule 9 (imputed interest)— i in sub-paragraph (1), for the words from “sections 770" to “that Act" there shall be substituted “ Schedule 28AA to the Taxes Act 1988 (provision not at arm’s length) ” ; and ii in sub-paragraph (2), for “Those sections" there shall be substituted “ That Schedule ” . 5 Subject to subsection (6) below, this section and Schedule 16 to this Act have effect (in relation to provision made or imposed at any time)— a 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); and b for the purposes of income tax, as respects any year of assessment ending on or after that day. 6 The Schedule 28AA to the Taxes Act 1988 that is inserted by subsection (2) above shall not, in the case of any potentially advantaged person, apply as respects the consequences at any time of the difference between the actual provision and the arm’s length provision if— a that time falls before 17th March 2001; b the actual provision is a provision made or imposed by means of contractual arrangements entered into by that person before 17th March 1998; c the requirements of paragraph 1(1)(b) of Schedule 28AA to that Act (control requirements) are satisfied in the case of the actual provision and that person by reference only to paragraph 4(2)(b) of that Schedule (joint ventures etc.); d the rights and obligations of that person by virtue of the actual provision are not ones that have been varied or continued in pursuance of any transaction entered into by that person in the period between 17th March 1998 and that time; and e that person is not a party, and has not been a party, to any transaction by virtue of which he could during that period have secured the variation or termination of those rights and obligations. 7 Expressions used in subsection (6) above and in Schedule 28AA to the Taxes Act 1988 have the same meanings in that subsection as in that Schedule. 109 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Determinations requiring the sanction of the Board. 110 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Notice to potential claimants. 111 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Controlled foreign companies Exempt activities. 112 1 Part II of Schedule 25 to the Taxes Act 1988 (exempt activities) shall be amended as follows. 2 In paragraph 9 (activities which constitute investment business) for sub-paragraph (1A) (definition of “intellectual property") there shall be substituted— 1A In sub-paragraph (1)(a) above “ intellectual property ” includes (in particular)— a any industrial, commercial or scientific information, knowledge or expertise; b any patent, trade mark, registered design, copyright or design right; c any licence or other right in respect of intellectual property; d any rights under the law of a country outside the United Kingdom which correspond or are similar to those falling within paragraph (b) or (c) above. 3 In paragraph 11(1) (activities which constitute wholesale, distributive or financial business) for paragraph (c) (banking or any similar business involving the receipt of deposits, loans or both and the making of loans or investments) there shall be substituted— c banking, deposit-taking, money-lending or debt-factoring, or any business similar to banking, deposit-taking, money-lending or debt-factoring; . 4 In consequence of subsection (3) above— a in paragraph 9(3), for “banking or any similar business" there shall be substituted “ business ” ; b in paragraph 11(3), for “banking or other business" there shall be substituted “ business ” . 5 This section has effect in relation to accounting periods of a controlled foreign company, within the meaning of Chapter IV of Part XVII of the Taxes Act 1988, beginning on or after 17th March 1998. Miscellaneous amendments. 113 Schedule 17 to this Act (which makes provision in relation to controlled foreign companies) shall have effect. Changes in company ownership Postponed corporation tax. 114 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Information powers where ownership changes. 115 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions supplemental to sections 114 and 115. 116 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Corporation tax self-assessment Company tax returns, assessments and related matters. 117 1 The provisions of Schedule 18 to this Act have effect in place of— a the provisions of Parts II and IV of the Taxes Management Act 1970 (returns, assessment and claims), so far as they relate to corporation tax, b certain related provisions of Part X of that Act (penalties) and c Schedule 17A to the Taxes Act 1988 (group relief: claims), and also make provision in relation to claims for allowances under the Capital Allowances Act 2 Schedule 18 to this Act, the Taxes Management Act 1970 and the Tax Acts shall be construed and have effect as if that Schedule were contained in that Act. 3 The enactments mentioned in Schedule 19 to this Act have effect with the amendments specified there, which are minor amendments and amendments consequential on Schedule 18. 4 Except as otherwise provided, the provisions of Schedules 18 and 19 to this Act have effect in relation to accounting periods ending on or after the self-assessment appointed day. 5 In this section “ the self-assessment appointed day ” means the day appointed by the Treasury under section 199 of the Finance Act 1994 for the purposes of Chapter III of Part IV of that Act (corporation tax self-assessment). Telephone claims etc. Claims for income tax purposes. 118 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Evidential provisions in PAYE regulations. 119 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chapter II Taxation of Chargeable Gains Rate for trustees Rate of CGT for trustees etc. 120 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Taper relief and indexation allowance Taper relief for CGT. 121 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Schedule 21 to this Act (which makes incidental and consequential provision in connection with the introduction of taper relief) shall have effect. 4 This section and those two Schedules have effect for the year 1998-99 and subsequent years of assessment. Freezing of indexation allowance for CGT. 122 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 In section 13 of that Act (attribution of gains to non-resident companies), the following subsection shall be inserted after subsection (11)— 11A For the purposes of this section the amount of the gain or loss accruing at any time to a company that is not resident in the United Kingdom shall be computed (where it is not the case) as if that company were within the charge to corporation tax on capital gains. 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Subject to subsection (7) below, the preceding provisions of this section have effect in relation to disposals on or after 6th April 1998. 7 This section does not affect the computation of the amount of so much of any gain as— a is treated for the purposes of the taxation of chargeable gains as having accrued on a disposal on or after 6th April 1998; but b is taken for those purposes to be equal to the whole or any part of a gain that— i would (but for any enactment relating to the taxation of chargeable gains) have accrued on an actual disposal made before that date, or ii would have accrued on a disposal assumed under any such enactment to have been made before that date. Pooling and identification of shares etc. Abolition of pooling for CGT. 123 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 In subsection (3) of that section (interpretation), for “ “ a new holding ” is" there shall be substituted “ “ a section 104 holding ” is ” . 4 For subsection (4) of that section there shall be substituted the following subsection— 4 For the purposes of this Chapter securities of a company which are held— a by a person who acquired them as an employee of the company or of any other person, and b on terms which for the time being restrict his right to dispose of them, shall (notwithstanding that they would otherwise fall to be treated as of the same class) be treated as of a different class from any securities acquired by him otherwise than as an employee of the company or of any other person and also from any shares that are not held subject to restrictions, or the same restrictions, on disposal or in the case of which the restrictions are no longer in force. 5 In the following enactments for the words “new holding", wherever they occur, there shall be substituted “ section 104 holding ” , namely— a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b in sections 104(6), 107 and 110 of the Taxation of Chargeable Gains Act 1992. 6 The preceding provisions of this section have effect in relation to any disposal on or after 6th April 1998 of any securities (whenever acquired). 7 The powers of the Treasury to make provision by regulations under one or more of— a section 333 of the Taxes Act 1988 (investment plan regulations) , a section 151 of the Taxation of Chargeable Gains Act 1992 (capital gains tax and investment plans), and c Chapter 3 of Part 6 of the Income Tax (Trading and Other Income) Act 2005 (income from individual investment plans), shall include power to provide, to such extent as appears to them to be appropriate for purposes connected with the enactment of this section and section 124 below, for any provision contained in any such regulations to have effect retrospectively in relation to such times falling on or after 17th March 1998 as may be specified in the regulations. New identification rules for CGT. 124 1 After section 106 of the Taxation of Chargeable Gains Act 1992 there shall be inserted the following section— Identification of securities: general rules for capital gains tax. 106A 1 This section has effect for the purposes of capital gains tax (but not corporation tax) where any securities are disposed of by any person. 2 The securities disposed of shall be identified in accordance with the following provisions of this section with securities of the same class that have been acquired by the person making the disposal. 3 The provisions of this section have effect in the case of any disposal notwithstanding that some or all of the securities disposed of are otherwise identified— a by the disposal, or b by a transfer or delivery giving effect to it; but where a person disposes of securities in one capacity, they shall not be identified under those provisions with any securities which he holds, or can dispose of, only in some other capacity. 4 Securities disposed of on an earlier date shall be identified before securities disposed of on a later date; and, accordingly, securities disposed of by a later disposal shall not be identified with securities already identified as disposed of by an earlier disposal. 5 Subject to subsection (4) above, if within the period of thirty days after the disposal the person making it acquires securities of the same class, the securities disposed of shall be identified— a with securities acquired by him within that period, rather than with other securities; and b with securities acquired at an earlier time within that period, rather than with securities acquired at a later time within that period. 6 Subject to subsections (4) and (5) above, securities disposed of shall be identified with securities acquired at a later time, rather than with securities acquired at an earlier time. 7 Subsection (6) above shall not require securities to be identified with particular securities comprised in a section 104 holding or a 1982 holding. 8 Accordingly, that subsection shall have effect for determining whether, and to what extent, any securities should be identified with the whole or any part of a section 104 holding or a 1982 holding— a as if the time of the acquisition of a section 104 holding were the time when it first came into being; and b as if 31st March 1982 were the time of the acquisition of a 1982 holding. 9 The identification rules set out in the preceding provisions of this section have effect subject to subsection (1) of section 105, and securities disposed of shall not be identified with securities acquired after the disposal except in accordance with that section or subsection (5) above. 10 In this section— “ 1982 holding ” has the same meaning as in section 109; “ securities ” means any securities within the meaning of section 104 or any relevant securities within the meaning of section 108. 11 For the purposes of this section securities of a company shall not be treated as being of the same class unless they are so treated by the practice of a recognised stock exchange, or would be so treated if dealt with on that recognised stock exchange. 2 In subsection (1) of section 105 of that Act (disposal and acquisition on the same day), for “The following provisions" there shall be substituted “ Paragraphs (a) and (b) below ” ; and for subsection (2) of that section there shall be substituted the following subsection— 2 Where the quantity of securities disposed of by any person exceeds the aggregate quantity of— a the securities (if any) which are required by subsection (1) above to be identified with securities acquired on the day of the disposal, b the securities (if any) which are required by any of the provisions of section 106 or 106A(5) to be identified with securities acquired after the day of the disposal, and c the securities (if any) which are required by any of the provisions of sections 104, 106, 106A or 107, or of Schedule 2, to be identified with securities acquired before the day of the disposal, the disposal shall be treated as diminishing a quantity of securities subsequently acquired, and as so diminishing any quantity so acquired at an earlier date, rather than one so acquired at a later date. 3 In section 107 of that Act (general identification rules) for subsections (1) and (2) there shall be substituted the following subsections— 1 This section has effect for the purposes of corporation tax where any securities are disposed of by a company. 1A The securities disposed of shall be identified in accordance with the following provisions of this section with securities of the same class that have been acquired by the company making the disposal and could be comprised in that disposal. 2 The provisions of this section have effect in the case of any disposal notwithstanding that some or all of the securities disposed of are otherwise identified— a by the disposal, or b by a transfer or delivery giving effect to it; but where a company disposes of securities in one capacity, they shall not be identified with securities which it holds, or can dispose of, only in some other capacity. 4 In section 108 of that Act (relevant securities), at the beginning there shall be inserted the following subsection— A1 This section has effect for the purposes of corporation tax where any relevant securities are disposed of by a company. 5 In that section— a in subsections (2) and (7), for “person", in each place where it occurs, there shall be substituted “ company ” ; and b in subsection (2), for “him" and “he" there shall be substituted, respectively, “ the company ” and “ it ” . 6 In each of section 151B(1) and (7) of that Act and paragraph 4(2) of Schedule 5C to that Act (disapplication of share pooling and identification rules in relation to shares in a VCT ), for “107" there shall be substituted “ 106A ” . 7 Subject to subsection (8) below, the preceding provisions of this section have effect in relation to any disposal on or after 6th April 1998. 8 For the purposes of capital gains tax for the year 1997-98 (but not for the purposes of corporation tax), the following provisions have effect in relation to any disposal of securities made on or after 17th March 1998 and before 6th April 1998, that is to say— a the identification rule in subsection (5) of the section 106A of the Taxation of Chargeable Gains Act 1992 set out in subsection (1) above shall apply in accordance with subsections (3) and (4) of that section; b that rule shall have priority over any other rule, except the one in section 105(1) of that Act; and c section 104(1) of that Act shall not apply to any securities identified by virtue of this subsection with the securities disposed of. 9 In subsection (8) above “ securities ” means any securities within the meaning of section 104 of the Taxation of Chargeable Gains Act 1992 or any relevant securities within the meaning of section 108 of that Act. Indexation and share pooling etc. 125 1 In subsection (1) of section 110 of the Taxation of Chargeable Gains Act 1992 (indexation allowance for section 104 holdings), for “This" there shall be substituted “ For the purposes of corporation tax this ” . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Subject to subsection (5) below, the preceding provisions of this section have effect in relation to disposals on or after 6th April 1998. 5 This section does not affect the computation of the amount of so much of any gain as— a is treated for the purposes of the taxation of chargeable gains as having accrued on a disposal on or after 6th April 1998; but b is taken for those purposes to be equal to the whole or any part of a gain that— i would (but for any enactment relating to the taxation of chargeable gains) have accrued on an actual disposal made before that date, or ii would have accrued on a disposal assumed under any such enactment to have been made before that date. Stock dividends Capital gains on stock dividends. 126 1 For sections 141 and 142 of the Taxation of Chargeable Gains Act 1992 (stock dividends) there shall be substituted the following section— Capital gains on stock dividends. 142 1 This section applies where any share capital to which section 249 of the Taxes Act applies is issued as mentioned in subsection (4), (5) or (6) of that section in respect of shares in the company held by any person. 2 The case shall not constitute a reorganisation of the company’s share capital for the purposes of sections 126 to 128. 3 The person who acquires the share capital by means of its issue shall (notwithstanding section 17(1)) be treated for the purposes of section 38(1)(a) as having acquired that asset for a consideration equal to the appropriate amount in cash (within the meaning of section 251(2) to (4) of the Taxes Act). 2 This section applies to any share capital issued on or after 6th April 1998. Non-residents etc. Charge to CGT on temporary non-residents. 127 1 After section 10 of the Taxation of Chargeable Gains Act 1992 there shall be inserted the following section— Temporary non-residents. 10A 1 This section applies in the case of any individual (“the taxpayer") if— a he satisfies the residence requirements for any year of assessment (“the year of return"); b he did not satisfy those requirements for one or more years of assessment immediately preceding the year of return but there are years of assessment before that year for which he did satisfy those requirements; c there are fewer than five years of assessment falling between the year of departure and the year of return; and d four out of the seven years of assessment immediately preceding the year of departure are also years of assessment for each of which he satisfied those requirements. 2 Subject to the following provisions of this section and section 86A, the taxpayer shall be chargeable to capital gains tax as if— a all the chargeable gains and losses which (apart from this subsection) would have accrued to him in an intervening year, b all the chargeable gains which under section 13 or 86 would be treated as having accrued to him in an intervening year if he had been resident in the United Kingdom throughout that intervening year, and c any losses which by virtue of section 13(8) would have been allowable in his case in any intervening year if he had been resident in the United Kingdom throughout that intervening year, were gains or, as the case may be, losses accruing to the taxpayer in the year of return. 3 Subject to subsection (4) below, the gains and losses which by virtue of subsection (2) above are to be treated as accruing to the taxpayer in the year of return shall not include any gain or loss accruing on the disposal by the taxpayer of any asset if— a that asset was acquired by the taxpayer at a time in the year of departure or any intervening year when he was neither resident nor ordinarily resident in the United Kingdom; b that asset was so acquired otherwise than by means of a relevant disposal which by virtue of section 58, 73 or 258(4) is treated as having been a disposal on which neither a gain nor a loss accrued; c that asset is not an interest created by or arising under a settlement; and d the amount or value of the consideration for the acquisition of that asset by the taxpayer does not fall, by reference to any relevant disposal, to be treated as reduced under section 23(4)(b) or (5)(b), 152(1)(b), 162(3)(b) or 247(2)(b) or (3)(b). 4 Where— a any chargeable gain that has accrued or would have accrued on the disposal of any asset (“ the first asset ”) is a gain falling (apart from this section) to be treated by virtue of section 116(10) or (11), 134 or 154(2) or (4) as accruing on the disposal of the whole or any part of another asset, and b the other asset is an asset falling within paragraphs (a) to (d) of subsection (3) above but the first asset is not, subsection (3) above shall not exclude that gain from the gains which by virtue of subsection (2) above are to be treated as accruing to the taxpayer in the year of return. 5 The gains and losses which by virtue of subsection (2) above are to be treated as accruing to the taxpayer in the year of return shall not include any chargeable gain or allowable loss accruing to the taxpayer in an intervening year which, in the taxpayer’s case, has fallen to be brought into account for that year by virtue of section 10 or 16(3). 6 The reference in subsection (2)(c) above to losses allowable in an individual’s case in an intervening year is a reference to only so much of the aggregate of the losses that would have been available in accordance with subsection (8) of section 13 for reducing gains accruing by virtue of that section to that individual in that year as does not exceed the amount of the gains that would have accrued to him in that year if it had been a year throughout which he was resident in the United Kingdom. 7 Where this section applies in the case of any individual, nothing in any enactment imposing any limit on the time within which an assessment to capital gains tax may be made shall prevent any such assessment for the year of departure from being made in the taxpayer’s case at any time before the end of two years after the 31st January next following the year of return. 8 In this section— “ intervening year ” means any year of assessment which, in a case where the conditions in paragraphs (a) to (d) of subsection (1) above are satisfied, falls between the year of departure and the year of return; “ relevant disposal ”, means a disposal of an asset acquired by the person making the disposal at a time when that person was resident or ordinarily resident in the United Kingdom; and “ the year of departure ” means the last year of assessment before the year of return for which the taxpayer satisfied the residence requirements. 9 For the purposes of this section an individual satisfies the residence requirements for a year of assessment if that year of assessment is one during any part of which he is resident in the United Kingdom or during which he is ordinarily resident in the United Kingdom. 10 This section is without prejudice to any right to claim relief in accordance with any double taxation relief arrangements. 2 In section 9(3) of that Act (exclusion from charge of persons temporarily resident), for “section 10(1)" there shall be substituted “ sections 10(1) and 10A ” . 3 In section 96 of that Act (payments by and to companies), after subsection (9) there shall be inserted the following subsections— 9A For the purposes of this section an individual shall be deemed to have been resident in the United Kingdom at any time in any year of assessment which in his case is an intervening year for the purposes of section 10A. 9B If— a it appears after the end of any year of assessment that any individual is to be treated by virtue of subsection (9A) above as having been resident in the United Kingdom at any time in that year, and b as a consequence, any adjustments fall to be made to the amounts of tax taken to have been chargeable by virtue of this section on any person, nothing in any enactment limiting the time for the making of any claim or assessment shall prevent the making of those adjustments (whether by means of an assessment, an amendment of an assessment, a repayment of tax or otherwise). 4 This section has effect— a in any case in which the year of departure is the year 1998-99 or a subsequent year of assessment; and b in any case in which the year of departure is the year 1997-98 and the taxpayer was resident or ordinarily resident in the United Kingdom at a time in that year on or after 17th March 1998. Disposal of interests in a settlement. 128 1 In section 76 of the Taxation of Chargeable Gains Act 1992 (disposal of interests in settled property)— a in subsection (1), at the beginning there shall be inserted “Subject to subsection (1A) below"; b after that subsection there shall be inserted the subsections set out in subsection (2) below; and c after subsection (2) there shall be inserted the subsection set out in subsection (3) below. 2 The subsections inserted after subsection (1) are as follows— 1A Subject to subsection (3) below, subsection (1) above does not apply if— a the settlement falls within subsection (1B) below; or b the property comprised in the settlement is or includes property deriving directly or indirectly from a settlement falling within that subsection. 1B A settlement falls within this subsection if there has been a time when the trustees of that settlement— a were not resident or ordinarily resident in the United Kingdom; or b fell to be regarded for the purposes of any double taxation relief arrangements as resident in a territory outside the United Kingdom. 3 The subsection inserted after subsection (2) is as follows— 3 Subsection (1A) above shall not prevent subsection (1) above from applying where the disposal in question is a disposal in consideration of obtaining settled property that is treated as made under subsection (2) above. 4 This section has effect in relation to any disposal on or after 6th March 1998. Attribution of gains to settlor in section 10A cases. 129 1 After section 86 of the Taxation of Chargeable Gains Act 1992 there shall be inserted the following section— Attribution of gains to settlor in section 10A cases. 86A 1 Subsection (2) below applies in the case of a person who is a settlor in relation to any settlement (“the relevant settlement") where— a by virtue of section 10A, amounts falling within section 86(1)(e) for any intervening year or years would (apart from this section) be treated as accruing to the settlor in the year of return; and b there is an excess of the relevant chargeable amounts for the non-residence period over the amount of the section 87 pool at the end of the year of departure. 2 Only so much (if any) of— a the amount falling within section 86(1)(e) for the intervening year, or b if there is more than one intervening year, the aggregate of the amounts falling within section 86(1)(e) for those years, as exceeds the amount of the excess mentioned in subsection (1)(b) above shall fall in accordance with section 10A to be attributed to the settlor for the year of return. 3 In subsection (1) above, the reference to the relevant chargeable amounts for the non-residence period is (subject to subsection (5) below) a reference to the aggregate of the amounts on which beneficiaries of the relevant settlement are charged to tax under section 87 or 89(2) for the intervening year or years in respect of any capital payments received by them. 4 In subsection (1) above, the reference to the section 87 pool at the end of the year of departure is (subject to subsection (5) below) a reference to the amount (if any) which, in accordance with subsection (2) of that section, fell in relation to the relevant settlement to be carried forward from the year of departure to be included in the amount of the trust gains for the year of assessment immediately following the year of departure. 5 Where the property comprised in the relevant settlement has at any time included property not originating from the settlor, only so much (if any) of any capital payment or amount carried forward in accordance with section 87(2) as, on a just and reasonable apportionment, is properly referable to property originating from the settlor shall be taken into account for the purposes of subsections (3) and (4) above. 6 Where any reduction falls to be made by virtue of subsection (2) above in any amount to be attributed in accordance with section 10A to any settlor for any year of assessment, the reduction to be treated as made for that year in accordance with section 87(3) in the case of the settlement in question shall not be made until— a the reduction (if any) falling to be made by virtue of that subsection has been made in the case of every settlor to whom any amount is so attributed; and b effect has been given to any reduction required to be made under subsection (7) below. 7 Where in the case of any settlement there is (after the making of any reduction or reductions in accordance with subsection (2) above) any amount or amounts falling in accordance with section 10A to be attributed for any year of assessment to settlors of the settlement, the amount or (as the case may be) aggregate amount falling in accordance with that section to be so attributed shall be applied in reducing the amount carried forward to that year in accordance with section 87(2). 8 Where an amount or aggregate amount has been applied, in accordance with subsection (7) above, in reducing the amount which in the case of any settlement is carried forward to any year in accordance with section 87(2), that amount (or, as the case may be, so much of it as does not exceed the amount which it is applied in reducing) shall be deducted from the amount used for that year for making the reduction under section 87(3) in the case of that settlement. 9 Expressions used in this section and section 10A have the same meanings in this section as in that section; and paragraph 8 of Schedule 5 shall apply for the construction of the references in subsection (5) above to property originating from the settlor as it applies for the purposes of that Schedule. 2 In section 97(1) to (5), (7) and (8) of that Act (interpretation of sections 87 to 96), for the words “sections 87", wherever occurring, there shall be substituted “ sections 86A ” . 3 This section has effect where the year of departure is the year 1997-98 or any subsequent year of assessment. Charge on beneficiaries of settlements with non-resident settlors. 130 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 In subsection (1) of section 88 of that Act (charge on beneficiaries of a settlement treated as resident outside the United Kingdom if the settlor is or has been domiciled and resident in the United Kingdom)— a the word “ and ” shall be inserted at the end of paragraph (a); and b paragraph (c) and the word “and" immediately preceding it shall be omitted. 3 Subject to subsection (4) below, the preceding provisions of this section apply for the year 1998-99 and subsequent years of assessment and shall be deemed to have applied for the year 1997-98. 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charge on settlors of settlements for grandchildren. 131 1 In paragraph 2 of Schedule 5 to the Taxation of Chargeable Gains Act 1992 (test whether settlor has interest)— a after sub-paragraph (3)(d) there shall be inserted the following paragraphs— da any grandchild of the settlor or of the settlor’s spouse; db the spouse of any such grandchild; b in sub-paragraph (3)(e), for “(d)" there shall be substituted “ (db) ” . 2 For sub-paragraph (7) of that paragraph, there shall be substituted the following sub-paragraph— 7 In this paragraph— “ child ” includes a stepchild; and “ grandchild ” means a child of a child. 3 Schedule 22 to this Act (which makes transitional provision and consequential amendments in connection with the provisions of this section) shall have effect. 4 The preceding provisions of this section and Schedule 22 to this Act apply for the year 1998-99 and subsequent years of assessment and shall be deemed to have applied for the year 1997-98. Charge on settlors of pre-19th March 1991 settlements. 132 1 In paragraph 9 of Schedule 5 to the Taxation of Chargeable Gains Act 1992 (which sets out when a settlement is a qualifying settlement for the purposes of the attribution of gains to the settlor), after sub-paragraph (1) there shall be inserted the following sub-paragraphs— 1A Subject to sub-paragraph (1B) below, a settlement created before 19th March 1991 is a qualifying settlement for the purposes of section 86 and this Schedule in— a the year 1999-00, and b subsequent years of assessment. 1B Where a settlement created before 19th March 1991 is a protected settlement immediately after the beginning of 6th April 1999, that settlement shall be treated as a qualifying settlement for the purposes of section 86 and this Schedule in a year of assessment mentioned in sub-paragraph (1A)(a) or (b) above only if— a any of the five conditions set out in subsections (3) to (6A) below becomes fulfilled as regards the settlement in that year; or b any of those five conditions became so fulfilled in any previous year of assessment ending after 19th March 1991. 2 Sub-paragraph (2) of that paragraph shall not have effect for the purpose of determining whether any settlement is a qualifying settlement in the year 1999-00 or any subsequent year of assessment. 3 After sub-paragraph (6) of that paragraph there shall be inserted the following sub-paragraph— 6A The fifth condition is that the settlement ceases to be a protected settlement at any time on or after 6th April 1999. 4 After sub-paragraph (10) of that paragraph there shall be inserted the following sub-paragraphs— 10A Subject to sub-paragraph (10B) below, a settlement is a protected settlement at any time in a year of assessment if at that time the beneficiaries of that settlement are confined to persons falling within some or all of the following descriptions, that is to say— a children of a settlor or of a spouse of a settlor who are under the age of eighteen at that time or who were under that age at the end of the immediately preceding year of assessment; b unborn children of a settlor, of a spouse of a settlor, or of a future spouse of a settlor; c future spouses of any children or future children of a settlor, a spouse of a settlor or any future spouse of a settlor; d a future spouse of a settlor; e persons outside the defined categories. 10B For the purposes of sub-paragraph (10A) above a person is outside the defined categories at any time if, and only if, there is no settlor by reference to whom he is at that time a defined person in relation to the settlement for the purposes of paragraph 2(1) above. 10C For the purposes of sub-paragraph (10A) above a person is a beneficiary of a settlement if— a there are any circumstances whatever in which relevant property which is or may become comprised in the settlement is or will or may become applicable for his benefit or payable to him; b there are any circumstances whatever in which relevant income which arises or may arise under the settlement is or will or may become applicable for his benefit or payable to him; c he enjoys a benefit directly or indirectly from any relevant property comprised in the settlement or any relevant income arising under the settlement. 10D In sub-paragraph (10C) above— “ relevant property ” means property originating from a settlor; and “ relevant income ” means income originating from a settlor. 5 In construing section 86(1)(e) of the Taxation of Chargeable Gains Act 1992 (which specifies the amount by reference to which a charge arises under that section) as regards a particular year of assessment and in relation to a settlement created before 19th March 1991 which— a is a qualifying settlement in the year 1999-00, but b was not a qualifying settlement in any earlier year of assessment, no account shall be taken of disposals made before 6th April 1999 (whether for the purpose of arriving at gains or for the purpose of arriving at losses). 6 Schedule 23 (which makes transitional provision in connection with the coming into force of this section) shall have effect. Groups of companies etc. Transfer within group to investment trust. 133 1 After section 101 of the Taxation of Chargeable Gains Act 1992, there shall be inserted the following section— Transfer within group to investment trust. 101A 1 This section applies where— a an asset has been disposed of to a company (the “acquiring company") and the disposal has been treated by virtue of section 171(1) as giving rise to neither a gain nor a loss, b at the time of the disposal the acquiring company was not an investment trust, and c the conditions set out in subsection (2) below are satisfied by the acquiring company. 2 Those conditions are satisfied by the acquiring company if— a it becomes an investment trust for an accounting period beginning not more than 6 years after the time of the disposal, b at the beginning of that accounting period, it owns, otherwise than as trading stock— i the asset, or ii property to which a chargeable gain has been carried forward from the asset on a replacement of business assets, c it has not been an investment trust for any earlier accounting period beginning after the time of the disposal, and d at the time at which it becomes an investment trust, there has not been an event by virtue of which it falls by virtue of section 179(3) or 101C(3) to be treated as having sold, and immediately reacquired, the asset at the time specified in subsection (3) below. 3 The acquiring company shall be treated for all the purposes of this Act as if immediately after the disposal it had sold, and immediately reacquired, the asset at its market value at that time. 4 Any chargeable gain or allowable loss which, apart from this subsection, would accrue to the acquiring company on the sale referred to in subsection (3) above shall be treated as accruing to it immediately before the end of the last accounting period to end before the beginning of the accounting period for which the acquiring company becomes an investment trust. 5 For the purposes of this section a chargeable gain is carried forward from an asset to other property on a replacement of business assets if— a by one or more claims under sections 152 to 158, the chargeable gain accruing on a disposal of the asset is reduced, and b as a result an amount falls to be deducted from the expenditure allowable in computing a gain accruing on the disposal of the other property. 6 For the purposes of this section an asset acquired by the acquiring company shall be treated as the same as an asset owned by it at a later time if the value of the second asset is derived in whole or in part from the first asset; and, in particular, assets shall be so treated where— a the second asset is a freehold and the first asset was a leasehold; and b the lessee has acquired the reversion. 7 Where under this section a company is to be treated as having disposed of and reacquired an asset— a all such recomputations of liability in respect of other disposals, and b all such adjustments of tax, whether by way of assessment or by way of discharge or repayment of tax, as may be required in consequence of the provisions of this section shall be carried out. 8 Notwithstanding any limitation on the time for making assessments, any assessment to corporation tax chargeable in consequence of this section may be made at any time within 6 years after the end of the accounting period referred to in subsection (2)(a) above. 2 In section 179 of that Act (company ceasing to be a member of a group), after subsection (2B) there shall be inserted the following subsection— 2C This section shall not have effect as respects any asset if, before the time when the chargeable company ceases to be a member of the group or, as the case may be, the second group, an event has already occurred by virtue of which the company falls by virtue of section 101A(3) to be treated as having sold and immediately reacquired the asset at the time specified in subsection (3) below. 3 Subsections (1) and (2) above apply to any company which becomes an investment trust for an accounting period beginning on or after 17th March 1998. Transfer of company’s assets to venture capital trust. 134 1 In subsection (4) of section 139 of the Taxation of Chargeable Gains Act 1992 (reconstruction or amalgamation involving transfer of a business), after “investment trust" there shall be inserted “ or a venture capital trust. ” 2 After the section 101A of that Act inserted by section 133 above there shall be inserted the following section— Transfer of company’s assets to venture capital trust. 101B 1 Where section 139 has applied on the transfer of a company’s business (in whole or in part) to a company which at the time of the transfer was not a venture capital trust, then if— a at any time after the transfer the company becomes a venture capital trust by virtue of an approval for the purposes of section 842AA of the Taxes Act; and b at the time as from which the approval has effect the company still owns any of the assets of the business transferred, the company shall be treated for all the purposes of this Act as if immediately after the transfer it had sold, and immediately reacquired, the assets referred to in paragraph (b) above at their market value at that time. 2 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 time mentioned in subsection (1)(b) above. 3 This section does not apply if at the time mentioned in subsection (1)(b) above there has been an event by virtue of which the company falls by virtue of section 101(1) to be treated as having sold, and immediately reacquired, the assets immediately after the transfer referred to in subsection (1) above. 4 Notwithstanding any limitation on the time for making assessments, any assessment to corporation tax chargeable in consequence of this section may, in a case in which the approval mentioned in subsection (1)(a) above has effect as from the beginning of an accounting period, be made at any time within 6 years after the end of that accounting period. 5 Where under this section a company is to be treated as having disposed of, and reacquired, an asset of a business, all such recomputations of liability in respect of other disposals and all such adjustments of tax, whether by way of assessment or by way of discharge or repayment of tax, as may be required in consequence of the provisions of this section shall be carried out. 3 After subsection (1A) of section 101 of that Act there shall be inserted the following subsection— 1B This section does not apply if at the time at which the company becomes an investment trust there has been an event by virtue of which it falls by virtue of section 101B(1) to be treated as having sold, and immediately reacquired, the assets immediately after the transfer referred to in subsection (1) above. 4 Subsection (1) above applies to transfers made on or after 17th March 1998. 5 Subsections (2) and (3) above apply to a company in respect of which an approval for the purposes of Part 6 of the Income Tax Act 2007 (venture capital trusts) has effect as from a time falling on or after 17th March 1998. Transfer within group to venture capital trust. 135 1 In section 171 of the Taxation of Chargeable Gains Act 1992 (transfers within a group), after the word “or" at the end of paragraph (c) of subsection (2) there shall be inserted the following paragraph— cc a disposal by or to a venture capital trust; or 2 After the section 101B of that Act inserted by section 134 above there shall be inserted the following section— Transfer within group to venture capital trust. 101C 1 This section applies where— a an asset has been disposed of to a company (the “acquiring company") and the disposal has been treated by virtue of section 171(1) as giving rise to neither a gain nor a loss, b at the time of the disposal the acquiring company was not a venture capital trust, and c the conditions set out in subsection (2) below are satisfied by the acquiring company. 2 Those conditions are satisfied by the acquiring company if— a it becomes a venture capital trust by virtue of an approval having effect as from a time (the “time of approval") not more than 6 years after the time of the disposal, b at the time of approval the company owns, otherwise than as trading stock— i the asset, or ii property to which a chargeable gain has been carried forward from the asset on a replacement of business assets, c it has not been a venture capital trust at any earlier time since the time of the disposal, and d at the time of approval, there has not been an event by virtue of which it falls by virtue of section 179(3) or 101A(3) to be treated as having sold, and immediately reacquired, the asset at the time specified in subsection (3) below. 3 The acquiring company shall be treated for all the purposes of this Act as if immediately after the disposal it had sold, and immediately reacquired, the asset at its market value at that time. 4 Any chargeable gain or allowable loss which, apart from this subsection, would accrue to the acquiring company on the sale referred to in subsection (3) above shall be treated as accruing to it immediately before the time of approval. 5 Subsections (5) to (7) of section 101A apply for the purposes of this section as they apply for the purposes of that section. 6 Notwithstanding any limitation on the time for making assessments, any assessment to corporation tax chargeable in consequence of this section may, in a case in which the time of approval is the time at which an accounting period of the company begins, be made at any time within 6 years after the end of that accounting period. 7 Any reference in this section to an approval is a reference to an approval for the purposes of section 842AA of the Taxes Act. 3 In section 179 of that Act (company ceasing to be a member of a group), after the subsection (2C) inserted by section 133 above there shall be inserted the following subsection— 2D This section shall not have effect as respects any asset if, before the time when the chargeable company ceases to be a member of the group or, as the case may be, the second group, an event has already occurred by virtue of which the company falls by virtue of section 101C(3) to be treated as having sold and immediately reacquired the asset at the time specified in subsection (3) below. 4 Subsection (1) above applies to disposals made on or after 17th March 1998. 5 Subsections (2) and (3) above apply to a company in respect of which an approval for the purposes of Part 6 of the Income Tax Act 2007 (venture capital trusts) has effect as from a time falling on or after 17th March 1998. Incorporated friendly societies. 136 1 In section 170(9) of the Taxation of Chargeable Gains Act 1992 (meaning of “ company ” in sections 170 to 181), after the word “and" at the end of paragraph (c) there shall be inserted the following paragraph— cc an incorporated friendly society within the meaning of the Friendly Societies Act 1992; and . 2 In subsection (2) of section 171 of that Act (transfers within a group), after the word “or" at the end of the paragraph (cc) inserted by section 135 above there shall be inserted the following paragraph— cd a disposal by or to a qualifying friendly society; or 3 After subsection (4) of that section there shall be inserted the following subsection— 5 In subsection (2)(cd) above “ qualifying friendly society ” means a company which is a qualifying society for the purposes of section 461B of the Taxes Act (incorporated friendly societies entitled to exemption from income tax and corporation tax on certain profits). 4 Subsection (1) above applies for the purpose of determining, in relation to times on and after 17th March 1998, whether a friendly society is a company within the meaning of the provisions of sections 170 to 181 of the Taxation of Chargeable Gains Act 1992. 5 Subsections (2) and (3) above apply in relation to disposals made on or after 17th March 1998. Pre-entry gains. 137 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 In subsection (3) of section 213 of that Act (carry back of losses in respect of deemed annual disposal by insurance companies)— a at the beginning there shall be inserted “Subject to subsection (3A) below,"; and b for the “and" at the end of paragraph (c) there shall be substituted— ca none of the intervening accounting periods is an accounting period in which the company joined a group of companies, and . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Subsection (3) above has effect in relation to any intervening period ending on or after 17th March 1998. 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pre-entry losses. 138 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . De-grouping charges. 139 1 In section 179(2B) of the Taxation of Chargeable Gains Act 1992 (cases where there is a connection between groups successively left by a company)— a in paragraph (b), for the words from “company which" to “its" there shall be substituted “ person or persons who control the company mentioned in paragraph (a) above or who have had it under their ” ; b in paragraph (c), for the words from “company which has" to “its" there shall be substituted “ person or persons who have, at any time in that period, had under their ” ; and c in that paragraph, for “fallen", wherever it occurs, there shall be substituted “ been a person falling ” . 2 Subsection (1) above has effect in relation to a company in any case in which the time of the company’s ceasing to be a member of the second group is on or after 17th March 1998. Abolition of reliefs Phasing out of retirement relief. 140 1 In Schedule 6 to the Taxation of Chargeable Gains Act 1992 (retirement relief etc.), paragraph 13(1) (amount available for relief: basic rule) shall have effect, in relation to qualifying disposals in a year of assessment specified in the first column of the following Table, as if— a for the references to £250,000 there were substituted references to the amount specified in the second column of that Table; and b for the reference to £1 million there were substituted a reference to the amount specified in the third column of that Table. Table Year £250,000 £1 million 1999-00 £200,000 £800,000 2000-01 £150,000 £600,000 2001-02 £100,000 £400,000 2002-03 £50,000 £200,000 2 The following provisions, namely— a section 163 of that Act (relief for disposals by individuals on retirement from family business), b section 164 of that Act (other retirement relief), and c Schedule 6 to that Act, shall cease to have effect in relation to disposals in the year 2003-04 and subsequent years of assessment. 3 In section 157 of that Act (trade carried on by family company), for the words “within the meaning of Schedule 6" there shall be substituted the words “ that is to say, a company the voting rights in which are exercisable, as to not less than 5 per cent., by him ” . 4 In subsection (8) of section 165 of that Act (relief for gifts of business assets), for paragraph (a) there shall be substituted the following paragraphs— a “ personal company ”, in relation to an individual, means a company the voting rights in which are exercisable, as to not less than 5 per cent., by that individual; aa “ holding company ”, “ trading company ” and “ trading group ” have the meanings given by paragraph 22 of Schedule A1; and . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Subsections (3) to (5) above have effect in relation to the year 2003-04 and subsequent years of assessment. Abolition of certain other CGT reliefs. 141 1 The following provisions of the Taxation of Chargeable Gains Act 1992 shall cease to have effect, namely— a Chapter IA of Part V (roll-over relief on re-investment); and b sections 254 and 255 (relief for debts on qualifying corporate bonds). 2 In subsection (1) above— a paragraph (a) has effect in relation to acquisitions made on or after 6th April 1998; and b paragraph (b) has effect in relation to loans made on or after 17th March 1998. Part IV Inheritance Tax etc. Property of historic interest etc. 142 Schedule 25 to this Act (which makes provision about the designation of property of historic interest, etc. and about undertakings in relation to such property) shall have effect. Removal of exemption for gifts for public benefit. 143 1 Section 26 of the Inheritance Tax Act 1984 (gifts for public benefit) shall not apply to any transfer of value made on or after 17th March 1998. 2 Accordingly, in that Act, in relation to any transfer of value made on or after 17th March 1998— a in sections 23(5) and 29A(6) (gifts to charities and abatement of exemptions), for the words “25 or 26", in each place where they occur, there shall be substituted “ or 25 ” ; and b in section 29(5) (exemptions in loan cases), for “to 26", “25 or 26" and “25(2) and 26(7)" there shall be substituted, respectively, “ to 25 ” , “ or 25 ” and “ and 25(2) ” . 3 In relation to any property becoming the property of any person on or after 17th March 1998, in section 56(4) and (7) of that Act (exclusion of exemptions in relation to the acquisition of reversionary interests), for the words “to 26", in each place where they occur, there shall be substituted “ to 25 ” . 4 In section 76 of that Act (tax not charged on property becoming property held for charitable purposes etc.)— a paragraph (d) of subsection (1) and subsection (2) shall cease to have effect, and the word “ or ” shall be inserted at the end of paragraph (b) of subsection (1); b in subsection (3), for “to (d)" there shall be substituted “ to (c) ” ; and c in subsections (6) and (8), for the words “(c) or (d)", in each place where they occur, there shall be substituted “ or (c) ” . 5 Subsection (4) above has effect in relation to property which ceases to be relevant property, or to be property to which any of sections 70 to 74 of the Inheritance Tax Act 1984 or paragraph 8 of Schedule 4 to that Act applies, on or after 17th March 1998. 6 In relation to any property becoming the property of a body on a transfer of value made on or after 17th March 1998, in section 161(2)(b) of that Act (related property), for “25 or 26" there shall be substituted “ or 25 ” . 7 In relation to any disposal on or after 17th March 1998, in section 258(2) of the Taxation of Chargeable Gains Act 1992 (gains on disposal of works of art etc.), in paragraph (a), for “1984 Act" there shall be substituted “ Inheritance Tax Act 1984 (“the 1984 Act") ” . Maintenance funds for historic buildings, etc. 144 1 In section 27 of the Inheritance Tax Act 1984 (exemption for transfers into maintenance funds for historic buildings etc.), at the beginning of subsection (1) there shall be inserted “ Subject to subsection (1A) below, ” and after that subsection there shall be inserted the following subsection— 1A Subsection (1) above does not apply in the case of a direction given after the time of the transfer unless the claim for the direction (if it is not made before that time) is made no more than two years after the date of that transfer, or within such longer period as the Board may allow. 2 This section has effect in relation to transfers of value made on or after 17th March 1998. Accounting for property accepted in satisfaction of tax. 145 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Part V Other Taxes Insurance premium tax Travel insurance: higher rate tax. 146 1 Schedule 6A to the Finance Act 1994 (premiums liable to tax at the higher rate) shall be amended as follows. 2 For paragraph 4 (travel insurance) there shall be substituted— Travel insurance 4 1 A premium under a taxable insurance contract falls within this paragraph if it is in respect of the provision of cover against travel risks for a person travelling. 2 Where— a a contract of insurance provides cover against both travel risks and risks other than travel risks, b the premium attributable to the cover against travel risks does not exceed 10 per cent. of the total premium payable under the contract, and c the contract does not provide cover for a person travelling against travel risks falling within two or more of the paragraphs of sub-paragraph (3) below, the premium, so far as attributable to the cover against travel risks, does not fall within this paragraph by virtue of sub-paragraph (1) above. 3 The travel risks mentioned in sub-paragraph (2)(c) above are— a liability in respect of cancellation of travel or of accommodation arranged in connection with travel; b delayed or missed departure; c curtailment of travel or of the use of accommodation arranged in connection with travel; d loss or delayed arrival of baggage; e personal injury or illness or expenses of repatriation. 4 A premium does not fall within this paragraph by virtue of sub-paragraph (1) above if it is payable under a taxable insurance contract relating to a motor vehicle and is attributable to cover of the kind generally known as— a fully comprehensive, b third party, fire and theft, c third party, or d roadside assistance, or if it is payable under a taxable insurance contract relating to a caravan, boat or aircraft and is attributable to cover of a description broadly corresponding to any of those set out in paragraphs (a) to (d) above (so far as applicable) provided in respect of the caravan, boat or aircraft for a period of at least one month for the person travelling. 5 In this paragraph— “ person travelling ” includes a person intending to travel; “ travel risks ” means risks associated with, or related to, travel or intended travel— outside the United Kingdom, by air within the United Kingdom, within the United Kingdom in connection with travel falling within paragraph (a) or (b) above, or which involves absence from home for at least one night, or risks to which a person travelling may be exposed during, or at any place at which he may be in the course of, any such travel. 3 Except as provided by subsection (4) below, subsections (1) and (2) above have effect in relation to a premium which falls to be regarded for the purposes of Part III of the Finance Act 1994 as received under a taxable insurance contract by an insurer on or after 1st August 1998. 4 Subsections (1) and (2) above do not have effect in relation to a premium if the premium— a is in respect of a contract made before 1st August 1998; and b falls, by virtue of regulations under section 68 of the Finance Act 1994 (special accounting scheme), to be regarded for the purposes of Part III of that Act as received under the contract by the insurer on a date before 1st February 1999. 5 In the application of sections 67A to 67C of the Finance Act 1994 in relation to the increase in insurance premium tax effected by this section and the exception from that increase— a the announcement relating to that increase, as described in section 67A(1), and to that exception, as described in section 67B(1), shall be taken to have been made on 17th March 1998; b “ the date of the change ” is 1st August 1998; and c “ the concessionary date ” is 1st February 1999. Taxable intermediaries. 147 1 Section 52A of the Finance Act 1994 (certain fees to be treated as premiums under higher rate contracts) shall be amended as follows. 2 In subsection (5) (which defines a “taxable intermediary" as a person falling within subsection (6) of that section etc) after “subsection (6)" there shall be inserted “ or (6A) ” . 3 For subsections (6) and (7) there shall be substituted— 6 A person falls within this subsection if the higher rate contract mentioned in subsection (1) above falls within paragraph 2 or 3 of Schedule 6A to this Act (motor cars or motor cycles, or relevant goods) and the person is— a within the meaning of the paragraph in question, a supplier of motor cars or motor cycles or, as the case may be, of relevant goods; or b a person connected with a person falling within paragraph (a) above; or c a person who in the course of his business pays— i the whole or any part of the premium received under that contract, or ii a fee connected with the arranging of that contract, to a person falling within paragraph (a) or (b) above. 6A A person falls within this subsection if the higher rate contract mentioned in subsection (1) above falls within paragraph 4 of Schedule 6A to this Act (travel insurance) and the person is— a the insurer under that contract; or b a person through whom that contract is arranged in the course of his business; or c a person connected with the insurer under that contract; or d a person connected with a person falling within paragraph (b) above; or e a person who in the course of his business pays— i the whole or any part of the premium received under that contract, or ii a fee connected with the arranging of that contract, to a person falling within any of paragraphs (a) to (d) above. 4 In subsection (9) (definitions) the definition of “tour operator" and “travel agent" shall be omitted. 5 The amendments made by this section have effect in relation to payments in respect of fees charged on or after 1st August 1998. Landfill tax Provisional collection of landfill tax. 148 1 In section 1(1) of the Provisional Collection of Taxes Act 1968 (taxes in relation to which resolutions may have temporary statutory effect), after “insurance premium tax," there shall be inserted “ landfill tax, ” . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stamp duty Stamp duty on conveyance or transfer on sale. 149 1 Section 55 of the Finance Act 1963 and section 4 of the Finance Act Northern Ireland) 1963 (both of which provide for rates of stamp duty on conveyance or transfer on sale) shall each be amended as follows. 2 In subsection (1)(d) (rate of £1.50p for every £100 etc where consideration does not exceed £500,000 and the instrument is certified at that amount) for “£1.50p" there shall be substituted “ £2 ” . 3 In subsection (1)(e) (rate of £2 for every £100 etc) for “£2" there shall be substituted “ £3 ” . 4 This section shall apply to instruments executed on or after 24th March 1998, except where the instrument in question is executed in pursuance of a contract made on or before 17th March 1998. 5 This section shall be deemed to have come into force on 24th March 1998. Relief from double stamp duties etc. 150 1 Where an instrument which is chargeable with stamp duty in Great Britain and in Northern Ireland has been stamped in either of those parts of the United Kingdom— a the instrument shall, to the extent of the duty it bears, be deemed to be stamped in the other part of the United Kingdom, but b if the stamp duty chargeable on the instrument in that other part of the United Kingdom exceeds the stamp duty chargeable on the instrument in the part of the United Kingdom in which it has been stamped, the instrument shall not be deemed to have been duly stamped in that other part of the United Kingdom unless and until stamped in accordance with the law which has effect in that part of the United Kingdom with a stamp denoting an amount equal to the excess. 2 An instrument which, by virtue of paragraph (b) of subsection (1) above, is not deemed to have been duly stamped in a part of the United Kingdom unless and until stamped with a stamp denoting an amount equal to the excess mentioned in that paragraph may, notwithstanding anything in section 15 of the Stamp Act 1891, be stamped with such a stamp without payment of any penalty at any time within 30 days after it has first been received in that part of the United Kingdom. 3 In section 22 of the Stamp Duties Management Act 1891 (discontinuance of dies) for the words from “London" to “Gazettes" there shall be substituted “ London, Edinburgh and Belfast Gazettes ” . 4 Section 29 of the Government of Ireland Act 1920 (the provisions of which are either spent or re-enacted with modifications in subsection (1) above) shall cease to have effect. 5 The saving in Part I of Schedule 6 to the Northern Ireland Constitution Act 1973 (repeals) for orders made under section 69 of the Government of Ireland Act 1920 shall cease to have effect in relation to Part IV of the Government of Ireland (Adaptation of the Taxing Acts) Order 1922 (the provisions of which are either spent or re-enacted with modifications in subsections (2) and (3) above). Stamp duty reserve tax Depositary receipts and clearance services: exchanges of shares. 151 1 In section 95 of the Finance Act 1986 (depositary receipts; exceptions) in subsection (3) (exchanges) after paragraph (b) there shall be added— “ and the shares in company Y are held under a depositary receipt scheme. ” 2 At the end of that section there shall be added— 5 For the purposes of subsection (3) above, the cases where shares are held under a depositary receipt scheme are those cases where, in pursuance of an arrangement,— a a depositary receipt for chargeable securities has been, or is to be, issued by a person falling within section 93(2) above in respect of the shares in question or shares of the same kind and amount; and b the shares in question are held by that person, or by a person whose business is or includes holding chargeable securities as nominee or agent for that person, towards the eventual satisfaction of the entitlement of the receipt’s holder to receive chargeable securities. 6 Where an arrangement is entered into under which— a shares in a company (company X) are issued to persons in respect of their holdings of shares in another company (company Y), and b the shares in company Y are cancelled, the issue shall be treated for the purposes of subsection (3) above as an issue by company X in exchange for the shares in company Y. 7 In this section “ depositary receipt for chargeable securities ” has the same meaning as in section 93 above (see section 94 above). 3 In section 97 of the Finance Act 1986 (clearance services: exceptions) in subsection (4) (exchanges) after paragraph (b) there shall be added— “ and the shares in company Y are held under a clearance services scheme. ” 4 At the end of that section there shall be added— 6 For the purposes of subsection (4) above, the cases where shares are held under a clearance services scheme are those cases where— a an arrangement falling within paragraph (a) of subsection (1) of section 96 above has been entered into; and b in pursuance of that arrangement, the shares are held by the person referred to in that paragraph as A or by a person whose business is or includes holding chargeable securities as nominee for that person. 7 Where an arrangement is entered into under which— a shares in a company (company X) are issued to persons in respect of their holdings of shares in another company (company Y), and b the shares in company Y are cancelled, the issue shall be treated for the purposes of subsection (4) above as an issue by company X in exchange for the shares in company Y. 5 In section 99(10) of the Finance Act 1986 (which makes provision in relation to the interpretation of “ chargeable securities ” in sections 93, 94, 96 and 97A)— a after “94," there shall be inserted “ 95, ” ; and b after “96" there shall be inserted “ , 97 ” . 6 This section applies where the issue by company X referred to in section 95(3) or (6) or 97(4) or (7) of the Finance Act 1986 is an issue on or after 1st May 1998. Petroleum revenue tax etc. Gas valuation. 152 1 Paragraph 3A of Schedule 3 to the Oil Taxation Act 1975 (market value of light gases) shall have effect, and be deemed always to have had effect, with the insertion of the following sub-paragraph after sub-paragraph (3)— 3A The circumstances referred to in sub-paragraph (1) above include— a the timing of the making, and of any subsequent variations, of the actual contract or other arrangements under which the disposal or appropriation was made; b the terms of that contract or, as the case may be, of those arrangements, and the terms of any such variations; and c the extent to which the circumstances to which regard is to be had by virtue of paragraphs (a) and (b) above are circumstances that might reasonably have been expected to exist in the case of a contract satisfying the conditions specified in sub-paragraph (2) above. 2 Paragraph 12 of Schedule 2 to the Oil Taxation Act 1983 (purchase of oil at place of extraction) shall have effect and, in relation to light gases disposed of or appropriated at any time on or after 3rd May 1994, be deemed to have had effect— a with the substitution, for the words “ paragraphs (a) to (c) ” in sub-paragraph (2), of the words “paragraphs (a) to (cb)"; and b with the substitution for the words from “2(5)(b)" to “ length), ” in sub-paragraph (5) of the words “2(5)(b) or (ca) of the principal Act (oil disposed of otherwise than in sales at arm’s length),". 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gas levy Reduction and abolition of gas levy. 153 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dumping duties Repeal of Customs Duties (Dumping and Subsidies) Act 1969. 154 The Customs Duties (Dumping and Subsidies) Act 1969 (which confers powers on the Secretary of State, exercisable in accordance with section 6(5) of the Finance Act 1978, to charge duties in respect of dumping and to offset subsidies) shall cease to have effect. Part VI Miscellaneous and Supplemental Fiscal stability Code for fiscal stability. 155 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annual Budget documents. 156 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplementary powers of the Comptroller and Auditor General. 157 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Government borrowing Treasury’s position regarding their own securities. 158 1 This section applies to securities issued by or on behalf of the Treasury, here referred to as Treasury securities. 2 Any powers which relate to Treasury securities and which are conferred on the Treasury in a capacity other than issuer may be exercised by them, and no rule of law preventing a person contracting with himself shall prevent them exercising the powers. 3 The powers referred to in subsection (2) above include powers to acquire, hold and transfer securities and to make agreements with regard to them. 4 If Treasury securities are acquired under powers conferred on the Treasury, until they are transferred or redeemed they shall be treated as held by the persons for the time being constituting the Treasury. Treasury bills. 159 1 In section 8 of the Treasury Bills Act 1877 (mode of issue of Treasury bills) the following shall be substituted for paragraph (1)— 1 Treasury bills shall be issued by the Treasury (either directly or through such agent as the Treasury think fit). 2 This section shall apply in relation to issues made on or after such day as the Treasury may appoint by order made by statutory instrument. National loans. 160 Schedule 26 to this Act (national loans) shall have effect. Non-FOTRA securities. 161 1 Subject to the following provisions of this section, any gilt-edged security issued before 6th April 1998 without FOTRA conditions shall be treated in relation to times on or after that date as if— a it were a security issued with the post-1996 Act conditions; and b those conditions had been authorised in relation to the issue of that security by virtue of section 22 of the Finance (No. 2) Act 1931. 2 Where a gilt-edged security falls to be treated as mentioned in subsection (1) above that treatment shall have effect— a for the purposes of Chapter 2 of Part 12 of the Income Tax Act 2007 (accrued income profits) in relation only to accrued income profits which a person is treated as making under section 628(5) or 630(2) of that Act on or after 6th April 1998; b for the other purposes of the Tax Acts, in relation only to payments of interest falling due on or after that date; and c for the purposes of the Inheritance Tax Act 1984, in relation only to a determination of whether property is excluded property at a time falling on or after that date. 3 No charge to tax shall be treated as arising under section 65 of the Inheritance Tax Act 1984 (property becoming excluded property) by reason only of the coming into force of this section. 4 In this section “ FOTRA conditions ” means any such conditions about exemption from taxation as are authorised in relation to the issue of a gilt-edged security by virtue of section 22 of the Finance (No. 2) Act 1931. 5 In this section “ the post-1996 Act conditions ” means the FOTRA conditions with which 7.25% Treasury Stock 2007 was first issued by virtue of section 22 of the Finance (No. 2) Act 1931. 6 In this section “ gilt-edged securities ” means any securities which are gilt-edged securities for the purposes of the Taxation of Chargeable Gains Act 1992. 7 This section does not apply to any 3½% War Loan 1952 Or After which was issued with a condition authorised by virtue of section 47 of the Finance (No. 2) Act 1915. Accounting statements relating to National Savings. 162 1 Subject to subsection (2) below, in each of the following provisions (which provide for annual statements of account as respects years ending with 31st December to be prepared in relation to deposits with the National Savings Bank), that is to say— a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b section 120(4) of the Finance Act 1980 (investment deposits), for “31st December" there shall be substituted “ 31st March ” . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 In section 19(2) of the National Savings Bank Act 1971 (delivery of statement under section 19(1) to the Comptroller and Auditor General), for the words from “before the end of May" to “that year" there shall be substituted “ before the end of August next following the end of any period for which a statement falls to be prepared under subsection (1) above, transmit the statement for that period ” . 4 In section 20 of that Act (adjustment of balances)— a for “year ending with 31st December" there shall be substituted “ period as respects which a statement falls to be prepared under section 19(1) of this Act ” ; b for the words “the year", in each place where they occur, there shall be substituted “ that period ” ; and c for “any such year" there shall be substituted “ any such period ” . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The European single currency Adoption of single currency by other member States. 163 1 The Treasury may, to such extent as appears to them appropriate in connection with any of the matters falling within subsection (2) below, by regulations modify the application and effect as respects— a transactions in a currency other than sterling, b instruments denominated in such a currency, and c the bringing into account of amounts expressed in, or by reference to, such a currency, of any enactment or subordinate legislation relating to any matter for which the Commissioners for Her Majesty’s Revenue and Customs are responsible and to which section 7 of the Commissioners for Revenue and Customs Act 2005 (former Inland Revenue matters) applies. 2 The matters falling within this subsection are— a the adoption or proposed adoption by other member States of the single currency; and b any transitional measures or other arrangements applying or likely to apply in relation to the adoption of the single currency by other member States. 3 Without prejudice to the generality of subsection (1) above, the power conferred by that subsection includes power by regulations to provide— a for liabilities to pay amounts to the Commissioners of Inland Revenue under any enactment or subordinate legislation relating to taxation to be capable of being discharged, in accordance with the regulations, by payments in the single currency; b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 The power to make regulations under this section includes— a power to impose charges to taxation; b power to amend or repeal any enactment; and c power to make such incidental, supplemental, consequential and transitional provision as appears to the Treasury to be appropriate. 5 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. 6 In this section— “ enactment ” includes any enactment contained in this Act (other than this section) and any enactment passed after this Act; “ other member State ” means a member State other than the United Kingdom; “ subordinate legislation ” has the same meaning as in the Interpretation Act 1978. 7 References in this section to the adoption of the single currency are references to the adoption of the single currency in accordance with the Treaty establishing the European Community, and the reference in subsection (3)(a) above to that currency shall be construed accordingly. Supplemental Interpretation. 164 In this Act “ the Taxes Act 1988 ” means the Income and Corporation Taxes Act 1988. Repeals. 165 1 The enactments mentioned in Schedule 27 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 or referred to in the notes set out in that Schedule. Short title. 166 This Act may be cited as the Finance Act 1998.