Finance Act 1986

78Loan capital

(1)This section (which reproduces the effect of a resolution having statutory effect under section 50 of the [1973 c. 51.] Finance Act 1973 for the period beginning on 25th March 1986 and ending on 6th July 1986) shall be deemed to have had effect during, and only during, that period.

(2)The following provisions shall not apply—

(a)in section 62 of the [1963 c. 25.] Finance Act 1963, subsections (2) and (6) (commonwealth stock);

(b)in section 11 of the [1963 c. 22 (N.I.).] Finance Act (Northern Ireland) 1963, subsections (2) and (5) (commonwealth stock);

(c)section 29 of the [1967 c. 54.] Finance Act 1967 (local authority capital);

(d)section 6 of the [1967 c. 20 (N.I.).] Finance Act (Northern Ireland) 1967 (local authority capital);

(e)section 126 of the [1976 c. 40.] Finance Act 1976 (loan capital).

(3)Stamp duty under the heading "Bearer Instrument" in Schedule 1 to the [1891 c. 39.] Stamp Act 1891 shall not be chargeable on the issue of an instrument which relates to loan capital or on the transfer of the loan capital constituted by, or transferable by means of, such an instrument.

(4)Stamp duty shall not be chargeable on an instrument which transfers loan capital issued or raised by—

(a)the financial support fund of the Organisation for Economic Co-operation and Development,

(b)the Inter-American Development Bank, or

(c)an organisation which was a designated international organisation at the time of the transfer (whether or not it was such an organisation at the time the loan capital was issued or raised).

(5)Stamp duty shall not be chargeable on an instrument which transfers short-term loan capital.

(6)Where stamp duty under the heading "Conveyance or Transfer on Sale" in Schedule 1 to the Stamp Act 1891 is chargeable on an instrument which transfers loan capital, the rate at which the duty is charged under that heading shall be the rate of 50p for every £100 or part of £100 of the amount or value of the consideration for the sale to which the instrument gives effect.

(7)In this section "loan capital" means—

(a)any debenture stock, corporation stock or funded debt, by whatever name known, issued by a body corporate or other body of persons (which here includes a local authority and any body whether formed or established in the United Kingdom or elsewhere);

(b)any capital raised by such a body if the capital is borrowed or has the character of borrowed money, and whether it is in the form of stock or any other form;

(c)stock or marketable securities issued by the government of any country or territory outside the United Kingdom.

(8)In this section "short-term loan capital" means loan capital the date (or latest date) for the repayment of which is not more than 5 years after the date on which it is issued or raised.

(9)In this section "designated international organisation" means an international organisation designated for the purposes of section 126 of the [1984 c. 43.] Finance Act 1984 by an order made under subsection (1) of that section.

(10)In construing sections 80(3) and 81(3) of the [1985 c. 54.] Finance Act 1985 (definitions by reference to section 126 of the [1976 c. 40.] Finance Act 1976) the effect of this section shall be ignored.

(11)This section applies to any instrument which falls within section 60(1) of the [1963 c. 25.] Finance Act 1963 and is issued after 24th March 1986 and before 7th July 1986.

(12)This section applies to any instrument which falls within section 60(2) of that Act if the loan capital constituted by or transferable by means of it is transferred after 24th March 1986 and before 7th July 1986.

(13)This section applies, in the case of instruments not falling within section 60(1) or (2) of that Act, to any instrument which is executed after 24th March 1986 and before 7th July 1986, unless it is executed in pursuance of a contract made on or before 18th March 1986.

(14)In this section references to section 60(1) of the [1963 c. 25.] Finance Act 1963 include references to section 9(1)(a) of the [1963 c. 22 (N.I.).] Finance Act (Northern Ireland) 1963 and references to section 60(2) of the former Act include references to section 9(1 )(b) of the latter.