SCHEDULES

Section 2.

SCHEDULE 1Gaming Licence Duty

PART IAmount of Duty on Gaming Licence for 6 months

PART IISupplemental

Rateable value

1(1)The Commissioners may by regulations provide for the adjustment (by way of repayment or of a further charge of duty) of the duty charged on a gaming licence in any case where—

(a)there is an alteration of the valuation list affecting the hereditament consisting of or comprising the premises in respect of which the licence is granted, and

(b)that alteration comes into effect as respects the whole of the period of validity of the licence.

(2)Where a hereditament ceases to be one without a rateable value, regulations under this paragraph may require the appropriate adjustment by way of any further charge of duty notwithstanding that the alteration of the valuation list assigning a rateable value to the hereditament comes into effect as respects part only of the period of the validity of the licence, and the regulations may require the further charge of duty to be paid as if the alteration had come into effect as respects the whole of the period of validity of the said licence.

(3)In this Schedule—

• " rateable value ", in relation to any hereditament, means, without prejudice to sub-paragraph (1) above, the rateable value shown in the valuation list as for the time being in force,

• " hereditament ", in relation to Scotland, means lands and heritages,

• " valuation list ", in relation to Scotland, means valuation roll.

Gaming tables

2(1)For the purpose of determining the appropriate licence under Part I of this Schedule, account shall be taken not only of all gaming tables in use when any game to which the principal section applies is played, but also—

(a)of all other gaming tables on the premises, whether or not available for use, or prepared for use, and whether for the game played, or for any other game to which the principal section applies, and

(b)of any other tables or other equipment on the premises which can readily be converted into gaming tables.

(2)For the said purposes " table " includes any surface provided or used for playing any game to which the principal section applies, or for hazarding any money or token in connection with any game to which the principal section applies.

(3)In arriving at the number of tables on any premises, any table exceeding the prescribed size shall count as two tables, or such greater number of tables as may be prescribed.

(4)In this paragraph "prescribed" means prescribed by regulations made by the Commissioners, and—

(a)the regulations prescribing the size of a table may take account not only of its area but also of any other measurements or characteristics,

(b)the regulations may make different provision in relation to different games, or in any other different circumstances.

Application for licence

3(1)An application for a gaming licence shall be made to the Commissioners not later than fourteen days before the date on which the licence is to be in force.

(2)A gaming licence shall be expressed to take effect on the first day of the period for which it is granted or the first day after the date of the application, whichever is the later.

(3)A gaming licence shall expire at the end of 31st March or, as the case may be, 30th September next after the date on which it is expressed to take effect.

Transfer of licence

4(1)The proper officer may, in such manner as the Commissioners may direct, and without any additional payment, transfer a gaming licence in respect of any premises to a successor in title to the interest in those premises of the person to whom the licence was granted.

(2)Where the holder of a gaming licence in respect of any premises dies, the proper officer may transfer the licence, in such manner as the Commissioners may direct, and without any additional payment, to some other person for the remainder of the period for which the licence was granted.

Surrender of licence

5If while a gaming licence is in force in respect of any premises, and not less than three months before the date when the licence is due to expire, the holder of the licence surrenders the licence to the proper officer and satisfies the proper officer that those premises will not be used on or after the date of surrender of the licence for the purpose of gaming by way of any game to which the principal section for the time being applies, he shall be entitled in respect of the period of validity of the licence unexpired at the date of surrender to repayment of one-half of the duty paid on the licence.

Amendment of licence

6(1)This paragraph has effect as respects the amendment of a gaming licence converting it into one in respect of which a greater amount of duty is payable.

(2)The holder of the gaming licence may at any time apply to the Commissioners for the licence to be so amended, and the proper officer shall, on payment of the additional duty specified below, amend the licence accordingly.

(3)The amount of the additional duty shall be the difference between the amount of duty payable on the licence as amended, and the amount so payable on the licence before amendment.

(4)Regulations under this Schedule may make provision with respect to the procedure for amending licences under this paragraph, and any such regulations may include provision—

(a)as to the method of amendment (that is to say, whether it is to be effected by endorsement of the licence, or by the issue of an amended licence, or otherwise), and

(b)as to the time at which a licence is to have effect as amended.

Payment of duty by cheque

7Section 234 of the [1952 c. 44.] Customs and Excise Act 1952 (which relates to payment for excise licences by cheque) shall apply to the duty on a gaming licence as if for the reference to a penalty of £50 there were substituted a reference to a penalty of £500.

Regulations

8(1)Without prejudice to any other provision of this Schedule, the Commissioners may make regulations providing for any matter for which provision appears to them to be necessary for the administration or enforcement of the duty on gaming licences, or for the protection of the revenue from that duty.

(2)Regulations under this paragraph may in particular include provision—

(a)for the furnishing to such persons or displaying in such manner of such information or records as the regulations may require by persons engaging or proposing to engage in any activity by reason of which they are or may be or become liable for duty, and by persons providing facilities for another to engage in such an activity or entering into any transaction with another in the course of any such activity of his ;

(b)for the keeping, preservation and production of accounts, records or other documents by persons engaging in any such activity ;

(c)for the inspection of the accounts, records and other documents of persons engaging or suspected of engaging in any such activity, and of premises or equipment used or suspected of being used by such persons for or in connection with any such activity and of any other premises where any such activity is carried on ;

(d)for requiring the licence to be displayed on the premises, and the production of the licence for inspection by the proper officer;

(e)for requiring gaming tables to be labelled or marked in the prescribed manner.

(3)Regulations under this Schedule shall be made by statutory instrument, which shall be subject to annulment in pursuance of a resolution of the Commons House of Parliament.

Offences

9(1)Subject to subsection (7) of the principal section, there is a contravention of subsection (8) of that section if on any occasion, after 30th September 1970, gaming takes place by way of any game to which the principal section for the time being applies unless a provider of the premises on which the gaming takes place is the holder of a gaming licence which is for the time being in force, and which is the appropriate licence having regard to—

(a)the rateable value of the hereditament consisting of or comprising the premises, and

(b)the number of gaming tables.

(2)If there is a contravention of the said subsection (8)—

(a)any provider of the premises and any person concerned in the organisation or management of the gaming shall each be liable—

(i)on summary conviction to a penalty of treble the amount of the duty on the appropriate gaming licence, or to imprisonment for a term not exceeding twelve months, or to both,

(ii)on conviction on indictment, to the like penalty, or to imprisonment for a term not exceeding two years, or to both, and

(b)in addition and without prejudice to any liability under paragraph (a) above, unless and until the appropriate gaming licence in respect of those premises is taken out during the period of six months (beginning with 1st October or 1st April) in which the offence was committed, an amount equal to the duty on the appropriate gaming licence, together with interest thereon from the date of the offence, shall become due and recoverable as a debt due to the Crown jointly and severally from all or any of the persons liable under paragraph (a) above.

(3)Any gaming tables or other things which are being used, or are available or prepared for use, in connection with gaming in respect of which an offence is committed under this paragraph shall be liable to forfeiture.

(4)In this paragraph "provider", in relation to any premises used for gaming, means any person having a right to control the admission of persons to those premises, whether or not he also has a right to control the admission of persons to the gaming.

10(1)If any person—

(a)contravenes or fails to comply with any of the provisions of regulations made under this Schedule, or

(b)obstructs any officer in the exercise of his functions in relation to the duty on gaming licences, or

(c)in connection with the duty on gaming licences, makes any statement which he knows to be false in a material particular or recklessly makes any statement which is false in a material particular, or, with intent to deceive, produces or makes use of any book, account, record, return or other document which is false in a material particular, or

(d)is knowingly concerned in, or in the taking of steps with a view to, the fraudulent evasion, by him or any other person, of gaming licence duty,

he shall be liable to a penalty of £500 or treble the amount of the duty which is unpaid or payment of which is sought to be avoided, as the case may be, whichever is the greater ; and where a person is convicted of an offence under paragraph (c) or (d) above, the court may, in lieu of or in addition to ordering him to pay the said penalty, order him to be imprisoned for a term not exceeding two years.

(2)Where a person is convicted under sub-paragraph (1) above in respect of a failure to comply with the provisions of regulations made under this Schedule and the failure continues after his conviction then, unless he has reasonable excuse for the continuance of the failure, he shall be guilty of a further offence under this paragraph and may, on conviction, be punished accordingly.

11Where an offence under paragraph 9 or paragraph 10 above has been committed by a body corporate, every person who at the time of the commission of the offence was a director, general manager, secretary or other similar officer of the body corporate, or was purporting to act in any such capacity, shall be deemed to be guilty of that offence unless he proves—

(a)in the case of an offence under paragraph 9, that he did not consent to, or connive at, the relevant contravention mentioned in the said paragraph 9(1), or

(b)in the case of an offence under paragraph 10, that the offence was committed without his consent or connivance,

and that he exercised all such diligence to prevent the contravention or, as the case may be, the commission of the offence as he ought to have exercised having regard to the nature of his functions in that capacity and in all the circumstances.

Inspection of premises

12(1)Any officer may (without payment) enter any premises in respect of which a licence under the [1968 c. 65.] Gaming Act 1968 is for the time being in force and inspect those premises and require any person who is concerned in the management of the premises, or who is on the premises and appears to the officer to have any responsibility whatsoever in respect of their management or of the control of the admission of persons thereto—

(a)to produce or secure the production of any gaming licence for the time being in force in respect of the premises, or

(b)to provide information with respect to any gaming which is being, or has been, carried on on the premises, and as to any gaming tables or other equipment on the premises which is or can be used for gaming.

(2)If the premises in respect of which the licence under the Gaming Act 1968 is for the time being in force form, for rating purposes, part only of a hereditament, the powers conferred by this paragraph shall be exercisable as respects each part of the hereditament.

Modification of agreements

13(1)Where a person who is granted a gaming licence in respect of any premises has before 1st October 1970 entered into an agreement with any other person whereby that other person is entitled to use those premises after that date for the purpose of gaming, and the consideration for that other person under that agreement does not take account of the additional duty payable under this Act, as compared with section 13 of the [1966 c. 18.] Finance Act 1966, the first-mentioned person shall be entitled to recover from that other person such amount, if any, not exceeding that additional amount of duty, in such manner as may be agreed between them (or, in default of such agreement, as may be determined by the appropriate court) to be fair in all the circumstances, having regard in particular to the extent, if any, to which while the licence is in force, the premises will be or are likely to be used otherwise than by that person for the purpose of gaming.

(2)In this paragraph " the appropriate court " means—

(a)where the premises in question are in England or Wales and the amount of the duty on the licence in question exceeds £5,000, the High Court,

(b)in any other case, the county court or, if the premises in question are situated in Scotland, the sheriff.

Beginner's licence under Finance Act 1966

14On surrender to the proper officer of a gaming licence granted before 1st October 1970 under paragraph 12 of Schedule 3 to the Finance Act 1966 so as to expire on 30th September 1971, the holder of the licence shall be entitled to repayment of three-quarters of the amount of the duty paid on the licence.

Application of ancillary provisions in Schedule 3 to Finance Act 1966

15(1)Paragraph 23 of Schedule 3 to the Finance Act 1966 (powers of entry and search) shall apply as if the reference to contravention of section 13 of that Act included a reference to a contravention of subsection (8) of the principal section.

(2)Paragraphs 24 and 25 of the said Schedule 3 (recovery of duty) shall apply as if references to paragraphs 8 and 21(1)(b) of that Schedule included references to paragraphs 1 and 9(2)(b) of this Schedule.

Consequential amendments of Gaming Act 1968

16(1)In paragraph 48(1) of Schedule 2 to the [1968 c. 65.] Gaming Act 1968 (cancellation of licence under that Act on conviction of certain offences), as amended by paragraph 30 of Schedule 11 to the [1969 c. 32.] Finance Act 1969 after the words " Finance Act 1969 " insert " or under paragraph 9 or 10 of Schedule 1 to the Finance Act 1970 ".

(2)In the following provisions of the Gaming Act 1968 (under which failure to pay gaming licence duty under section 13 of the Finance Act 1966 is a ground for refusal to grant, renew or transfer a licence or renew a registration) after " the Finance Act 1966 " insert " or section 2 of or Schedule 1 to the Finance Act 1970 ".

The said provisions are

• paragraph 20(1)(e) and paragraph 60(c) of Schedule 2.

• paragraph 9(e) of Schedule 3.

• paragraph 11(e) of Schedule 4.

(3)In Schedule 10 to the [1968 c. 65.] Gaming Act 1968, in paragraphs 3 and 4 (right of constable, without fee, to inspect registers) after " constable " insert " or officer of customs and excise ".

Section 5.

SCHEDULE 2Amendments of Law Relating to Customs and Excise

Amendments relating to tobacco

1Subject to such conditions as they see fit to impose, the Commissioners may remit or repay duty, or allow drawback, on tobacco in respect of which it is shown to their satisfaction that it is to be or has been used solely for purposes of research or experiment.

2The duties of excise under section 4 of the [1964 c. 49.] Finance Act 1964 on tobacco grown in the United Kingdom shall not be charged on tobacco which is grown by a person for his own consumption and in respect of which such conditions as the Commissioners see fit to impose are complied with.

3At the beginning of paragraph (a) of section 173(2) of the Act of 1952 (which prohibits the import of sweetened tobacco in an unmanufactured state) there shall be inserted the words " except as permitted by the Commissioners " , and in section 176(1) of that Act (which provides that a tobacco manufacturer shall not in manufacturing tobacco use any sweetening matter or, save as the Commissioners allow and subject to such conditions as they see fit to impose, any other substance except those specified in paragraphs (a) to (e) of that section) the words " any sweetening matter or " shall be transposed to follow the words " see fit to impose ".

4For paragraph (b) of section 183(1) of the Act of 1952 (which provides for drawback on tobacco stalks or tobacco refuse abandoned to the Commissioners) there shall be substituted the following paragraph:—

(b)tobacco stalks or tobacco refuse disposed of to the satisfaction of the Commissioners.

Customs procedures : standing deposits and computers

5(1)Where the Commissioners so direct, section 34(1) of the Act of 1952 (time for payment of duty on imported goods) shall not apply if and so long as the importer or his agent pays to, and keeps deposited with, the Commissioners a sum by way of standing deposit sufficient in their opinion to cover any duty which may become payable in respect of goods entered by that importer or agent, and if the importer or agent complies with such other conditions as the Commissioners may impose.

Where, by virtue of this sub-paragraph, goods are delivered for home use before payment of duty, the proviso to section 258(1) of the Act of 1952 (valuation of goods by reference to declared value) shall have effect as if the words "before the goods are delivered for home use " were omitted.

(2)Where, in accordance with approval given by the Commissioners, entry of goods is made by any method involving the use of a computer, then in the following provisions of the Act of 1952—

(a)section 34(2)(a) (application of duties and rates of duty in force at time of entry),

(b)section 258(2)(c) (rate of exchange of foreign currency in force before time of entry), and

(c)paragraph 1(1) of Schedule 6 (value at time of entry),

for references to the time of entry there shall be substituted references to the time when particulars contained in the entry are accepted by the computer.

(3)In connection with any arrangements approved by the Commissioners for recording particulars of exported goods by computer they may relax the requirements of section 49 of the Act of 1952 by suspending the obligation to deliver the specifications there mentioned on condition that—

(a)the particulars which should otherwise be contained in the specifications, or such of those particulars as the Commissioners may specify, are recorded by computer in accordance with the arrangements, and

(b)the particulars so recorded are subsequently delivered to the proper officer within such time as the Commissioners may specify,

and subject to such other conditions as they may impose.

(4)If under sub-paragraph (3) above particulars are recorded by computer, and any goods to which the particulars relate have not in fact been exported or shipped as stores, or the particulars are in any other way incorrect or inaccurate, the exporter of the goods and any other person who caused the incorrect or inaccurate particulars to be recorded shall each be liable to a penalty of £5 unless one of them, either himself or by an agent, corrects the particulars within the period mentioned in subsection (1) of the said section 49.

Section 16(4).

SCHEDULE 3Application of Corporation Tax Acts in Relation to Public Transport Authorities in London

1In this Schedule—

• " the Board " means the London Transport Board ;

• " the Company " means London Country Bus Services Limited ;

• " the Executive " means the London Transport Executive ; and

• " the transferee ", in relation to any part of the trade of the Board transferred under Part III of the [1969 c. 35.] Transport (London) Act 1969, means the Company or the Executive, according to the body to which that part is transferred.

2The parts of the Board's trade transferred under Part III of the Transport (London) Act 1969 to the Executive and the Company respectively shall be treated for the purposes of the Corporation Tax Acts as having been at all times separate trades ; and—

(a)there shall be made any necessary adjustments of accounting periods, and such apportionments as may be just of receipts, expenses, allowances or charges ; and

(b)the following provisions of this Schedule shall apply separately to each of those parts.

3For the purposes of the Corporation Tax Acts the trade transferred to the transferee shall not be treated as permanently discontinued, nor shall a new trade be treated as set up and commenced.

4The transferee shall be entitled to relief from corporation tax under subsection (1) of section 177 of the Taxes Act, as for a loss sustained by the transferee in carrying on the transferred trade for any amount which, if the Board had continued to carry on the trade, would have been available to the Board for carrying forward against chargeable profits of succeeding accounting periods, but subject to any claim made by the Board under subsection (2) of that section.

5(1)There shall be made to or on the transferee in accordance with sections 73 and 74 of the [1968 c. 3.] Capital Allowances Act 1968 (or in relation to a chargeable period ending on or before 5th April 1968, in accordance with section 56 of the [1965 c. 25.] Finance Act 1965) all such allowances and charges as would, if the Board had continued to carry on the trade, have fallen to be made to or on the Board in accordance with those sections, and the amount of any such allowances or charges shall be computed as if the transferee had been carrying on the trade since the Board began to do so and as if everything done to or by the Board had been done to or by the transferee.

(2)No sale or transfer which on the transfer of the trade is made by the Board to the transferee of any assets in use for the purposes of the trade shall be treated as giving rise to any such allowance or charge.

6For the purposes of paragraph 6 of Schedule 14 to the Taxes Act (transitional allowance for annual value of land as a business expense) any occupation of land for the purposes of the trade by the Board shall be treated as having been the occupation of the transferee.

7The Board shall not be entitled to relief in respect of the trade under section 178 of the Taxes Act (terminal losses) or under section 87 of the Finance Act 1965 (transitional relief on cessation of trade).

8(1)For the purposes of Part III of the Finance Act 1965 (capital gains) any asset transferred on the transfer of the trade shall be deemed to be for a consideration such that no gain or loss accrues to the Board on its transfer ; and for the purposes of Part II of Schedule 6 to that Act (assets held on 6th April 1965) the transferee shall be treated as if the acquisition by the Board or the British Transport Commission of any assets so transferred had been the transferee's acquisition thereof.

(2)In section 272(6) of the Taxes Act (Passenger Transport Executives treated as companies for the purposes of provisions of Chapter II of Part )(I of that Act about groups of companies) after the words " in relation to " there shall be inserted the words " the London Transport Executive and " and for the words " that Executive" there shall be substituted the words " each of those Executives ".

Section 18.

SCHEDULE 4Amendments of Income Tax Acts and Corporation Tax Acts

PART IAccounting for Income Tax Deducted by Companies

1(1)This paragraph has effect as respects income tax for which a company resident in the United Kingdom is liable to account in respect of distributions made by it, or in respect of any payments made by it, other than distributions.

(2)The Board may make regulations—

(a)as to the times at which and the manner in which a company is to account for and pay any such income tax, and

(b)subject to section 240(1) of the Taxes Act (limitations on repayment of income tax borne by companies), for discharging, to such extent and in such manner as may be prescribed by the regulations, a company's liability to account for income tax by setting that tax off against income tax borne by the company, or for repaying income tax so borne, and

(c)with respect to the procedure to be adopted for giving effect to the said section 240, and to section 256 of the Taxes Act (group income etc.).

(3)Regulations under this paragraph may in particular—

(a)provide for the assessment, charge, collection and recovery of any income tax for which a company is liable to account, and as to the information and evidence to be furnished by a company in or in connection with any return or claim made under or for the purposes of the regulations,

(b)make any provision corresponding to anything in Schedule 9 to the Taxes Act (which is to be superseded by regulations under this paragraph) and, in relation to any income tax for which a company is liable to account, modify any provision of Parts II to VI of the [1970 c. 9.] Taxes Management Act 1970, or apply any such provision with or without modifications,

(c)for the purpose of accounting for tax in accordance with the regulations, divide any year of assessment into equal or unequal periods of any length,

(d)treat income tax set against other tax in pursuance of sub-paragraph (2)(b) above as paid or repaid, as the case may be, and preclude the same tax being taken into account both under the regulations and under section 240(5) of the Taxes Act,

(e)make different provision for different descriptions of companies and for different circumstances, and authorise the Board, where in their opinion there are special circumstances justifying it, to make special arrangements as respects income tax for which a company is liable to account, or the repayment of income tax borne by a company, and

(f)include such transitional and other supplemental provisions as appear to the Board to be expedient or necessary.

(4)Regulations under this paragraph shall be made by statutory instrument, but the Board shall not make any statutory instrument under this paragraph unless a draft thereof has been laid before, and approved by a resolution of, the Commons House of Parliament.

(5)Regulations under this paragraph shall be known as " company tax regulations ".

(6)Company tax regulations shall not have effect for any year before the year 1971-72, and Schedule 9 to the Taxes Act shall not have effect for the first year as respects which company tax regulations have effect or any subsequent year.

2In the following provisions of the Taxes Act and of the Management Act for "Schedule 9 to this Act" or "Schedule 9 to the principal Act" or words to that effect substitute " company tax regulations " except for years of assessment for which the said Schedule 9 has effect, and corresponding amendments shall be made in any other enactment referring to the said Schedule 9.

3(1)Section 87 of the Management Act (interest on overdue income tax on company distributions etc.) shall be amended as follows.

(2)In subsection (2)—

(a)for " month " (five times) substitute " period of account ".

(b)after " principal Act" insert " or under company tax regulations ".

(3)In subsection (4)—

(a)after " principal Act ", in paragraph (a), and after " Schedule 9", in paragraph (b), insert " or with company tax regulations ".

(b)for " month " substitute " period of account ".

(4)For subsection (6) substitute—

“(6)In this section ' period of account' means—

(a)in relation to Schedule 9 to the principal Act, a month of a year of assessment, that is to say a month beginning on the sixth day of a month of a calendar year,

(b)in relation to company tax regulations, any period of account prescribed by the regulations.”

4In section 98 of the Management Act (penalties) at the end of column 2 of the Table add—

5Paragraph 1 of this Schedule shall be inserted in the Taxes Act after section 240 as a section numbered 240A, but substituting " this Act " for "the Taxes Act", and "this section" for "this paragraph ", and making similar substitutions of references to sub-paragraphs so converted into subsections.

PART IIOther Amendments

Treatment as distribution of interest paid by company to non-resident company in same group

6(1)In section 233(2)(d) of the Taxes Act (which specifies securities of a company in respect of which any interest or other distribution out of assets of the company is to be treated as a distribution for the purposes of the Corporation Tax Acts) for sub-paragraph (iv) (which specifies securities issued by the company and held by a company not resident in the United Kingdom, where the former is a 75 per cent, subsidiary of the latter or both are 75 per cent, subsidiaries of a third company) there shall be substituted the following sub-paragraph:—

“(iv)securities issued by the company and held by a company not resident in the United Kingdom, where—

(aa)the company which issued the securities is a 75 per cent, subsidiary of the other company; or

(bb)both are 75 per cent, subsidiaries of a third company which is not resident in the United Kingdom ; or

(cc)except where 90 per cent, or more of the share capital of the company which issued the securities is directly owned by a company resident in the United Kingdom, both the company which issued the securities and the company not resident in the United Kingdom are 75 per cent, subsidiaries of a third company which is resident in the United Kingdom or”.

(2)This paragraph does not apply to any payment becoming due or paid in an accounting period of the company making the payment which ends before 6th April 1970.

Capital allowances for contributions to public expenditure

7In section 85 of the [1968 c. 3.] Capital Allowances Act 1968 (which provides for capital allowances for contributions to expenditure by another person, but not where that other person is the Crown or some other authority not within the charge to tax) after subsection (2) there shall be inserted the following subsection:—

“(2A)In relation to any contribution made after 5th April 1970 to expenditure incurred after that date by the Crown, or by any public or local authority in the United Kingdom, subsection (1) above shall have effect as if the words from ' and in respect' to the end of paragraph (d) were omitted”;

and in subsection (3), after the words "this subsection shall apply only where " there shall be inserted the words " subsection (2a) above does not apply but ".

Purchased life annuity of variable amount

8(1)In section 230 of the Taxes Act after subsection (2) insert—

“((2a))Where, in the case of any purchased life annuity to which this section applies, the amount of any annuity payment (but not the term of the annuity) depends on any contingency other than the duration of a human life or lives—

(a)the capital element shall be determined by reference—

(i)to the amount or value of the payments made or other consideration given for the grant of the annuity (in this subsection referred to as the ' purchase price' of the annuity), and

(ii)to the expected term of the annuity, as at the date when the first annuity payment began to accrue, expressed in years (and any odd fraction of a year), and determined by reference to the prescribed tables of mortality,

and in head (ii) above ' term' means the period from the date when the first annuity payment begins to accrue to the date when the last payment becomes payable,

(b)the capital element in any annuity payment made in respect of a period of twelve months shall be a fraction of the purchase price, where E is the said expected term,

(c)the capital element in any annuity payment made in respect of a period of less than, or more than, twelve months shall be the amount at (b) above reduced, or as the case may be increased, in the same proportion as the length of that period bears to a period of twelve months,

(d)subsection (2) above shall not apply, but paragraphs (a) and (b) of subsection (3) below shall apply as they apply to that subsection,

and in applying subsection (2)(d) above where both the amount and the term of the annuity depend on any contingency other than the duration of a human life or lives, regard shall be had to this subsection (and not to subsection (2)(c) above) as well as to the contingencies affecting the annuity.”

(2)This paragraph has effect for the year 1970-71 and subsequent years of assessment, whether or not annuity payments under the annuity fell due before the beginning of the year 1970-71.

Relief for payments of interest

9(1)In section 60(1) of the Taxes Act (loan to purchase machinery or plant used by a partnership) after " interest paid by him in" insert " the basis period (as defined in section 72 of that Act) for ".

(2)In section 62(1) of the Taxes Act (certain pre-1970 loans) for the words " on which the recipient is chargeable to tax under Case III of Schedule D, and" substitute " which is chargeable to tax under Case III of Schedule D, and ".

(3)In section 63(2) of the Taxes Act (overdraft interest: money drawn and applied in whole or part for eligible purposes) after " that money " insert " or as the case may be that part of it " , and accordingly in subsection (5) of the said section 63 the words from " and where part only " to the end of the subsection shall cease to have effect.

(4)At the end of the said section 63 add—

“(7)Subsection (6) above applies only where the loan subsists throughout the year of assessment (but it is necessary to ascertain the interest paid in respect of a part only of the year), and where the loan subsists only for a shorter period but it is necessary to ascertain the interest paid in respect of part of that period, the calculation shall be made in a corresponding way”.

(5)After section 64 of the Taxes Act insert—

“64ASchemes for employees and directors to acquire shares.

Where under a scheme set up to comply with proviso (b) to section 54(1) of the [1948 c. 38.] Companies Act 1948 (financial assistance for company employees and salaried directors acquiring shares), or any corresponding enactment in force in Northern Ireland, trustees receive interest from such employees or directors then, if and so far as the scheme requires an equivalent amount to be paid by way of interest by the trustees to the company, the trustees shall be exempt from tax under Case III of Schedule D on that interest received by them.”

(6)In section 173(3) of the Taxes Act (carry forward as losses of amounts taxed under section 53) before paragraph (a) insert—

“(aa)to any payment to which the said section 53 applies by virtue of section 54(3) of this Act (annual interest)”.

(7)In section 190 of the Taxes Act (interest on loans to purchase machinery or plant), in subsection (1)(a) after " balancing charge " insert " (or would be so entitled or liable but for some contribution made by the employer) " , and at the end insert—

“(6)Where the whole of a debt does not fulfil the conditions required by this section, relief shall be given under this section only in respect of the proportion of any payment of interest equal to the proportion of the debt fulfilling those conditions at the time of the application of the money in question”.

(8)Sections 19, 22 and 24 of, and paragraphs 1 and 7 of Schedule 13 to, the [1969 c. 32.] Finance Act 1969 (which correspond to the provisions amended by section 17 of this Act and this paragraph) shall be deemed always to have had effect as if there had been made in them, with the necessary adaptations of wording and in particular with the necessary adaptations of references to other enactments, the amendments which are directed by the said section 17 and the preceding provisions of this paragraph to be made in the corresponding provisions of the Taxes Act.

For the year 1969-70 the [1952 c. 10.] Income Tax Act 1952 shall have effect, in relation to any debt incurred after 15th April 1969, as if it contained a section corresponding to the section 64A inserted by this paragraph in the Taxes Act.

(9)All such assessments, repayments of tax and other adjustments shall be made as are required to give effect to sub-paragraph (8) above, but that sub-paragraph shall not be taken as authorising the giving of any relief more than once.

Inland Revenue procedures: returns and assessments

10In section 113 of the Management Act after subsection (1) insert—

“((1A))Any notice or direction requiring any return to be made under the Taxes Acts to an inspector or other officer of the Board may be issued or given in the name of that officer, or as the case may be in the name of the Board, by any officer of the Board, and so as to require the return to be made to the first-mentioned officer.

((1B))Where the Board or an inspector or other officer of the Board have in accordance with section 29 of this Act, or any other provision of the Taxes Acts, decided to make an assessment to tax, and have taken all other decisions needed for arriving at the amount of the assessment, they may entrust to some other officer of the Board responsibility for completing the assessing procedure, whether by means involving the use of a computer or otherwise, including responsibility for serving notice of the assessment on the person liable for tax.”

Fractions of a penny

11Section 2(1) of the Taxes Act (no tax to be charged of a lower denomination than one penny) shall be amended by adding after " one penny " the words " or, as the case may require, one new penny " ; and the like amendment shall be made in section 4 of the [1952 c. 10.] Income Tax Act 1952 (corresponding provision for years preceding 1970-71).

Sections 19 and 26.

SCHEDULE 5Occupational Pension Schemes

PART IApproved Schemes : Conditions as Respects Benefits

Employee's benefits

1The benefits payable to the employee must consist only of benefits payable on or after retirement at a specified age not earlier than 60 or later than 70, or on earlier retirement through incapacity.

Overall limit on employee's benefits

2(1)The aggregate value of the relevant benefits payable to an employee on or after retirement, after 40 or more years' service, expressed as an annual amount payable for his life after retirement, must not exceed two-thirds of his final remuneration.

(2)The aggregate value of the relevant benefits payable to an employee on or after his retirement, after less than 40 years' service, so expressed, must not exceed the limit in sub-paragraph (1) above reduced by multiplying by the number of years' service and dividing by 40.

Limit on employee's lump sum benefits

3The aggregate value of the relevant benefits payable to an employee on or after retirement, excluding any pension which is not commutable, must not exceed three-eightieths of his final remuneration for each year of service up to a maximum of 40.

Death after retirement: widow's pension

4The annual amount of any pension payable to the widow of an employee who dies after retirement must not exceed one-half of the employee's pension.

Death after retirement: other provisions

5(1)Subject to the following provisions of this paragraph, and except in the case of an employee who dies before retirement, benefits payable otherwise than to the employee must consist only of a pension payable to the employee's widow which is not commutable.

(2)Where the employee dies after retirement, but so that less than 5 years' pension has become payable to him, sub-paragraph (1) above shall not prevent the making of payments not exceeding in all the value of the pension for the remaining part of the 5 years.

(3)An employee may surrender part of his pension to provide a pension for his widow of an amount not exceeding the reduced pension retained by the husband, and the limit in paragraph 4 above shall be applied without regard to any pension so surrendered.

Death before retirement

6The aggregate value of benefits payable where the employee dies before retirement must not exceed twice his final remuneration.

Pensions

7Pensions must not be capable of being assigned or, subject to paragraph 5(3) above, of being surrendered.

Meaning of " final remuneration "

8In this Part of this Schedule " final remuneration " means the highest average annual remuneration of any 3 consecutive years in the last 10 years' service.

PART II

Charge of pensions under Schedule E

1(1)Subject to sub-paragraph (2) below, all pensions paid under any scheme which is approved or is being considered for approval under the principal Chapter shall be charged to tax under Schedule E, and section 204 of the Taxes Act (pay-as-you-earn) shall apply accordingly.

(2)As respects any scheme which is approved or is being considered for approval under the principal Chapter, the Board may direct that, until such date as the Board may specify, pensions under the scheme shall be charged to tax as annual payments under Case III of Schedule D, and tax shall be deductible under Part II of the Taxes Act accordingly.

Charge to tax on repayment of employee's contributions

2(1)Where by way of repayment of, or of interest on, contributions made by an employee, any amount is paid—

(a)in accordance with the rules of an exempt approved scheme, or

(b)in accordance with a statutory scheme to which section 22 of this Act applies,

the administrator of the scheme shall be charged to income tax under Case VI of Schedule D on that amount, and—

(i)the rate of the tax shall be one half of the standard rate of income tax for the year in which the amount is paid,

(ii)the tax shall be charged on the amount paid or, if the rules permit the administrator to deduct the tax before payment, on the amount before deduction of tax,

(iii)the amount so charged to tax shall not be treated as income for any other purpose of the Tax Acts.

(2)This paragraph shall not apply where the employee's employment was carried on outside the United Kingdom.

(3)Sub-paragraph (1)(b) above shall not apply to any payment made before the date appointed under section 22 of this Act.

Charge to tax: commutation of entire pension in special circumstances

3(1)Where—

(a)an approved scheme, or

(b)a statutory scheme to which section 22 of this Act applies,

contains a rule allowing, in special circumstances, a payment in commutation of an employee's entire pension, and any pension is commuted, whether wholly or not, under the rule, tax shall be charged on the amount by which the sum receivable exceeds—

(i)the largest sum which would have been receivable in com mutation of any part of the pension if the rule had conformed with paragraph 3 of Part I of this Schedule, or

(ii)the largest sum which would have been receivable in commutation of any part of the pension under any other rule of the scheme authorising the commutation of part (but not the whole) of the pension, or which would have been so receivable but for the said circumstances,

whichever gives the lesser amount chargeable to tax.

(2)Where any amount is chargeable to tax under this paragraph, the administrator of the scheme shall be charged to income tax under Case VI of Schedule D on that amount, and—

(a)the rate of the tax shall be one half of the standard rate of income tax for the year in which the amount is paid,

(b)the tax shall be charged on the amount paid or, if the rules permit the administrator to deduct the tax before payment, on the amount before deduction of tax,

(c)the amount so charged to tax shall not be treated as income for any other purpose of the Tax Acts.

(3)This paragraph shall not apply where the employee's employment was carried on outside the United Kingdom.

(4)In applying paragraphs (i) and (ii) of sub-paragraph (1) above the same considerations shall be taken into account, including the provisions of any other relevant scheme, as would have been taken into account by the Board in applying section 19 of this Act.

(5)Sub-paragraph (1)(b) above shall not apply to any payment made before the date appointed under section 22 of this Act.

Charge to tax: repayments to employer

4(1)Where any payment is made or becomes due to an employer out of funds which are or have been held for the purposes of an exempt approved scheme then:—

(a)if the scheme relates to a trade, profession or vocation carried on by the employer, the payment shall be treated for the purposes of the Tax Acts as a receipt of that trade, profession or vocation receivable when the payment falls due or on the last day on which the trade, profession or vocation is carried on by the employer, whichever is the earlier,

(b)if the scheme does not relate to such a trade, profession or vocation, the employer shall be charged to tax on the amount of the payment under Case VI of Schedule D.

(2)This paragraph shall not apply to a payment which fell due before the scheme became an exempt approved scheme.

Charge to tax: unauthorised payments and payments after cessation of tax exemptions

5(1)Where a payment is made to or for the benefit of an employee, otherwise than in payment of a pension, and—

(a)it is made under an approved scheme, but is not expressly authorised by the rules of the scheme, or

(b)it is made wholly or partly out of funds in respect of which relief has been given under section 21 of this Act or under section 208 of the Taxes Act, but is made when the scheme has ceased to be an approved scheme, and is in excess of the amounts authorised by the rules of the scheme before it ceased to be an approved scheme,

the employee (whether or not he is the recipient of the payment) shall be chargeable to tax on that amount (or on that amount so far as made out of funds in respect of which relief has been given) under Schedule E for the year of assessment in which the payment is made.

(2)So far as any payment is made out of funds in respect of which relief has been given under section 21 of this Act or under section 208 of the Taxes Act, paragraphs 2 and 3 of this Part of this Schedule shall apply as if references to an exempt approved scheme included references to a scheme which has at any time been an exempt approved scheme.

Application for approval of a scheme

6An application for the approval for the purposes of the principal Chapter of any retirement benefits scheme shall be made in writing by the administrator of the scheme to the Board before the end of the first year of assessment for which approval is required, and shall be supported by—

(a)two copies of the instrument or other document constituting the scheme ; and

(b)two copies of the rules of the scheme and, except where the application is being sought on the setting up of the scheme, two copies of the accounts of the scheme for the last year for which such accounts have been made up; and

(c)such other information and particulars (including copies of any actuarial report or advice given to the administrator or employer in connection with the setting up of the scheme) as the Board may consider relevant.

Information about payments under approved schemes

7In the case of every approved scheme, the administrator of the scheme, and every employer who pays contributions under the scheme, shall, within thirty days from the date of a notice from the inspector requiring them so to do—

(a)furnish to the inspector a return containing such particulars of contributions paid under the scheme as the notice may require ;

(b)prepare and deliver to the inspector a return containing particulars of all payments under the scheme, being—

(i)payments by way of return of contributions (including interest on contributions, if any),

(ii)payments by way of commutation of, or in lieu of, pensions, or other lump sum payments,

(iii)other payments made to an employer;

(c)furnish to the inspector a copy of the accounts of the scheme to the last date previous to the notice to which such accounts have been made up together with such other information and particulars (including copies of any actuarial report or advice given to the administrator or employer in connection with the conduct of the scheme in the period to which the accounts relate) as the inspector considers relevant.

Information about schemes, other than approved or statutory schemes

8(1)This paragraph has effect as respects a retirement benefits scheme which is neither an approved scheme nor a statutory scheme.

(2)It shall be the duty of every employer—

(a)if there subsists in relation to any of his employees any such scheme, to deliver particulars of that scheme to the Board within three months beginning with the date on which the scheme first comes into operation in relation to any of his employees, or the date of the coming into force of this paragraph, whichever is the later, and

(b)when required to do so by notice given by the Board, to furnish within the time limited by the notice such particulars as the Board may require with regard to—

(i)any retirement benefits scheme relating to the employer ; or

(ii)the employees of his to whom any such scheme relates.

(3)It shall be the duty of the administrator of any such scheme, when required to do so by notice given by the Board, to furnish within the time limited by the notice such particulars as the Board may require with regard to the scheme.

(4)This paragraph shall come into force on the same date as section 23 of this Act.

Responsibility of administrator of a scheme

9(1)If the administrator of a retirement benefits scheme defaults or cannot be traced or dies, the employer shall be responsible in his place for the discharge of all duties imposed on the administrator under the principal Chapter, with this Part of this Schedule, and shall be liable for any tax due from him in his capacity as administrator.

(2)No liability incurred under the principal Chapter or this Part of this Schedule by the administrator of a scheme, or by an employer, shall be affected by the termination of the scheme or by it ceasing to be an approved scheme, or to be an exempt approved scheme.

(3)References in this paragraph to the employer include, where the employer is resident outside the United Kingdom, references to any branch or agent of the employer in the United Kingdom, and in this sub-paragraph " branch or agent" has the meaning given by section 118(1) of the Management Act.

Regulations

10The Board may by statutory instrument, subject to annulment in pursuance of a resolution of the Commons House of Parliament, make regulations generally for the purpose of carrying the principal Chapter and this Schedule into effect.

PART IIIConsequential Amendments

Tax treatment of life assurance business

11(1)In section 323(4) of the Taxes Act (definition of pension annuity business) after paragraph (a) insert

“(aa)any contract (including a contract of insurance) entered into for the purposes of, and made with the persons having the management of, an exempt approved scheme as defined in Chapter II of Part II of the Finance Act 1970, being a contract so framed that the liabilities undertaken by the insurance company under the contract correspond with liabilities against which the contract is intended to secure the scheme”.

(2)In relation to an exempt approved scheme the said paragraph (aa) shall apply, so long as the scheme is an exempt approved scheme, whether or not the premiums were paid, or any other part of the business was transacted, before the scheme became an approved scheme, and in the said section 323(4) the words " (at the time when the premium is payable)" shall cease to have effect.

(3)Business formerly called " pension annuity business " shall in future be called pension business (because under sub-paragraph (1) above it includes some business unrelated to annuities), and in the following provisions of the Taxes Act (and in any other enactment) for " pension annuity business " substitute " pension business ".

• Section 312(1)(3)(4)

• Section 314 (throughout)

• Section 315(8)(b)

• Section 318(1)

• Section 323(4)

(4)In section 323(2) of the Taxes Act at the end of the definition of " annuity business " add " ' general annuity business ' means any annuity business which is not pension business, and 'pension business ' shall be construed in accordance with subsections (3) and (4) below. "

(5)For section 323(3) substitute

“(3)Any division to be made between general annuity business, pension business and other life assurance business shall be made on the principle of—

(a)referring to pension business any premiums falling within subsection (4) below, together with the incomings, outgoings and liabilities referable to those premiums, and the policies and contracts under which they are or have been paid,

(b)allocating to general annuity business all other annuity business,

and references to " pension fund " and " general annuity fund " shall be construed accordingly, whether or not any such funds are kept separate from the insurance company's life assurance fund.”

(6)In the Taxes Act—

(a)in section 312(2)(a) after " policy-holders " insert " other than holders of policies referable to pension business ".

(b)in section 312(2)(c) for the words " in connection with the granting of annuities on human life" substitute " from pension business or general annuity business ".

(c)in section 314(1) and (3)(b) for " annuity fund " substitute " life assurance fund and separate annuity fund, if any ".

(d)in section 316(1) and (3) and 320(1) and (2) for " (excluding the annuity fund, if any) " substitute " (excluding the pension fund and general annuity fund, if any) ".

(e)in section 316(3) for " annuity business" (at end of the subsection) substitute " general annuity and pension business ".

(f)in section 328(1)(b) for " annuity business " substitute " pension business and general annuity business ".

Other amendments of Taxes Act

12(1)In section 188(1) of the Taxes Act (exemptions and reliefs in respect of tax under section 187), after paragraph (c) insert—

“(cc)a benefit provided in pursuance of any retirement benefits scheme where under section 23 of the Finance Act 1970 the employee (as defined for the purposes of that section) was chargeable to tax in respect of sums paid, or treated as paid, with a view to the provision of the benefit ",”,

and at the end of paragraph (d) add " or in section 24(1) of the Finance Act 1970 ".

(2)In section 211(5) of the Taxes Act (Parliamentary pension funds) for the words from " payable by a superannuation " to the end of the subsection substitute " payable by an exempt approved scheme as defined in Chapter II of Part II of the Finance Act 1970, and for the purposes of that Chapter (and the provisions to be construed as one with it) each such Fund shall be treated as an exempt approved scheme. "

(3)In section 283(4) of the Taxes Act (definition of close company) after paragraph (b) insert—

“(bb)if held on trust for an exempt approved scheme as defined in Chapter II of Part II of the Finance Act 1970, or”.

(4)In the proviso to section 303 (3) of the Taxes Act (meaning of " associate ") after paragraph (i) insert—

“(iA)if the trust relates exclusively to an exempt approved scheme as defined in Chapter II of Part II of the Finance Act 1970, or”.

(5)In the proviso to section 422(4), and in the proviso to section 423(1) of the Taxes Act (modification of pre-war provisions for tax free payments) at the end add " or by virtue of paragraph 1 of Part II of Schedule 5 to the Finance Act 1970 ".

(6)At the end of paragraph 4(c) of Schedule 8 to the Taxes Act (payments on retirement or removal from office : top-slicing relief) add " or in pursuance of any exempt approved scheme as defined in Chapter II of Part II of the Finance Act 1970 ".

(7)The repeal of Chapter II of Part I)( of the Taxes Act by this Act shall not affect the following provisions of the Taxes Act (which apply definitions in section 224(1) in the said Chapter II), or any other enactment applying those definitions.

• Section 186(10)(c).

• Section 226(9).

• The proviso to paragraph 4 of Schedule 8.

Amendment of Taxes Management Act 1970

13In section 98 of the Management Act (penalties) in column 1 of the Table insert a reference at the appropriate place to paragraph 7 and sub-paragraph (2)(b) and (3) of paragraph 8 of Part II of this Schedule and in column 2 of the Table to sub-paragraph (2)(a) of the said paragraph 8.

Estate duty

14In paragraph 10(c) of Part II of Schedule 17 to the [1969 c. 32.] Finance Act 1969 (estate duty: relief for certain superannuation funds) the reference to the schemes or funds there described shall include a reference to any exempt approved scheme or statutory scheme as defined in Chapter II of Part II of this Act.

Section 29.

SCHEDULE 6Taxation of Capital Element in Mineral Royalties

PART ICalculation of Capital Element

1In a case falling within paragraph (b) of subsection (3) of section 29 of this Act, that is to say in a case where betterment levy was chargeable under Case B on the last disposition affecting the mineral lease or agreement concerned and giving rise to an assessment to betterment levy, the relevant fraction referred to in subsection (1)(b) of that section is:—

2Expressions used in paragraph 1 above have the same meanings in that paragraph as they have for the purposes of assessing betterment levy under Case B within the meaning of Part III of the [1967 c. 1.] Land Commission Act 1967.

PART IITerminal Loss Relief

3(1)The provisions of this Part of this Schedule apply in a case where, at the time of the occurrence of a relevant event in relation to a mineral lease or agreement, the person who immediately before that event occurred was entitled to receive mineral royalties under the lease or agreement (in this Part of this Schedule referred to as " the taxpayer ") has an interest in the land to which the mineral lease or agreement relates (in this Part of this Schedule referred to, in relation to the lease or agreement, as " the relevant interest").

(2)For the purposes of this Part of this Schedule a relevant event occurs in relation to a mineral lease or agreement—

(a)on the expiry or termination of the mineral lease or agreement ;

(b)if the relevant interest is disposed of, or is treated as having been disposed of by virtue of any provision of Part III of the [1965 c. 25.] Finance Act 1965 (capital gains).

4(1)Subject to sub-paragraph (2) below, on the expiry or termination of a mineral lease or agreement the taxpayer shall, if he makes a claim in that behalf, be treated for purposes of capital gains tax, or as the case may be corporation tax on chargeable gains, as if he had disposed of and immediately re-acquired the relevant interest for a consideration equal to its market value, but without prejudice to the operation of section 33 of the [1967 c. 54.] Finance Act 1967 (amount of chargeable gain calculated by reference to current use value unless the taxpayer elects to the contrary).

(2)A claim may not be made under this paragraph—

(a)if the expiry or termination of the mineral lease or agreement is also a relevant event falling within paragraph 3(2)(b) above; nor

(b)unless, on the notional disposal referred to in sub-paragraph (1) above, an allowable loss would accrue to the taxpayer.

(3)In the following provisions of this Part of this Schedule "the terminal loss ", in relation to a relevant event in respect of which a claim is made under this paragraph, means the allowable loss which accrues to the taxpayer by virtue of the notional disposal occurring on that relevant event by virtue of sub-paragraph (1) above.

5(1)On making a claim under paragraph 4 above, the taxpayer shall specify whether he requires the terminal loss to be dealt with in accordance with this paragraph or with paragraph 7 below.

(2)Where the taxpayer requires the loss to be dealt with in accordance with this paragraph it shall be treated as an allowable loss accruing to him in the year of assessment or accounting period in which the mineral lease or agreement expires.

6(1)If on the occurrence of a relevant event falling within paragraph 3(2)(b) above, an allowable loss accrues to the taxpayer on the disposal or notional disposal which constitutes that relevant event, the taxpayer may make a claim under this paragraph requiring the loss to be dealt with in accordance with paragraph 1 below and not in any other way.

(2)In the following provisions of this part of this Schedule " the terminal loss " in relation to a relevant event in respect of which a claim is made under this paragraph means the allowable loss which accrues to the taxpayer as mentioned in sub-paragraph (1) above.

7(1)Where, as a result of a claim under paragraph 4 or paragraph 6 above, the terminal loss is to be dealt with in accordance with this paragraph, then, subject to sub-paragraph (2) below, it shall be deducted from or set off against the amount on which the taxpayer was chargeable to capital gains tax, or as the case may be corporation tax, for years of assessment or accounting periods preceding the year of assessment or accounting period in which occurred the relevant event giving rise to the terminal loss and falling wholly or partly within the period of fifteen years ending with the date of that event.

(2)The amount of the terminal loss which, by virtue of sub-paragraph (1) above, is to be deducted from or set off against the amount on which the taxpayer was chargeable to capital gains tax, or as the case may be corporation tax, for any year of assessment or accounting period shall not exceed the amount of the gain which in that year or period was treated, by virtue of subsection (1)(b) of section 29 of this Act, as accruing to the taxpayer in respect of mineral royalties under the mineral lease or agreement in question ; and subject to this limit any relief given to the taxpayer by virtue of sub-paragraph (1) above shall be given as far as possible for a later rather than an earlier year of assessment or accounting period.

(3)If in any case where relief has been given to the taxpayer in accordance with sub-paragraphs (1) and (2) above there remains an unexpended balance of the terminal loss which cannot be applied in accordance with those sub-paragraphs, there shall be treated as accruing to the taxpayer in the year of assessment or accounting period in which the relevant event occurs an allowable loss equal to that unexpended balance.

8(1)No claim under paragraph 4 or paragraph 6 above shall be allowed unless it is made within six years from the date of the relevant event by virtue of which the taxpayer is entitled to make the claim.

(2)All such repayments of tax shall be made as may be necessary to give effect to any such claim.

9This Part of this Schedule shall be construed as one with Part III of the [1965 c. 25.] Finance Act 1965.

Section 32.

SCHEDULE 7Stamp Duties

PART IAbolition of Certain Duties

Duties abolished as from 1st August 1970

1(1)This paragraph has effect as from 1st August 1970.

(2)The following stamp duties are hereby abolished—

(a)the duty of 6d. specified in Schedule 1 to the [1891 c. 39.] Stamp Act 1891 under the heading beginning " Agreement or any Memorandum of an Agreement " (the provisions consequential on this abolition being those contained in sub-paragraph (3) below);

(b)the duty of 6d. specified in that Schedule under the heading " Policy of Insurance other than Life Insurance " inserted by section 30(1) of the [1959 c. 58.] Finance Act 1959 (and so that a policy of insurance other than life insurance shall be exempt from all stamp duties);

(c)the duty of £10 or £6 imposed on a certificate of registration for an alkali or other works by section 9(6) of the [1906 c. 14.] Alkali, &c. Works Regulation Act 1906 as amended by section 47 of the [1922 c. 17.] Finance Act 1922 ; and

(d)the duty of 10s. imposed on the memorandum and on the articles of association of a company by virtue of section 3 and section 9(c) respectively of the [1948 c. 38.] Companies Act 1948 (which provide that each of those documents is to be stamped as if it were a deed).

(3)In consequence of sub-paragraph (2)(d) above—

(a)in subsections (1) and (2) of section 23 of the [1891 c. 39.] Stamp Act 1891 (certain mortgages of stock to be chargeable as agreements), for " shall be deemed to be an agreement, and shall be charged with duty accordingly" substitute " shall be exempt from duty ".

(b)in section 59 of that Act (certain contracts for sale to be chargeable ad valorem as conveyances)—

(i)in subsection (2) (sub-contracts under which the consideration does not exceed that for the original sale to be charged only as deeds or agreements), for " and in any other case with the fixed duty of ten shillings or of sixpence, as the case may require " substitute " but shall not otherwise be chargeable except where appropriate with the fixed duty of 10s. " , and

(ii)in subsection (5) (stamping of conveyances made in conformity with contracts not stamped ad valorem but stamped with the fixed duty of 10s. or 6d.), for the words from the beginning to " the said fixed duty" substitute " Provided that where any such contract or agreement is stamped with the fixed duty of 10s. or would, apart from this section, not be chargeable with any duty " , and

(c)in section 7 of the [1907 c. 13.] Finance Act 1907 (hire purchase agreements to be charged only as deeds or agreements), for the words from " shall be charged " to the end substitute " shall only be charged with stamp duty if under seal (or, in Scotland, with a clause of registration), and shall then be so charged as a deed ".

Duties abolished as from 1st February 1971

2(1)This paragraph has effect as from 1st February 1971.

(2)The following stamp duties are hereby abolished—

(a)the duty of 2d. specified in Schedule 1 to the Stamp Act 1891 under the heading beginning "Bill of Exchange or Promissory Note" inserted by section 33(1) of the [1961 c. 36.] Finance Act 1961 ; and

(b)the duty of 2d. specified in that Schedule under the heading beginning " Receipt".

(3)No application for relief in respect of the duty referred to in sub-paragraph (2)(a) above may be made under any of sections 9 to 12 of the [1891 c. 38.] Stamp Duties Management Act 1891 (spoiled, misused and unwanted stamps); and no repayment shall be made under any agreement entered into under section 39 of the [1956 c. 54.] Finance Act 1956 (composition for the said duty by bankers) in respect of any form supplied by a banker to a customer and returned to the banker unused or spoiled on or after the said 1st February.

PART IIGeneral Amendments

3This Part of this Schedule, except paragraph 5, has effect as from 1st August 1970.

Agreements for purposes of Highway Acts

4An instrument shall be chargeable with stamp duty under the heading in Schedule 1 to the [1891 c. 39.] Stamp Act 1891 beginning "Agreement or Contract made or entered into pursuant to the Highway Acts " only if it is under seal, or, in Scotland, only if it has a clause of registration, and shall then be so chargeable with a duty of Is.

Bank notes (composition)

5(1)This paragraph applies to any agreement under section 7 of the [1853 c. 63.] Bankers' Composition (Scotland) Act 1853 which is in force at the passing of this Act, and which makes provision for periodic payments, calculated by reference to the value of notes in circulation, in lieu of the duty chargeable under the heading " Bank Note " in Schedule 1 to the Stamp Act 1891.

(2)As respects any period beginning after 26th December 1970, the payments due under any agreement to which this paragraph applies shall be calculated as if for any reference in the agreement to a rate of 4s. 2d. per £100 there were substituted a reference to a rate of 4s. per £100.

Bearer instruments

6(1)The heading " Bearer Instrument" inserted in Schedule 1 to the Stamp Act 1891 by section 59(1) of the [1963 c. 25.] Finance Act 1963 shall be amended as follows.

(2)In paragraph (3) (instrument excepted from paragraph (1) or (2) ; duty of 6d. for every £25, or part of £25, of market value), for " 6d." substitute " Is. ". and for " £25 " (in each place) substitute " £50 ".

(3)In paragraph (4) (duty of 6d. on substituted instrument), for " 6d. " substitute " Is. ".

(4)Where an overseas bearer instrument in respect of a loan expressed in sterling has been stamped ad valorem, or with the denoting stamp referred to in section 60(3) of the Finance Act 1963, or with duty under paragraph (4) of the said heading, duty shall not be charged under that heading by reason only that the instrument is amended on its face pursuant to an agreement for the variation of any of its original terms or conditions.

Bond, covenant, etc.

7(1)The heading beginning " Bond, Covenant " in Schedule 1 to the Stamp Act 1891 shall be amended as follows.

(2)In paragraph (1) (only or principal security for annuity or other periodic payment; duty of 2s. 6d. for every £5 or part if for an indefinite period), for the reference to 2s. 6d. substitute a reference to 2s.

(3)In paragraph (2) (collateral etc. security for annuity or other periodic payment; duty of 6d. for every £5 or part if total amount payable cannot be ascertained), for the reference to 6d. substitute a reference to 1s., and for each reference to £5 substitute a reference to £10.

(4)In paragraph (3) (grant or contract for payment of superannuation annuity ; duty of 6d. for every £5 or part), for the reference to 6d. substitute a reference to 1s., and for each reference to £5 substitute a reference to £10.

Bonds not otherwise chargeable

8In the heading " Bond of any kind whatsoever not specifically charged with any duty " in Schedule 1 to the [1891 c. 39.] Stamp Act 1891 (under which a bond is chargeable with the same ad valorem duty as one for the amount limited to be recoverable if that amount does not exceed £300, and with a duty of 10s. in any other case), for " £300 " substitute " £400 ".

Contract notes

9(1)In section 77(1) of the [1910 c. 8.] Finance (1909-10) Act 1910 (duties on contract notes for sale or purchase of stock or marketable securities of £5 or more in value), for all the words after " the following stamp duties " substitute—

“Where the value of the stock or marketable security—

(2)In consequence of sub-paragraph (1) above, in subsections (1) and (3) of section 78 of the said Act of 1910 (duty to execute contract note as respects stock etc. of £5 or more in value), for " the value of five pounds or upwards " or " a value of five pounds or upwards ", wherever occurring, substitute " a value exceeding £100 ".

(3)In subsection (4) of the said section 78 (duty on contract note to be denoted by an appropriated adhesive stamp, and the stamp to be effectively cancelled), after " denoted" insert " either by an impressed stamp or ". and for " and the stamp " substitute " and any such adhesive stamp ".

Conveyance or transfer on sale

10For the Table set out in Part I of Schedule 11 to the [1963 c. 25.] Finance Act 1963 (ad valorem duty on conveyance or transfer on sale) as amended by section 27(1) of the [1967 c. 54.] Finance Act 1967 substitute the following:—

11In section 62(2) of the [1963 c. 25.] Finance Act 1963 (rate of duty in respect of a transfer of commonwealth government stock to be one-quarter of that which would otherwise be chargeable, or, if the amount or value of the consideration does not exceed £5, 3d.), for the words from " one-quarter " to the end substitute " Is. for every £20 or part of £20 of the consideration if the amount or value thereof does not exceed £300, and, in any other case, 5s. for every £100 or part of £100 of the consideration ".

12Section 59(4) of the [1891 c. 39.] Stamp Act 1891 (contract for sale not stamped ad valorem but stamped with fixed duty of 10s. or 6d. to be treated as duly stamped for certain purposes) shall cease to have effect.

13(1)Section 114 of the Stamp Act 1891 (composition for stamp duty on transfers of colonial etc. stock) shall cease to have effect, but transfers of any stock in respect of which payments have been made under that section shall continue to be exempt from stamp duty.

(2)In section 37(2) of the [1939 c. 41.] Finance Act 1939 (composition agreements in respect of colonial etc. stock: rate of payment per £100 of aggregate nominal amount of stock) for "three pence for every one hundred pounds and any fraction of one hundred pounds " substitute " Is. for every £400 and any fraction of £400 " ; and any agreement entered into for the purposes of the said section 37 before the passing of this Act shall, so far as it relates to payments to be made on or after 1st August 1970, have effect as if it provided for the making of those payments at the rate at which duty is chargeable under that section by virtue of this sub-paragraph.

Lease or tack

14In section 75(2) of the Stamp Act 1891 (duty of 6d. on lease or tack if preceded by an agreement duly stamped as an actual lease or tack), for " sixpence " substitute " Is. ".

Loan capital duty

15(1)Where duty on a statement of loan capital is charged under section 8 of the [1899 c. 9.] Finance Act 1899 at the rate of 10s. for every £100, or part of £100, imposed by section 28(1) of the [1967 c. 54.] Finance Act 1967, any repayment in respect of that duty under section 10(1) of the [1907 c. 13.] Finance Act 1907 shall be at a rate of 19s. for every £200 of the loan capital shown to the satisfaction of the Commissioners to have been applied for the purpose of the conversion or consolidation of existing loan capital, instead of at the rate of 9s. 6d. for every £100 provided for by section 28(5) of the said Act of 1967.

(2)Where—

(a)there is for the purposes of the charge to duty under section 8 of the Finance Act 1899 an issue of loan capital by a body corporate consisting in the assumption by that body corporate of liability under a mortgage or charge subject to which property is conveyed or transferred to it by another body corporate, and

(b)the conveyance or transfer is exempt from duty by virtue of section 42 of the [1930 c. 28.] Finance Act 1930 (associated companies),

the first mentioned body corporate shall be treated as having applied the loan capital in the conversion of existing loan capital, and section 10 of the [1907 c. 13.] Finance Act 1907 shall have effect accordingly.

Mortgages etc.

16(1)The heading beginning " Mortgage, Bond, Debenture, Covenant" in Schedule 1 to the [1891 c. 39.] Stamp Act 1891 shall be amended in accordance with sub-paragraphs (2) and (3) below.

(2)In paragraph (1) of that heading (only, or principal or primary, security), for the words from " Not exceeding £10" to the end substitute—

(3)In paragraphs (2), (4) and (5) of that heading (collateral etc. securities, transfers etc. and re-conveyances etc.: duty of 6d. for every £100 or part), for each reference to 6d. substitute a reference to 1s., and for each reference to £100 substitute a reference to £200.

(4)The duty chargeable under paragraph (4) of the said heading on the transfer, assignment, disposition or assignation to any person of, or of the money or stock secured by, any collateral, auxiliary, additional or substituted security (including any instrument by way of further assurance) shall not exceed 10s. if a transfer, assignment, disposition or assignation to the same person of (or, as the case may be, of the money or stock secured by) the principal or primary security has been duly stamped with the duty chargeable under that paragraph.

(5)Paragraph (5) of the said heading shall also be amended by inserting, after " Renunciation " , the words " in whole or in part" ; and the duty chargeable under that paragraph shall not in any case exceed 10s.

Policies of life insurance

17(1)The following shall be substituted for the heading " Policy of Life Insurance " in Schedule 1 to the Stamp Act 1891—

(2)In subsections (1) and (3) of section 47 of the [1966 c. 18.] Finance Act 1966 (maximum duty of 6d. on policy of life insurance made for period not exceeding two years), for " sixpence " substitute " Is. ".

(3)A policy of life insurance which is made solely in connection with the re-insurance of a risk to which a policy duly stamped under the heading " Policy of Life Insurance " relates shall be chargeable with duty under that heading only if it is under seal, or, in Scotland, only if it has a clause of registration, and the duty then chargeable shall not exceed 10s.

PART IIISpecial Provisions Connected with the New Currency

Bank notes (rates)

18As from 15th February 1971, the heading "Bank Note" in Schedule 1 to the [1891 c. 39.] Stamp Act 1891 shall be amended by substituting for the references to 5d., 10d., Is. 3d., Is. 9d., 2s. 0d., 3s. 0d., 5s. 0d. and 8s. 6d. references respectively to 2p., 4p., 6p., 9p., 10p., 15p., 25p. and 43p.

Late stamping etc.

19(1)Where immediately before 15th February 1971 any instrument chargeable with stamp duty is either not stamped or overstamped or insufficiently stamped, the amount of duty then chargeable, or properly chargeable, on the instrument, or, in the case of an insufficiently stamped instrument, the amount of additional duty then chargeable thereon, shall thereafter become, for all the purposes of the enactments relating to stamp duties—

(a)the equivalent of that amount in the new currency, reduced where that equivalent is not a multiple of 5p. to the nearest such multiple, or

(b)5p. if the said equivalent is less than l0p.

(2)In sub-paragraph (1) above, " the new currency " means the new currency of the United Kingdom provided for by the [1967 c. 47.] Decimal Currency Act 1967.

Section 36(8).

SCHEDULE 8Repeals

PART IGaming Licence Duty

PART IIOther Customs and Excise Repeals

PART IIIOccupational Pension Schemes

PART IVStamp Duty Repeals having effect from 1st August 1970

PART VStamp Duty Repeals having Effect from 1st February 1971

PART VIMiscellaneous Repeals

PART VIIObsolete or Unnecessary Provisions in Taxes Acts