SCHEDULES

39[F1(1)During the transitional period it shall be the duty of British Telecommunications to discharge the excepted liabilities as they fall to be discharged.U.K.

(2)Subject to sub-paragraph (3) below, the excepted liabilities shall be discharged, and any expenses incurred by British Telecommunications under this paragraph shall be met, out of sums received by British Telecommunications in right of or on the disposal of such debentures of the successor company as the Secretary of State, with the approval of the Treasury, may transfer to British Telecommunications (in this paragraph referred to as “the transferred debentures”).

(3)British Telecommunications may not dispose of any of the transferred debentures without the consent of the Secretary of State given with the approval of the Treasury.

(4)Where so much of any sums so received as is held by British Telecommunications on any day exceeds the aggregate for that day of—

(a)any excepted liability falling to be discharged; and

(b)any expenses falling to be met under this paragraph,

the excess shall be applied by British Telecommunications in such manner as the Secretary of State, with the approval of the Treasury, may direct; and a direction under this sub-paragraph may require the whole or any part of the excess to be paid into the Consolidated Fund.

(5)Where so much of any sums so received as is held by British Telecommunications on any day falls short of the aggregate for that day of—

(a)any excepted liability falling to be discharged; and

(b)any expenses falling to be met under this paragraph,

the deficiency shall be made good by the Secretary of State out of money provided by Parliament.

(6)During the transitional period British Telecommunications shall, as respects its duties under this paragraph, keep proper accounts and proper records in relation thereto and shall, as soon as may be after the end of each financial year—

(a)prepare a report on the performance by it during that year of those duties; and

(b)transmit the report to the Secretary of State who shall consider it and lay copies of it before each House of Parliament.

(7)British Telecommunications shall be exempt from income tax and corporation tax in respect of—

(a)income accruing to it in right of the transferred debentures; and

(b)chargeable gains accruing to it on the disposal of those debentures;

and in so far as the exemption conferred by this sub-paragraph calls for repayment of tax, effect shall be given thereto by means of a claim.

(8)Nothing in section 72(1) of this Act shall be taken—

(a)as requiring any payments made or expenses incurred by British Telecommunications under this paragraph to be regarded for corporation tax purposes as made or incurred by the successor company; or

(b)as requiring any payments made by the successor company to British Telecommunications in pursuance of the transferred debentures to be disregarded for those purposes.

(9)Section 82(4) of the 1981 Act (tax provisions) shall have effect during the transitional period as if any reference to persons who are employees of the Post Office included a reference to persons who are employees of the successor company.

(10)In this paragraph—

• “debenture” includes debenture stock;

• “financial year” means the period beginning on the transfer date and ending with the next following 31st March or each subsequent period of twelve months ending with 31st March.]