Part IU.K. Customs and Excise

Duties of excise: ratesU.K.

1 Beer, wine, made-wine and cider.U.K.

(1)In section 36 of the M1Alcoholic Liquor Duties Act 1979 (excise duty on beer)—

(a)for “£25.80” and “£0.86” there shall be substituted “ £27.00 ” and “ £0.90 ” respectively; and

(b)for the words from “at the rate” onwards there shall be substituted the words “ at the rate of £0.90 per hectolitre for every degree by which the original gravity of the beer exceeds 1000 degrees ”.

(2)In sections 42(6) and 43(4) of that Act (rates of drawback), the words “but as respects” onwards shall cease to have effect.

(3)For the Table of rates of duty in Schedule 1 to that Act (wine and made-wine) there shall be substituted the Table in Part I of Schedule 1 to this Act.

(4)In section 62(1) of that Act (excise duty on cider) for “£15.80” there shall be substituted “ £17.33 ”.

(5)That Act shall have effect subject to the amendments set out in Part II of Schedule 1 to this Act (which relate to beverages of an alcoholic strength not exceeding 5.5 per cent.).

(6)In this section—

(a)subsections (1)(a), (3) and (4) (with Part I of Schedule 1 to this Act) shall be deemed to have come into force at 6 o’clock in the evening of 15th March 1988;

(b)subsections (1)(b) and (2) shall come into force on 1st October 1988; and

(c)subsection (5) (with Part II of Schedule 1 to this Act) shall come into force on such day as the Commissioners may by order made by statutory instrument appoint;

and different days may be appointed under paragraph (c) above for different provisions or different purposes.

2 Tobacco products.U.K.

(1)For the Table in Schedule 1 to the M2Tobacco Products Duty Act 1979 there shall be substituted—

(2)This section shall be deemed to have come into force on 18th March 1988.

3 Hydrocarbon oil.U.K.

(1)In section 6(1) of the M3Hydrocarbon Oil Duties Act 1979, for “£0.1938” (light oil) and “£0.1639” (heavy oil) there shall be substituted “ £0.2044 ” and “ £0.1729 ” respectively.

(2)In section 13A of that Act (rebate on unleaded petrol), for “£0.0096” there shall be substituted “ £0.0202 ”.

(3)This section shall be deemed to have come into force at 6 o’clock in the evening of 15th March 1988.

4 Vehicles excise duty.U.K.

F1(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F2(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)In Part I of Schedule 3 to each Act (annual rates of duty on tractors etc.)—

(a)

F3F1(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F4(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Duties of excise: other provisionsU.K.

5 Relief from excise duty on goods imported for testing etc.U.K.

(1)After section 11 of the M4Customs and Excise Duties (General Reliefs) Act 1979 there shall be inserted—

“11A Relief from excise duty on goods imported for testing etc.

(1)The Commissioners may by order provide that, in such cases and subject to such exceptions as may be specified in the order, goods imported into the United Kingdom for the sole or main purpose—

(a)of being examined, analysed or tested; or

(b)of being used to test other goods,

shall be relieved from excise duty chargeable on importation; and any such relief may take the form either of an exemption from payment of duty or of a provision whereby the sum payable by way of duty is less than it otherwise would be.

(2)An order under this section—

(a)may make any relief for which it provides subject to conditions specified in or under the order, including conditions to be complied with after the importation of the goods to which the relief applies;

(b)may contain such incidental and supplementary provisions as the Commissioners think necessary or expedient; and

(c)may make different provision for different cases.

(3)In this section, references to excise duty include any additions to such duty by virtue of section 1 of the Excise Duties (Surcharges or Rebates) Act 1979.”

(2)In section 17 of that Act (statutory instruments containing orders or regulations: parliamentary procedure)—

(a)after “7” in subsection (3) and after “4” in subsection (4) there shall be inserted “ , 11A ”; and

(b)for “or 4” in subsection (5) there shall be substituted “ , 4 or 11A ”.

6 Remission of duty in respect of spirits used for medical or scientific purposes.U.K.

(1)For section 8 of the M5 Alcoholic Liquor Duties Act 1979 there shall be substituted—

“8 Remission of duty in respect of spirits used for medical or scientific purposes.

(1)Where a person proposes to use spirits —

(a)in the manufacture or preparation of any article recognised by the Commissioners as being an article used for medical purposes; or

(b)for scientific purposes, the Commissioners may, if they think fit and subject to such conditions as they see fit to impose, authorise that person to receive, and permit the delivery from warehouse to that person of, spirits for that use without payment of the duty chargeable thereon.

(2)If any person contravenes or fails to comply with any condition imposed under this section then, in addition to any other penalty he may have incurred, he shall be liable on summary conviction to a penalty of level 3 on the standard scale.”

(2)In section 22 of that Act (drawback on British compounds and spirits of wine), subsection (7) shall cease to have effect.

(3)

F5(4)In section 33 of that Act (restrictions on use of certain goods relieved from spirits duty)—

(a)in paragraph (c) of subsection (1), for the word “repayment” there shall be substituted the word “ remission ”;

(b)paragraph (d) of that subsection and the word “or” immediately preceding that paragraph shall cease to have effect; and

(c)in paragraph (b) of subsection (2), for the words “repaid or assumed to be repayable” there shall be substituted the word “ remitted ”.

7 Meaning of “sparkling” in relation to wine and made-wine.U.K.

In Schedule 1 to the M6 Alcoholic Liquor Duties Act 1979 (wine and made-wine), in paragraph 1(1) under the heading “Interpretation” (meaning of “sparkling”), for the words “1 bar in excess of atmospheric pressure” there shall be substituted the words “ 1.5 bars in excess of atmospheric pressure ”.

ManagementU.K.

8 Disclosure of information as to imports.U.K.

(1)The Commissioners may, for the purpose of supplementing the information as to imported goods which may be made available to persons other than the Commissioners, disclose information to which this section applies to such persons as they think fit.

(2)Such information may be so disclosed on such terms and conditions (including terms and conditions as to the payment of fees or charges to the Commissioners and the making of the information available to other persons) as the Commissioners think fit.

(3)This section applies to information consisting of the names and addresses of persons declared as consignees in entries of imported goods, arranged by reference to such classifications of imported goods as the Commissioners think fit.

(4)This section shall be construed as if it were contained in the M7Customs and Excise Management Act 1979.

9 Approval and regulation of warehouses.U.K.

(1)In section 92(2) of the Customs and Excise Management Act 1979 (approval of warehouses), for paragraph (b) there shall be substituted—

“(b)of such other goods as the Commissioners may allow to be warehoused—

(i)for exportation or for use as stores in cases where relief from or repayment of any customs duty or other payment is conditional on their exportation or use as stores; or

(ii)for exportation or for use for a purpose referred to in a Community regulation in cases where payment of an export refund under such a regulation is conditional on their exportation or use for such a purpose,”

(2)In section 93(2) of that Act (regulation of warehouses and warehoused goods), in paragraph (c) the words “(other than operations consisting of the mixing of spirits with wine or made-wine)” shall cease to have effect.

10 Power to search persons.U.K.

(1)In subsection (1) of section 164 of the M8 Customs and Excise Management Act 1979 (power to search persons)—

(a)after the words “person to whom this section applies” there shall be inserted the words “ (referred to in this section as the suspect) ”; and

(b)for the words from “any officer” onwards there shall be substituted the words “ an officer may exercise the powers conferred by subsection (2) below and, if the suspect is not under arrest, may detain him for so long as may be necessary for the exercise of those powers and (where applicable) the exercise of the rights conferred by subsection (3) below ”.

(2)For subsections (2) and (3) of that section there shall be substituted—

“(2)The officer may require the suspect—

(a)to permit such a search of any article which he has with him; and

(b)subject to subsection (3) below, to submit to such searches of his person, whether rub-down, strip or intimate,

as the officer may consider necessary or expedient; but no such requirement may be imposed under paragraph (b) above without the officer informing the suspect of the effect of subsection (3) below.

(3)If the suspect is required to submit to a search of his person, he may require to be taken—

(a)except in the case of a rub-down search, before a justice of the peace or a superior of the officer concerned; and

(b)in the excepted case, before such a superior;

and the justice or superior shall consider the grounds for suspicion and direct accordingly whether the suspect is to submit to the search.

(3A)A rub-down or strip search shall not be carried out except by a person of the same sex as the suspect; and an intimate search shall not be carried out except by a suitably qualified person.”

(3)After subsection (4) of that section there shall be inserted—

“(5)In this section—

• “intimate search” means any search which involves a physical examination (that is, an examination which is more than simply a visual examination) of a person’s body orifices;

• “rub-down search” means any search which is neither an intimate search nor a strip search;

• “strip search” means any search which is not an intimate search but which involves the removal of an article of clothing which—

(a)is being worn (wholly or partly) on the trunk; and

(b)is being so worn either next to the skin or next to an article of underwear;

(6)Notwithstanding anything in subsection (4) of section 48 of the Criminal Justice (Scotland) Act 1987 (detention and questioning by customs officers), detention of the suspect under subsection (1) above shall not prevent his subsequent detention under subsection (1) of that section.”

11 Time limits for arrest and proceedings.U.K.

(1)In section 138(1) of the M9Customs and Excise Management Act 1979 (power to arrest within 3 years of commission of offence) for the words “3 years” there shall be substituted the words “ 20 years ”.

(2)

F6(3)This section has effect in relation to offences committed after the passing of this Act.

12 Punishment of offences.U.K.

(1)In the following enactments (which provide for the punishment on conviction on indictment of certain offences), namely—

(a)sections 50(4)(b), 53(9)(b), 63(6)(b), 68(3)(b), 100(4)(b), 159(7)(b) and 170(3)(b) of the M10Customs and Excise Management Act 1979;

(b)sections 10(7)(b), 13(5)(b) and 14(8)(b) of the M11Hydrocarbon Oil Duties Act 1979;

(c)paragraph 16(1)(b) of Schedule 3 to the M12Betting and Gaming Duties Act 1981; and

F7(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

for the words “2 years” or “two years” there shall be substituted the words “ 7 years ” or “ seven years ”, as appropriate.

(2)For subsection (2) of section 68A of the Customs and Excise Management Act 1979 there shall be substituted—

“(2)A person guilty of an offence under this section shall be liable—

(a)on summary conviction, to a penalty of the prescribed sum or of three times the value of the goods, whichever is the greater, or to imprisonment for a term not exceeding 6 months, or to both; or

(b)on conviction on indictment, to a penalty of any amount, or to imprisonment for a term not exceeding 7 years, or to both.”

(3)For subsections (1) and (2) of section 136 of that Act there shall be substituted—

“(1)If any person, with intent to defraud Her Majesty, obtains or attempts to obtain, or does anything whereby there might be obtained by any person, any amount by way of drawback, allowance, remission or repayment of, or any rebate from, any duty in respect of any goods which—

(a)is not lawfully payable or allowable in respect thereof; or

(b)is greater than the amount so payable or allowable,

he shall be guilty of an offence under this subsection.

(1A)If any person, without such intent as is mentioned in subsection (1) above, does any of the things there mentioned, he shall be guilty of an offence under this subsection.

(2)A person guilty of an offence under subsection (1) above shall be liable—

(a)on summary conviction, to a penalty of the prescribed sum or of three times the value of the goods, whichever is the greater, or to imprisonment for a term not exceeding 6 months, or to both; or

(b)on conviction on indictment, to a penalty of any amount, or to imprisonment for a term not exceeding 7 years, or to both;

and a person guilty of an offence under subsection (1A) above shall be liable on summary conviction to a penalty of level 3 on the standard scale or three times the amount which was or might have been improperly obtained or allowed, whichever is the greater.” and in subsection (3) of that section, after the words “subsection (1)” there shall be inserted the words “ or (1A) ”.

(4)Paragraph 13 of Schedule 1 F8. . .to the M13Betting and Gaming Duties Act 1981 shall F8. . .be amended as follows—

(a)in sub-paragraph (3), in paragraph (a), the words from “or, with intent” to “material particular” shall cease to have effect;

(b)after that paragraph there shall be inserted-

“(aa)in that connection, 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”

(c)in paragraph (ii) of that sub-paragraph, for the words “two years” there shall be substituted the words “ the maximum term ”; and

(d)after that sub-paragraph there shall be inserted—

“(4)In sub-paragraph (3) above, “the maximum term” means two years in the case of an offence under paragraph (a) and seven years in the case of an offence under paragraph (aa) or (b) of that sub-paragraph.”

F9(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)This section has effect in relation to offences committed after the passing of this Act.

F10Part IIU.K. Value Added Tax

ExemptionsU.K.

13. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

AdministrationU.K.

14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Civil penaltiesU.K.

16. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

MiscellaneousU.K.

20. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part IIIU.K. Income Tax, Corporation Tax and Capital Gains Tax

Chapter IU.K. General

Tax rates and personal reliefsU.K.

F1423 Charge and basic rate of income tax for 1988-89.U.K.

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F1424 Higher and additional rates of income tax.U.K.

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F1425 Personal reliefs.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26 Charge and rate of corporation tax for financial year 1988.U.K.

Corporation tax shall be charged for the financial year 1988 at the rate of 35 per cent.

27 Corporation tax: small companies.U.K.

(1)For the financial year 1988 the small companies rate shall be 25 per cent.

(2)For the financial year 1988 the fraction mentioned in section 13(2) of the Taxes Act 1988, and in section 95(2) of the M24Finance Act 1972, (marginal relief for small companies) shall be one fortieth.

F1528. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

29 Life assurance premium relief.U.K.

(1)In sections 266(5)(a) and 274(3)(a) of the Taxes Act 1988, and in paragraph 3(3)(a) of Schedule 14 to that Act, (rate of relief on premiums on life policies etc.) for the words “15 per cent.” wherever they occur there shall be substituted the words “ 12.5 per cent. ”.

(2)This section shall have effect on and after 6th April 1989.

F1630. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

31 Non-residents’ personal reliefs.U.K.

(1)For the year 1990-91 and subsequent years of assessment section 278 of the Taxes Act 1988 (which with certain exceptions denies relief under Chapter I of Part VII to non-residents) shall have effect with the following amendments.

F17(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)After subsection (2) there shall be inserted—

“(2A)Notwithstanding subsection (2) above, no relief shall be given under section 257D in a case where the husband is not resident in the United Kingdom.”

(4)Subsections (3) to (7) shall be omitted.

Married couplesU.K.

32 Abolition of aggregation of income.U.K.

Section 279 of the Taxes Act 1988 (which treats the income of a woman living with her husband as his income for income tax purposes) shall not have effect for the year 1990-91 or any subsequent year of assessment.

33 Personal allowance and married couple’s allowance.U.K.

The Taxes Act 1988 shall have effect for the year 1990-91 and subsequent years of assessment with the substitution of the following sections for section 257—

“257 Personal allowance.

(1)The claimant shall be entitled to a deduction from his total income of £2,605.

(2)If the claimant proves that he is at any time within the year of assessment of the age of 65 or upwards, he shall be entitled to a deduction from his total income of £3,180 (instead of the deduction provided for by subsection (1) above).

(3)If the claimant proves that he is at any time within the year of assessment of the age of 80 or upwards, he shall be entitled to a deduction from his total income of £3,310 (instead of the deduction provided for by subsection (1) or (2) above).

(4)For the purposes of subsections (2) and (3) above a person who would have been of or over a specified age within the year of assessment if he had not died in the course of it shall be treated as having been of that age within that year.

(5)In relation to a claimant whose total income for the year of assessment exceeds £10,600, subsections (2) and (3) above shall apply as if the amounts specified in them were reduced by two-thirds of the excess (but not so as to reduce those amounts below that specified in subsection (1) above).

257A Married couple’s allowance.

(1)If the claimant proves that for the whole or any part of the year of assessment he is a married man whose wife is living with him, he shall be entitled to a deduction from his total income of £1,490.

(2)If the claimant proves that for the whole or any part of the year of assessment he is a married man whose wife is living with him, and that either of them is at any time within that year of the age of 65 or upwards, he shall be entitled to a deduction from his total income of £1,855 (instead of the deduction provided for by subsection (1) above).

(3)If the claimant proves that for the whole or any part of the year of assessment he is a married man whose wife is living with him, and that either of them is at any time within that year of the age of 80 or upwards, he shall be entitled to a deduction from his total income of £1,895 (instead of the deduction provided for by subsection (1) or (2) above).

(4)For the purposes of subsections (2) and (3) above a person who would have been of or over a specified age within the year of assessment if he had not died in the course of it shall be treated as having been of that age within that year.

(5)In relation to a claimant whose total income for the year of assessment exceeds £10,600, subsections (2) and (3) above shall apply as if the amounts specified in them were reduced by—

(a)two-thirds of the excess, less

(b)any reduction made in his allowance under section 257 by virtue of subsection (5) of that section,

(but not so as to reduce the amounts so specified below the amount specified in subsection (1) above).

(6)A man shall not be entitled by virtue of this section to more than one deduction for any year of assessment; and in relation to a claim by a man who becomes married in the year of assessment and has not previously in the year been entitled to relief under this section, this section shall have effect as if the amounts specified in subsections (1) to (3) above were reduced by one twelfth for each month of the year ending before the date of the marriage.

In this subsection “month” means a month beginning with the 6th day of a month of the calendar year.

257B Transfer of relief under section 257A.

(1)Where —

(a)a man is entitled to relief under section 257A, but

(b)the amount which he is entitled to deduct from his total income by virtue of that section exceeds what is left of his total income after all other deductions have been made from it,

his wife shall be entitled to a deduction from her total income of an amount equal to the excess.

(2)In determining for the purposes of subsection (1)(b) above the amount that is left of a person’s total income for a year of assessment after other deductions have been made from it, there shall be disregarded any deduction made—

(a)on account of any payments of relevant loan interest which become due in that year and to which section 369 applies, or

(b)under section 289.

(3)This section shall not apply for a year of assessment unless the claimant’s husband has given to the inspector written notice that it is to apply; and any such notice—

(a)shall be given not later than six years after the end of the year of assessment to which it relates,

(b)shall be in such form as the Board may determine, and

(c)shall be irrevocable.

257C Indexation of amounts in sections 257 and 257A.

(1)If the retail prices index for the month of December preceding a year of assessment is higher than it was for the previous December, then, unless Parliament otherwise determines, sections 257 and 257A shall apply for that year as if for each amount specified in them as they applied for the previous year (whether by virtue of this section or otherwise) there were substituted an amount arrived at by increasing the amount for the previous year by the same percentage as the percentage increase in the retail prices index, and—

(a)if in the case of an amount specified in sections 257(5) and 257A(5) the result is not a multiple of £100, rounding it up to the nearest amount which is such a multiple;

(b)if in the case of any other amount the increase is not a multiple of £10, rounding the increase up to the nearest amount which is such a multiple.

(2)Subsection (1) above shall not require any change to be made in the amounts deductible or repayable under section 203 between the beginning of a year of assessment and 5th May in that year.

(3)The Treasury shall in each year of assessment make an order specifying the amounts which by virtue of subsection (1) above will be treated as specified for the following year of assessment in sections 257 and 257A.

(4)This section shall have effect in relation to reliefs for the year 1990-91 (as well as for later years); and for that purpose it shall be assumed that sections 257 and 257A applied for the year 1989-90 as they apply, apart from this section, for the year 1990-91.

257D Transitional relief: husband with excess allowances.

(1)Where—

(a)a husband and wife are living together for the whole or any part of the year 1990-91 and section 279 (but not section 287) applied in relation to them for the whole or any part of the year 1989-90, and

(b)the deductions which the husband was entitled to make from his total income for the year 1989-90 under this Chapter exceed the aggregate mentioned in subsection (2) below,

the wife shall be entitled to a deduction from her total income for the year 1990-91 of an amount equal to the excess.

(2)The aggregate referred to in subsection (1) above is the aggregate of—

(a)the husband’s total income for the year 1990-91, and

(b)the deductions which the wife is entitled to make from her total income for that year under this Chapter (apart from this section).

(3)Where—

(a)a husband and wife are living together for the whole or any part of the year 1990-91 and for part of the year 1989-90 but section 279 did not apply in relation to them for any part of the year 1989-90, and

(b)the deductions which the husband was entitled to make from his total income for the year 1989-90 under this Chapter, apart from section 257(6), exceed his total income for the year 1990-91,

then, subject to subsection (4) below, the wife shall be entitled to a deduction from her total income for the year 1990-91 of an amount equal to the excess.

(4)If the deductions which the wife is entitled to make from her total income for the year 1990-91 under this Chapter (apart from this section) exceed the lesser of—

(a)her total income for the year 1989-90, and

(b)the deductions which she was entitled to make from her total income for that year under this Chapter, apart from section 259, section 262 and section 280,

the deduction provided for by subsection (3) above shall be reduced by an amount equal to the excess.

(5)Where—

(a)a husband and wife are living together for the whole or any part of the year 1991-92 or any subsequent year of assessment (“the year in question”), and

(b)they were also living together throughout the immediately preceding year of assessment and the wife made a deduction from her total income for that year under this section, and

(c)the deductions which the wife is entitled to make from her total income under this Chapter (apart from this section) are either no greater for the year in question than for the immediately preceding year, or greater by a margin which does not exceed the deduction referred to in paragraph (b) above, and

(d)the deductions which the husband is entitled to make from his total income for the year in question under this Chapter, apart from section 257A and section 265, exceed his total income for that year,

the wife shall be entitled to a deduction from her total income for that year.

(6)The amount of that deduction shall be equal to—

(a)the deduction referred to in subsection (5)(b) above, reduced where applicable by an amount equal to the margin referred to in subsection (5)(c), or

(b)the excess referred to in subsection (5)(d),

whichever is less.

(7)In determining for the purposes of subsection (5)(b) above whether the wife made a deduction from her total income for the immediately preceding year of assessment under this section, and the amount of any such deduction, it shall be assumed that a deduction under this section is made after all other deductions (except any deduction under section 289).

(8)In determining for the purposes of this section a person’s total income for a year of assessment there shall be disregarded any deduction made—

(a)on account of any payments of relevant loan interest which become due in that year and to which section 369 applies, or

(b)under this Chapter or under section 289;

and in determining for the purposes of subsection (1)(b) above the deductions which a man was entitled to make under this Chapter for the year 1989-90, any application under section 283 shall be disregarded.

(9)This section shall not apply for a year of assessment unless the claimant’s husband has given to the inspector written notice that it is to apply; and any such notice—

(a)shall be given not later than six years after the end of the year of assessment to which it relates,

(b)shall be in such form as the Board may determine, and

(c)shall be irrevocable.

(10)A notice given under subsection (9) above in relation to a year of assessment shall have effect also as a notice under section 257B(3) (and, where it is relevant, under section 265(5)).

257E Transitional relief: the elderly.

(1)This section shall apply in relation to a claimant for any year of assessment for the whole or any part of which he has his wife living with him if he proves—

(a)that for the year 1989-90 he was entitled to relief by virtue of section 257(2)(a) of this Act (as it had effect for that year) and that his entitlement was due to her age and not to his (he being under the age of 65 throughout that year), or

(b)that for the year 1989-90 he was entitled to relief by virtue of section 257(3)(a) of this Act (as it had effect for that year) and that his entitlement was due to her age and not to his (he being under the age of 80 throughout that year),

and, in either case, that the amount of that relief exceeded the aggregate amount of any relief to which he would be entitled for the year 1990-91 under sections 257 and 257A (apart from this section).

(2)Where this section applies, section 257 shall have effect—

(a)in a case within subsection (1)(a) above, as if for the amount specified in subsection (1) of that section there were substituted £3,180, and

(b)in a case within subsection (1)(b) above, as if for the amounts specified in subsections (1) and (2) of that section there were substituted £3,310.

(3)Section 257(5) shall have effect in relation to section 257(1) as modified by this section as it has effect in relation to section 257(2) and (3); and in all cases the reference in section 257(5) to the amount specified in section 257(1) is a reference to the amount specified apart from this section.

(4)The references in section 257C to the amounts specified in section 257 are references to the amounts specified apart from this section.

(5)In determining for the purposes of this section the amount of any reliefs to which a person was entitled for the year 1989-90, any application under section 283 shall be disregarded.

257F Transitional relief: separated couples.

If the claimant proves—

(a)that he and his wife ceased to live together before 6th April 1990 but that ever since they ceased to live together they have continued to be married to one another and she has been wholly maintained by him, and

(b)that he is not entitled to make any deduction in respect of the sums paid for her maintenance in computing for income tax purposes the amount of his income for the year to which the claim relates, and

(c)that he was entitled to a deduction for the year 1989-90 by virtue of section 257(1)(a) of this Act (as it had effect for that year) and, if the claim relates to a year later than 1990-91, that he has been entitled by virtue of this section to a deduction under section 257A for each intervening year,

sections 257A and 257E (but not section 257B or section 257D) shall have effect for the year to which the claim relates as if his wife were living with him.”

F1834 Jointly held property.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35 Minor and consequential provisions.U.K.

Schedule 3 to this Act (which makes provision consequential on sections 32 and 33 above and other minor amendments relating to the treatment for income tax purposes of husbands, wives, widowers and widows) shall have effect.

Annual paymentsU.K.

36 Annual payments.U.K.

F19(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F20(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F20(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F20(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F20(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F20(5A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F20(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F2137 Maintenance payments under existing obligations:U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F2238 Maintenance payments under existing obligations:U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F2339. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F2440 Provisions supplementary to sections 37 to 39.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Relief for interestU.K.

41 Qualifying maximum for loans.U.K.

For the year 1988-89 the qualifying maximum defined in section 367(5) of the Taxes Act 1988 (limit on relief for interest on certain loans) shall be £30,000.

F2542. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F2643. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F2744. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Benefits in kindU.K.

45 Car benefits.U.K.

(1)In Schedule 6 to the Taxes Act 1988 (taxation of directors and others in respect of cars) for Part I (tables of flat rate cash equivalents) there shall be substituted—

“Part IU.K.

Tables of Flat Rate Cash Equivalents

(2)This section shall have effect for the year 1988-89 and subsequent years of assessment.

F2846 Car parking facilities.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

47 Entertainment: non-cash vouchers.U.K.

F29(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)In subsection (1) of section 36 of the M25Finance (No. 2) Act 1975 (vouchers other than cash vouchers), for the words “Subject to subsection (2) below” there shall be substituted the words “ Subject to the provisions of this section ”.

(3)The provision set out in subsection (1) above shall be inserted after subsection (3A) of that section as subsection (3B) with the substitution—

(a)for the reference to section 839 of the Taxes Act 1988 of a reference to section 533 of the Taxes Act 1970; and

(b)for any reference to a non-cash voucher of a reference to a voucher.

(4)The amendment made by subsection (1) above shall have effect for the year 1988-89 and subsequent years of assessment; and the amendments made by subsections (2) and (3) above shall have effect for the year 1987-88.

48 Entertainment: credit-tokens.U.K.

F30(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)The provision set out in subsection (1) above shall be inserted after subsection (3) of section 36A of the M26Finance (No. 2) Act 1975 (credit-tokens) as subsection (3A) with the substitution for the reference to section 839 of the Taxes Act 1988 of a reference to section 533 of the Taxes Act 1970.

(3)The amendment made by subsection (1) above shall have effect for the year 1988-89 and subsequent years of assessment; and the amendment made by subsection (2) above shall have effect for the year 1987-88.

49 Entertainment of directors and higher-paid employees.U.K.

F31(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)The provision set out in subsection (1) above shall be added at the end of section 62 of the M27Finance Act 1976 as subsection (9) with the substitution—

(a)for the reference to section 154 of the Taxes Act 1988 of a reference to section 61 of the 1976 Act; and

(b)for the reference to section 839 of the Taxes Act 1988 of a reference to section 533 of the Taxes Act 1970.

(3)The amendment made by subsection (1) above shall have effect for the year 1988-89 and subsequent years of assessment; and the amendment made by subsection (2) above shall have effect for the year 1987-88.

Business expansion schemeU.K.

F3250. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

51 Restriction of relief.U.K.

(1)The Taxes Act 1988 shall have effect, and be deemed always to have had effect, with the following amendments, namely—

(a)in section 289(12)(b), the substitution of the words “sections 290A, 293” for the words “ sections 293 ”; and

(b)the insertion after section 290 of the following section—

“290A Restriction of relief where amounts raised exceed permitted maximum.

(1)Where—

(a)a company raises any amount through the issue of eligible shares after 15th March 1988; and

(b)the aggregate of that amount and of all other amounts (if any) so raised within the period mentioned in subsection (2) below exceeds £500,000,

the relief shall not be given in respect of the excess.

(2)The period referred to in subsection (1) above is—

(a)the period of 6 months ending with the date of the issue of the shares; or

(b)the period beginning with the preceding 6th April and ending with the date of that issue,

whichever is the longer.

(3)In determining the aggregate mentioned in subsection (1) above, no account shall be taken of any amount—

(a)which is subscribed by a person other than an individual who qualifies for relief; or

(b)as respects which relief is precluded by section 290 or this section.

(4)Where—

(a)at any time within the relevant period, the company in question or any of its subsidiaries carries on any trade or part of a trade in partnership, or as a party to a joint venture, with one or more other persons; and

(b)that other person, or at least one of those other persons, is a company,

the reference to £500,000 in subsection (1) above shall have effect as if it were a reference to—

(5)Where this section precludes the giving of relief on claims in respect of shares issued to two or more individuals, the available relief shall be divided between them in proportion to the amounts which have been respectively subscribed by them for the shares to which their claims relate and which would, apart from this section, be eligible for relief.

(6)Where—

(a)in the case of a company falling within subsection (2)(a) of section 293, the qualifying trade or each of the qualifying trades is a trade to which subsection (7) below applies;

(b)in the case of a company falling within subsection (2)(b)(i) of that section, the subsidiary or each of the subsidiaries is a dormant subsidiary or exists wholly, or substantially wholly, for the purpose of carrying on one or more qualifying trades which or each of which is a trade to which subsection (7) below applies; or

(c)in the case of a company falling within subsection (2)(b)(ii) of that section, the requirements mentioned in each of paragraphs (a) and (b) above are satisfied,

subsections (1) and (4) above shall have effect as if for the amount there specified there were substituted £5 million.

(7)This subsection applies to a trade if it consists, wholly or substantially wholly, of operating or letting ships, other than oil rigs or pleasure craft, and—

(a)every ship operated or let by the company carrying on the trade is beneficially owned by the company;

(b)every ship beneficially owned by the company is registered in the United Kingdom;

(c)throughout the relevant period the company is solely responsible for arranging the marketing of the services of its ships; and

(d)the conditions mentioned in section 297(7) are satisfied in relation to every letting by the company.

(8)Where—

(a)any of the requirements mentioned in paragraphs (a) to (c) of subsection (7) above are not satisfied in relation to any ships; or

(b)any of the conditions referred to in paragraph (d) of that subsection are not satisfied in relation to any lettings,

the trade shall not thereby be precluded from being a trade to which that subsection applies if the operation or letting of those ships, or, as the case may be, those lettings do not amount to a substantial part of the trade.

(9)The Treasury may by order amend any of the foregoing provisions of this section by substituting a different amount for the amount for the time being specified there.

(10)Where—

(a)the issue of the eligible shares is made in pursuance of a prospectus published, or an offer in writing made, before 15th March 1988;

(b)the shares are issued after that date and before 6th April 1988; and

(c)subsection (6) above does not apply,

subsections (1) and (4) above shall have effect as if for the amount there specified there were substituted £1 million.

(11)In this section—

• “let” means let on charter and “letting” shall be construed accordingly;

• “oil rig” and “pleasure craft” have the same meanings as in section 297;

• “prospectus” has the meaning given by section 744 of the Companies Act 1985 or Article 2(3) of the Companies (Northern Ireland) Order 1986.”

(2)Schedule 5 to the M28Finance Act 1983 shall be deemed always to have had effect as if—

(a)in paragraph 2(7), for the words “paragraphs 5” there had been substituted the words “ paragraphs 3A, 5 ”; and

(b)the provisions set out in subsection (1)(b) above had been inserted, with any necessary modifications, after paragraph 3 as paragraph 3A.

52 Valuation of interests in land.U.K.

(1)In section 294 of the Taxes Act 1988 (companies with interests in land), after subsection (5) there shall be inserted—

“(5A)For the purposes of this section, the value of an interest in any building or other land shall be adjusted by deducting the market value of any machinery or plant which is so installed or otherwise fixed in or to the building or other land as to become, in law, part of it.”

(2)This section shall have effect in relation to valuations which fall to be made after the passing of this Act.

F3353 Approved investment funds.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Pensions etc.U.K.

F3454 Personal pension schemes: commencement.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3455 Personal pension schemes: other amendments.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3456 Occupational pension schemes.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3557 Lump sum benefits paid otherwise than on retirement.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

UnderwritersU.K.

58 Assessment and collection.U.K.

(1)For subsection (2) of section 450 of the Taxes Act 1988 (underwriters) there shall be substituted—

“(2)The aggregate for any year of assessment of—

(a)the profits or gains arising to a member from his underwriting business; and

(b)the profits or gains arising to him from assets forming part of a premiums trust fund,

shall be chargeable to tax under Case I of Schedule D; but nothing in this subsection shall affect the manner in which the amount of those profits or gains is to be computed.

(2A)Schedule 19A shall have effect with respect to the assessment and collection of tax charged under Case I of Schedule D in accordance with this section.”

(2)Section 39 of the M29Finance Act 1973 shall be renumbered as subsection (1) of that section and after that provision as so renumbered there shall be inserted—

“(2)Schedule 16A to this Act shall have effect with respect to the assessment and collection of tax charged under Case I of Schedule D in accordance with Schedule 16 to this Act.”

(3)In Schedule 16 to that Act (underwriters)—

(a)the subsection (2) set out in subsection (1) above shall be inserted after paragraph 2 as paragraph 2A; and

(b)paragraph 16 (assessment on agent) shall cease to have effect.

(4)The provisions set out in Schedule 5 to this Act shall be inserted—

(a)after Schedule 19 to the Taxes Act 1988 as Schedule 19A; and

(b)after Schedule 16 to the Finance Act 1973 as Schedule 16A.

(5)Subsections (1) and (4)(a) above shall have effect for the year1988-89 and subsequent years of assessment; and subsections (2), (3) and (4)(b) above shall have effect for the years 1986-87 and 1987-88.

59 Reinsurance: general.U.K.

(1)In subsection (4) of section 450 of the Taxes Act 1988 (underwriters), for paragraph (b) there shall be substituted—

“(b)any insurance money payable to him under that insurance in respect of a loss shall be taken into account as a trading receipt in computing those profits or gains for the year of assessment which corresponds to the underwriting year in which the loss arose;”

(2)The amendment set out in subsection (1) above shall also be made in paragraph 4 of Schedule 16 to the Finance Act 1973 (underwriters).

(3)Subsection (1) above shall have effect for the year 1988-89 and subsequent years of assessment; and subsection (2) above shall have effect for the years 1985-86, 1986-87 and 1987-88.

60 Reinsurance to close.U.K.

(1)For subsection (5) of section 450 of the Taxes Act 1988 (underwriters) there shall be substituted—

“(5)Subsection (5A) below applies where—

(a)in accordance with the rules or practice of Lloyd’s and in consideration of the payment of a premium, one member agrees with another to meet liabilities arising from the latter’s business for an underwriting year so that the accounts of the business for that year may be closed; and

(b)the member by whom the premium is payable is a continuing member, that is, a member not only of the syndicate as a member of which he is liable to pay the premium (“the reinsured syndicate”) but also of the syndicate as a member of which the other member is entitled to receive it (“the reinsurer syndicate”).

(5A)In any case where this subsection applies—

(a)in computing for the purposes of income tax the profits or gains of the continuing member’s business as a member of the reinsured syndicate, the amount of the premium shall be deductible as an expense of his only to the extent that it is shown not to exceed a fair and reasonable assessment of the value of the liabilities in respect of which it is payable; and

(b)in computing for those purposes the profits or gains of his business as a member of the reinsurer syndicate, those profits or gains shall be reduced by an amount equal to any part of a premium which, by virtue of paragraph (a) above, is not deductible as an expense of his as a member of the reinsured syndicate;

and the assessment referred to above shall be taken to be fair and reasonable only if it is arrived at with a view to producing the result that a profit does not accrue to the member to whom the premium is payable but that he does not suffer a loss.”

(2)The provisions set out in subsection (1) above, but renumbered as subsections (1) and (2) and with the substitution, in the provision renumbered as subsection (1), of the words “subsection (2)” for the words “subsection (5A)”, shall also be substituted for subsections (1) to (4) of section 70 of the M30Finance (No. 2) Act 1987 (underwriters); and in subsection (5) of that section, for the word “underwriter” there shall be substituted the word “ member ”.

(3)In this section—

(a)subsection (1) shall have effect in relation to premiums payable in connection with the closing of accounts of a member’s business for an underwriting year ending in the year 1988-89 or any subsequent year of assessment; and

(b)subsection (2) shall have effect in relation to premiums payable in connection with the closing of accounts of a member’s business for an underwriting year ending in the year 1985-86, 1986-87 or 1987-88.

61 Minor and consequential amendments.U.K.

(1)In the Taxes Act 1988—

F36(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)in section 451, in subsection (1), for paragraph (a) there shall be substituted—

“(a)for the assessment and collection of tax charged in accordance with section 450 (so far as not provided for by Schedule 19A);

(aa)for making, in the event of any changes in the rules or practice of Lloyd’s, such amendments of that Schedule as appear to the Board to be expedient having regard to those changes;”

(c)after that subsection there shall be inserted—

“(1A)Regulations under subsection (1) above may make provision with respect to the year of assessment next but one preceding the year of assessment in which they are made.”; and

(d)in section 452(8), for the words “Case I of Schedule D” there shall be substituted the words “ in accordance with section 450 ” and the words “the investments forming part of the premiums trust fund of the underwriter” shall cease to have effect.

(2)In Schedule 10 to the Taxes Act 1970, in paragraph 7(3), for the words “Case I of Schedule D” there shall be substituted the words “ in accordance with Schedule 16 to M31Finance Act 1973 ” and the words “the investments forming part of the premiums trust fund of the underwriter” shall cease to have effect.

(3)In section 87 of the M32Finance Act 1972, at the beginning of subsection (3) there shall be inserted the words “ Except as provided by Schedule 16 to Finance Act 1973 (underwriters) ”.

(4)In Schedule 16 to the M33Finance Act 1973—

(a)in sub-paragraph (1) of paragraph 17, for paragraph (a) there shall be substituted—

“(a)for the assessment and collection of tax charged in accordance with the preceding provisions of this Schedule (so far as not provided for by Schedule 16A to this Act);

(aa)for making, in the event of any changes in the rules or practice of Lloyd’s, such amendments of that Schedule as appear to the Board to be expedient having regard to those changes;”

(b)after that sub-paragraph, there shall be inserted—

“(1A)Regulations under this paragraph may make provision with respect to the year of assessment next but one preceding the year of assessment in which they are made.”

(5)Subsection (1) above shall have effect for the year 1988-89 and subsequent years of assessment; and subsections (2) to (4) above shall have effect for the years 1986-87 and 1987-88.

Oil licencesU.K.

F3762. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F3863. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F3964. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

MiscellaneousU.K.

F4065 Commercial woodlands.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F4166 Company residence.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F43[F4266A]Residence of SE or SCEU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F4467. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F4568 Priority share allocations for employees etc.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F4669 Share options: loans.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

70 Charities: payroll deduction scheme.U.K.

(1)In section 202(7) of the Taxes Act 1988 (which limits to £120 the deductions attracting relief) for “ £120” there shall be substituted “ £240 ”.

(2)This section shall have effect for the year 1988-89 and subsequent years of assessment.

F4771 Unit trusts: relief on certain payments.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F4872 Entertainment of overseas customers.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

73 Consideration for certain restrictive undertakings.U.K.

F49(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F50(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F50(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F50(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F5174. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

75 Premiums for leases etc.U.K.

Sections 39(3) and 780(5) of, and Schedule 2 to, the Taxes Act 1988 (top-slicing relief where premiums for leases etc. chargeable to income tax) shall not have effect for the year 1988-89 or any subsequent year of assessment.

F5276

• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

chapter IIU.K. Unapproved Employee Share Schemes

PreliminaryU.K.

F5377 Scope of Chapter.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Charges to taxU.K.

F5378 Charge where restrictions removed etc.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F5379 Charge for shares in dependent subsidiaries.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F5380 Charge on special benefits.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

MiscellaneousU.K.

F5381 Changes in interest.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F5382 Company reorganisations etc.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F5383 Connected persons etc.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F5384 Capital gains tax.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F5385 Information.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SupplementaryU.K.

F5386 Meaning of “dependent subsidiary”.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F5387 Other interpretation provisions.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F5388 Transitional provisions.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

89 Consequential amendments.U.K.

In relation to acquisitions of shares or interests in shares on or after 26th October 1987—

(a)for the words from “section 138(1)(a)” to “value of the shares” in F54... section 186(2)(b) (approved profit sharing schemes) of the Taxes Act 1988, and

F55(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

there shall be substituted the words “ section 78 or 79 of the Finance Act 1988 in respect of the shares ”.

chapter IIIU.K. Capital Allowances

F5690. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F5791. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F5892. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F5993. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F6094. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F6195. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

chapter IVU.K. Capital Gains

Re-basing to 1982U.K.

F6296. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F6397. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Unification of rates of tax on income and capital gainsU.K.

F6498. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F6599. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F66100. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F67101. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F68102. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F69103. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Married couplesU.K.

F70104. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Company migrationU.K.

105 Deemed disposal of assets on company ceasing to be resident in U.K.U.K.

F71(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F71(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F71(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F71(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F71(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)In section 765 of the Taxes Act 1988 and section 482 of the Taxes Act 1970, in subsection (1), paragraphs (a) and (b) shall cease to have effect and in paragraph (c) for the words “so resident” there shall be substituted the words “ resident in the United Kingdom ”; but nothing in this subsection shall affect the operation of either section in relation to—

(a)an application for a Treasury consent made before the date of the coming into force of this section; or

(b)such a consent granted on an application so made.

(7)This section and sections 106 and 107 below shall be deemed to have come into force on 15th March 1988.

F72106. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F73107. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

MiscellaneousU.K.

F74108. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F75109. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F76110. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F77111. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F78112. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F79113. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F80114. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F81115. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F82116. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

117 Definition of “investment trust”.U.K.

(1)In section 842 of the Taxes Act 1988 (definition of “investment trust”)—

(a)before paragraph (a) of subsection (1) there shall be inserted—

“(aa)that the company is resident in the United Kingdom; and”

(b)for paragraph (c) of that subsection there shall be substituted—

“(c)that the shares making up the company’s ordinary share capital (or, if there are such shares of more than one class, those of each class) are quoted on the Stock Exchange; and”; and

(c)after that subsection there shall be inserted—

“(1A)For the purposes of paragraph (b) of subsection (1) above and the other provisions of this section having effect in relation to that paragraph—

(a)holdings in companies which are members of a group (whether or not including the investing company) and are not excluded from that paragraph shall be treated as holdings in a single company; and

(b)where the investing company is a member of a group, money owed to it by another member of the group shall be treated as a security of the latter held by the investing company and accordingly as, or as part of, the holding of the investing company in the company owing the money;

and for the purposes of this subsection “group” means a company and all companies which are its 51 per cent. subsidiaries.”

(2)The repeal by the M34Finance (No. 2) Act 1987 of section 93 of the M35Finance Act 1972 shall be treated as not having extended to subsection (6) of that section (amendment of definition of “investment trust” in section 359 of the Taxes Act 1970).

(3)[F83For section 266(4) of the M3Companies Act 1985 there shall be substituted—

“(4)Subsections (1A) to (3) of section 842 of the Income and Corporation Taxes Act 1988 apply for the purposes of subsection (2)(b) above as for those of subsection (1)(b) of that section.”;and for Article 274(4) of the M4Companies (Northern Ireland) Order 1986 there shall be substituted—

(4)Subsections (1A) to (3) of section 842 of the Income and Corporation Taxes Act 1988 apply for the purposes of paragraph (2)(b) as for those of subsection (1)(b) of that section.”]

(4)Subsections (1) [F84and (3)] above shall have effect for companies’ accounting periods ending after 5th April 1988 and subsection (2) above shall have effect for companies’ accounting periods ending on or before that date.

F85118. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

chapter VU.K. Management

AssessmentU.K.

119 Current year assessments.U.K.

(1)Section 29 of the M36Taxes Management Act 1970 (assessment procedure) shall have effect subject to the following amendments.

(2)In subsection (1), after paragraph (b) there shall be added—

“(c)where income tax is charged for a year of assessment in respect of income arising in that year, the inspector may make an assessment during that year to the best of his judgment, by reference to actual income or estimated income (whether from any particular source or generally) or partly by reference to one and partly by reference to the other.”

(3)After subsection (1) there shall be inserted—

“(1A)Where an assessment is made by virtue of subsection (1)(c) above, any necessary adjustments shall be made after the end of the year (whether by way of assessment, repayment of tax or otherwise) to secure that tax is charged in respect of income actually arising in the year.”

Returns of income and gainsU.K.

120 Notice of liability to income tax.U.K.

(1)For section 7 of the Taxes Management Act 1970 there shall be substituted—

“7 Notice of liability to income tax.

(1)Every person who is chargeable to income tax for any year of assessment and has neither—

(a)delivered a return of his profits or gains or his total income for that year, nor

(b)received a notice under section 8 of this Act requiring such a return,

shall, subject to subsections (2) to (5) below, within twelve months from the end of that year, give notice to the inspector that he is so chargeable, specifying each separate source of income.

(2)A source of income is excluded for the purposes of subsection (1) above in relation to any year of assessment if—

(a)all payments of, or on account of, income from it during that year, and

(b)all income from it for that year which does not consist of payments,

have or has been taken into account in the making of deductions or repayments of tax under section 203 of the principal Act.

(3)A source of income is excluded for the purposes of subsection (1) above in relation to any person and any year of assessment if all income from it for that year has been assessed or has been taken into account—

(a)in determining that person’s liability to tax, or

(b)in the making of deductions or repayments of tax under section 203 of the principal Act.

(4)A source of income is excluded for the purposes of subsection (1) above in relation to any person and any year of assessment if all income from it for that year is—

(a)income from which income tax has been deducted;

(b)income from or on which income tax is treated as having been deducted or paid (not being income consisting of a payment to which section 559 of the principal Act applies); or

(c)income chargeable under Schedule F,

and that person is not for that year liable to tax at a rate other than basic rate.

(5)A person shall not be required to give notice under subsection (1) above in respect of a year of assessment if and to the extent that his total income for that year consists of income from sources—

(a)which are excluded under subsections (2) to (4) above, or

(b)in respect of income from which he could not become liable to tax under assessments made more than twelve months after the end of that year.

(6)If any person, for any year of assessment, fails to comply with subsection (1) above as respects any source of income, he shall be liable to a penalty not exceeding the amount of the tax for which he is liable, in respect of income from that source for that year, under assessments made more than twelve months after the end of that year.

(7)In the case of a partner, the reference in subsection (6) above to the tax for which he is liable in respect of income from any source does not include a reference to tax assessable in the name of the partnership on so much of the income from that source as falls to be included in the total income of any other person.”

(2)This section has effect with respect to notices required to be given for the year 1988-89 or any subsequent year of assessment.

F86121. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

122 Notice of liability to capital gains tax.U.K.

(1)Immediately before section 12 of the M37Taxes Management Act 1970 there shall be inserted—

“11A Notice of liability to capital gains tax.

(1)Every person who is chargeable to capital gains tax for any year of assessment and has neither—

(a)delivered a return of his chargeable gains for that year, nor

(b)received a notice under section 8 of this Act requiring such a return,

shall, within twelve months from the end of that year, give notice to the inspector that he is so chargeable; but a person all of whose chargeable gains for a year of assessment have been assessed shall not be required to give notice under this subsection in respect of that year.

(2)If any person, for any year of assessment, fails to comply with subsection (1) above, he shall be liable to a penalty not exceeding the amount of the tax for which he is liable, in respect of his chargeable gains for that year, under assessments made more than twelve months after the end of that year.

(3)In this section references to a person’s chargeable gains for a year of assessment include, if section 45(1) of the Capital Gains Tax Act 1979 applies in relation to him and his wife in that year, her chargeable gains for that year.”

(2)For subsection (1) of section 12 of that Act (information about chargeable gains) there shall be substituted—

“(1)Section 8 of this Act shall apply in relation to capital gains tax as it applies in relation to income tax, and subject to any necessary modifications.”

(3)This section has effect with respect to notices required to be given for the year 1988-89 or any subsequent year of assessment.

Other returns and informationU.K.

123 Three year time limit.U.K.

(1)At the end of section 13 of the M38Taxes Management Act 1970 (returns by persons in receipt of taxable income belonging to others) there shall be added—

“(3)A notice under this section shall not require information as to any money, value, profits or gains received in a year of assessment ending more than three years before the date of the giving of the notice.”

(2)In section 17(1) of that Act (interest paid or credited by banks etc. without deduction of income tax) after the words “during a year” there shall be inserted the words “ of assessment ”.

(3)In section 18 of that Act (particulars of interest paid without deduction of income tax) after subsection (3) there shall be inserted—

“(3A)A notice under this section shall not require information with respect to interest paid in a year of assessment ending more than three years before the date of the giving of the notice.”

(4)At the end of section 19 of that Act (information for the purposes of Schedule A etc.) there shall be added—

“(4)A notice under this section shall not require information with respect to—

(a)the terms applying to the lease, occupation or use of the land, or

(b)consideration given, or

(c)payments arising,

in a year of assessment ending more than three years before the date of the giving of the notice.”

(5)This section has effect with respect to notices given after the passing of this Act.

124 Returns of fees, commissions etc.U.K.

(1)At the end of section 16 of the Taxes Management Act 1970 (fees, commissions etc.) there shall be added—

“(8)In subsection (2) above references to a body of persons include references to any department of the Crown, any public or local authority and any other public body.”

(2)This section has effect with respect to payments made in the year 1988-89 or any subsequent year of assessment.

125 Other payments and licences etc.U.K.

After section 18 of the Taxes Management Act 1970 there shall be inserted—

“18A Other payments and licences etc.

(1)Any person by whom any payment out of public funds is made by way of grant or subsidy shall, on being so required by a notice given to him by an inspector, furnish to the inspector, within the time limited by the notice—

(a)the name and address of the person to whom the payment has been made or on whose behalf the payment has been received, and

(b)the amount of the payment so made or received,

and any person who receives any such payment on behalf of another person shall on being so required furnish to the inspector the name and address of the person on whose behalf the payment has been received, and its amount.

(2)Any person by whom licences or approvals are issued or a register is maintained shall, on being so required by a notice given to him by an inspector, furnish to the inspector, within the time limited by the notice—

(a)the name and address of any person who is or has been the holder of a licence or approval issued by the first-mentioned person, or to whom an entry in that register relates or related; and

(b)particulars of the licence or entry.

(3)The persons to whom this section applies include any department of the Crown, any public or local authority and any other public body.

(4)A notice is not to be given under this section unless (in the inspector’s reasonable opinion) the information required is or may be relevant to any tax liability to which a person is or may be subject, or the amount of any such liability.

(5)A notice under this section shall not require information with respect to a payment which was made, or to a licence, approval or entry which ceased to subsist—

(a)before 6th April 1988; or

(b)in a year of assessment ending more than three years before the date of the giving of the notice.

(6)For the purposes of this section a payment is a payment out of public funds if it is provided directly or indirectly by the Crown, by any Government, public or local authority whether in the United Kingdom or elsewhere or by any Community institution.”

Production of accounts, books etc.U.K.

F87126 Production of documents relating to a person’s tax liability.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F88127 Production of computer records etc.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interest and penaltiesU.K.

F89128 Interest on overdue or overpaid PAYE.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

129 Two or more tax-geared penalties in respect of same tax.U.K.

(1)After section 97 of the Taxes Management Act 1970 there shall be inserted—

“97A Two or more tax-geared penalties in respect of same tax.

Where two or more penalties—

(a)are incurred by any person and fall to be determined by reference to any income tax or capital gains tax with which he is chargeable for a year of assessment; or

(b)are incurred by any company and fall to be determined by reference to any corporation tax with which it is chargeable for an accounting period,

each penalty after the first shall be so reduced that the aggregate amount of the penalties, so far as determined by reference to any particular part of the tax, does not exceed whichever is or, but for this section, would be the greater or greatest of them, so far as so determined.”

(2)Section 97A(a) of that Act has effect with respect to the year1988-89 or any subsequent year of assessment; and section 97A(b) has effect with respect to accounting periods ending after 31st March 1989.

Company migrationU.K.

130 Provisions for securing payment by company of outstanding tax.U.K.

(1)The requirements of subsections (2) and (3) below must be satisfied before a company ceases to be resident in the United Kingdom otherwise than in pursuance of a Treasury consent.

(2)The requirements of this subsection are satisfied if the company gives to the Board—

(a)notice of its intention to cease to be resident in the United Kingdom, specifying the time (“the relevant time”) when it intends so to cease;

(b)a statement of the amount which, in its opinion, is the amount of the tax which is or will be payable by it in respect of periods beginning before that time; and

(c)particulars of the arrangements which it proposes to make for securing the payment of that tax.

(3)The requirements of this subsection are satisfied if—

(a)arrangements are made by the company for securing the payment of the tax which is or will be payable by it in respect of periods beginning before the relevant time; and

(b)those arrangements as so made are approved by the Board for the purposes of this subsection.

(4)If any question arises as to the amount which should be regarded for the purposes of subsection (3) above as the amount of the tax which is or will be payable by the company in respect of periods beginning before the relevant time, that question shall be referred to [F90the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal] , whose decision shall be final [F91(notwithstanding the provisions of sections 11 and 13 of the Tribunals, Courts and Enforcement Act 2007)] .

(5)If any information furnished by the company for the purpose of securing the approval of the Board under subsection (3) above does not fully and accurately disclose all facts and considerations material for the decision of the Board under that subsection, any resulting approval of the Board shall be void.

(6)In this section “Treasury consent” means a consent under section 765 of the Taxes Act 1988 (restrictions on the migration etc. of companies) given for the purposes of subsection (1)(a) of that section.

(7)In this section and sections 131 and 132 below any reference to the tax payable by a company includes a reference to—

(a)any amount of tax which it is liable to pay under regulations made under section [F92684 of the Income Tax (Earnings and Pensions) Act 2003] (PAYE);

(b)any income tax which it is liable to pay in respect of payments [F93within section 946 of the Income Tax Act 2007 (collection of tax: deposit-takers, building societies and certain companies)] ;

(c)any amount representing income tax which it is liable to pay under—

F94(i). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F94(ii). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(iii)section [F95966 of the Income Tax Act 2007] (entertainers and sportsmen);

(d)any amount which it is liable to pay under [F96section 61 of the Finance Act 2004] (sub-contractors in the construction industry); and

(e)any amount which it is liable to pay under paragraph 4 of Schedule 15 to M39Finance Act 1973 (territorial extension of charge of tax).

(8)In this section and section 132 below any reference to the tax payable by a company in respect of periods beginning before any particular time includes a reference to any interest on the tax so payable, or on tax paid by it in respect of such periods, which it is liable to pay in respect of periods beginning before or after that time.

(9)In this section and sections 131 and 132 below any reference to a provision of the Taxes Act 1988 shall be construed, in relation to any time before 6th April 1988, as a reference to the corresponding enactment repealed by that Act.

[F97(9A)In this section any reference to a provision of the Income Tax (Earnings and Pensions) Act 2003 or the Income Tax Act 2007 shall be construed, in relation to any time at which a corresponding provision of the Taxes Act 1988 or an enactment repealed by that Act had effect, as a reference to that corresponding provision.]

(10)This section and sections 131 and 132 below shall be deemed to have come into force on 15th March 1988.

131 Penalties for failure to comply with section 130.U.K.

(1)If a company fails to comply with section 130 above at any time, it shall be liable to a penalty not exceeding the amount of tax which is or will be payable by it in respect of periods beginning before that time and which has not been paid at that time.

(2)If, in relation to a company (“the migrating company”), any person does or is party to the doing of any act which to his knowledge amounts to or results in, or forms part of a series of acts which together amount to or result in, or will amount to or result in, the migrating company failing to comply with section 130 above at any time and either—

(a)that person is a person to whom subsection (3) below applies; or

(b)the act in question is a direction or instruction given (otherwise than by way of advice given by a person acting in a professional capacity) to persons to whom that subsection applies,

that person shall be liable to a penalty not exceeding the amount of tax which is or will be payable by the migrating company in respect of periods beginning before that time and which has not been paid at that time.

(3)This subsection applies to the following persons, namely—

(a)any company which has control of the migrating company; and

(b)any person who is a director of the migrating company or of a company which has control of the migrating company.

(4)In any proceedings against any person to whom subsection (3) above applies for the recovery of a penalty under subsection (2) above—

(a)it shall be presumed that he was party to every act of the migrating company unless he proves that it was done without his consent or connivance; and

(b)it shall, unless the contrary is proved, be presumed that any act which in fact amounted to or resulted in, or formed part of a series of acts which together amounted to or resulted in, or would amount to or result in, the migrating company failing to comply with section 130 above was to his knowledge such an act.

(5)References in this section to a company failing to comply with section 130 above are references to the requirements of subsections (2) and (3) of that section not being satisfied before the company ceases to be resident in the United Kingdom otherwise than in pursuance of a Treasury consent; and in this subsection “Treasury consent” has the same meaning as in that section.

(6)In this section and section 132 below “director”, in relation to a company—

(a)has the meaning given by subsection (8) of section 168 of the Taxes Act 1988 (read with subsection (9) of that section); and

(b)includes any person falling within subsection (5) of section 417 of that Act (read with subsection (6) of that section);

and any reference to a person having control of a company shall be construed in accordance with section 416 of that Act.

132 Liability of other persons for unpaid tax.U.K.

(1)This section applies where—

(a)a company (“the migrating company”) ceases to be resident in the United Kingdom at any time; and

(b)any tax which is payable by the migrating company in respect of periods beginning before that time is not paid within six months from the time when it becomes payable.

(2)The Board may, at any time before the end of the period of three years beginning with the time when the amount of the tax is finally determined, serve on any person to whom subsection (3) below applies a notice—

(a)stating particulars of the tax payable, the amount remaining unpaid and the date when it became payable; and

(b)requiring that person to pay that amount within thirty days of the service of the notice.

(3)This subsection applies to the following persons, namely—

(a)any company which is, or within the relevant period was, a member of the same group as the migrating company; and

(b)any person who is, or within the relevant period was, a controlling director of the migrating company or of a company which has, or within that period had, control over the migrating company.

(4)Any amount which a person is required to pay by a notice under this section may be recovered from him as if it were tax due and duly demanded of him; and he may recover any such amount paid by him from the migrating company.

(5)A payment in pursuance of a notice under this section shall not be allowed as a deduction in computing any income, profits or losses for any tax purposes.

(6)In this section—

• “controlling director”, in relation to a company, means a director of the company who has control of it;

• “group” has the meaning which would be given by section [F98170 of the Taxation of Chargeable Gains Act 1992] if in that section F99. . . for references to 75 per cent. subsidiaries there were substituted references to 51 per cent. subsidiaries;

• “the relevant period” means—

  (a)

  where the time when the migrating company ceases to be resident in the United Kingdom is less than twelve months after 15th March 1988, the period beginning with that date and ending with that time;

  (b)

  in any other case, the period of twelve months ending with that time.

Appeals etc.U.K.

F100133 Jurisdiction of General Commissioners.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F100F101134 General Commissioners for Northern Ireland.U.K.

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F100135 Cases stated in Northern Ireland.U.K.

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Part IVU.K. Miscellaneous and General

Inheritance taxU.K.

136 Reduction of rates.U.K.

(1)For the Table in Schedule 1 to the M40Inheritance Tax Act 1984 there shall be substituted—

(2)Subsection (1) above shall apply to any chargeable transfer made on or after 15th March 1988, and section 8(1) of the M41Inheritance Tax Act 1984 (indexation of rate bands) shall not apply to chargeable transfers made in the year beginning 6th April 1988.

(3)Section 8(1A) of that Act shall cease to have effect.

137 Gifts to political parties.U.K.

(1)In section 24(1) of the Inheritance Tax Act 1984 (exemption from tax for gifts to political parties) paragraph (b) (which limits the exemption to £100,000 in respect of gifts on or within one year of the death of the transferor) shall cease to have effect.

(2)This section shall have effect in relation to transfers of value made on or after 15th March 1988.

Petroleum revenue taxU.K.

138 Reduced oil allowance for certain Southern Basin and onshore fields.U.K.

(1)For every relevant Southern Basin or onshore field, as defined in subsection (2) below, section 8 of the M42Oil Taxation Act 1975 (the oil allowance) shall have effect subject to the following modifications—

(a)in subsection (2) (the amount of the allowance for each chargeable period) for “250,000 metric tonnes” there shall be substituted “ 125,000 metric tonnes ”; and

(b)in subsection (6) (the total allowance for a field) for “5 million metric tonnes” there shall be substituted “ 25 million metric tonnes ”.

(2)Subject to subsection (3) below, for the purposes of this section a “relevant Southern Basin or onshore field” is any oil field other than one—

(a)which is a relevant new field for the purposes of section 36 of the M43Finance Act 1983 (increased oil allowance for certain new fields); or

(b)for any part of which consent for development was granted to the licensee by the Secretary of State before 1st April 1982; or

(c)for any part of which a programme of development was served on the licensee or approved by the Secretary of State before that date.

(3)In determining, in accordance with subsection (2) above, whether an oil field (in this subsection referred to as “the field in question”) is a relevant Southern Basin or onshore field, no account shall be taken of a consent for development granted before 1st April 1982 or a programme of development served on the licensee or approved by the Secretary of State before that date if—

(a)in whole or in part that consent or programme related to another oil field for which a determination under Schedule 1 to the M44Oil Taxation Act 1975 was made before the determination under that Schedule for the field in question; and

(b)on or after 1st April 1982, a consent for development is or was granted or a programme of development is or was served on the licensee or approved by the Secretary of State and that consent or programme relates, in whole or in part, to the field in question.

(4)Subsections (4) and (5) of section 36 of the Finance M45Act 1983 (which define “development” for the purposes of subsections (2) and (3) of that section) shall apply also for the purposes of subsections (2) and (3) of this section.

(5)This section shall have effect in relation to chargeable periods ending after 30th June 1988.

(6)This section shall be construed as one with Part I of the M46 Oil Taxation Act 1975.

139X2Assets generating tariff receipts: extension of allowable expenditure.U.K.

(1)In Part I of Schedule 1 to the M47Oil Taxation Act 1983 (extensions of allowable expenditure for assets generating receipts) paragraph 3 (expenditure on enhancing the value of assets no longer in use for the principal field) shall be amended as follows—

(a)in sub-paragraph (1)(a) after the words “enhancing the value of” there shall be inserted “ or otherwise in connection with ”;

(b)in sub-paragraph (1)(d) for the words “the expenditure” there shall be substituted “ either the use of the asset ” and after the words “tariff receipts or” there shall be inserted “ the expenditure ”.

(2)This section shall have effect with respect to expenditure incurred on or after 15th March 1988.

Stamp duty and stamp duty reserve taxU.K.

F102140. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F103141. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

142 Stamp duty: housing action trusts.U.K.

(1)In section 97 of the M48Finance Act 1980 (shared ownership transactions) after paragraph (c) of subsection (3) there shall be inserted—

“(cc)a housing action trust established under Part III of the Housing Act 1988;”

(2)In section 107 of the M49Finance Act 1981 (sales at a discount by local authorities etc.) after paragraph (f) of subsection (3) there shall be inserted—

“(ff)a housing action trust established under Part III of the Housing Act 1988;”

143Stamp duty: paired sharesU.K.

(1)This section applies where —

(a)the articles of association of a company incorporated in the United Kingdom (“the UK company”) and the equivalent instruments governing a company which is not so incorporated (“the foreign company”) each provide that no share in the company to which they relate may be transferred otherwise than as part of a unit comprising one share in that company and one share in the other; and

(b)such units are to be or have been offered for sale to the public in the United Kingdom and, at the same time, an equal number of such units are to be or, as the case may be, have been offered for sale to the public at a broadly equivalent price in the country in which the foreign company is incorporated (“the foreign country”).

[F104(2)In relation to an instrument to which this subsection applies, no duty is chargeable under paragraph 1 of Schedule 15 to the Finance Act 1999 (bearer instruments: charge on issue); but this does not affect the other requirements of that Schedule.]

(3)[F105Subsection (2) above applies] to any bearer instrument issued on or after 1st November 1987 which represents shares in the UK company, or a right to an allotment of or to subscribe for such shares, if the purpose of the issue is —

(a)to make such shares available for sale (as part of such units as are referred to in subsection (1) above) in pursuance of either of the offers referred to in subsection (1)(b) above or of any other offer for sale of such units to the public made at the same time and at a broadly equivalent price in a country other than the United Kingdom or the foreign country; or

(b)to give effect to an allotment of such shares (as part of such units) as fully or partly paid bonus shares.

[F106(4)In relation to an instrument to which this subsection applies—

(a)the foreign company shall be treated for the purposes of Schedule 15 to the Finance Act 1999 (stamp duty on bearer instruments) as a UK company, and

(b)paragraph 17 of that Schedule (exemption for non-sterling instruments) shall not apply.]

(5)[F107Subsection (4) above applies] to any bearer instrument issued on or after 9th December 1987 which represents shares in the foreign company, or a right to an allotment of or to subscribe for such shares, and is not issued for the purpose —

(a)of making shares in the foreign company available for sale (as part of such units as are referred to in subsection (1) above) in pursuance of either of the offers referred to in subsection (1)(b) above or of any other offer such as is mentioned in subsection (3)(a) above; or

(b)of giving effect to an allotment of such shares (as part of such units) as fully or partly paid bonus shares.

(6)In relation to any instrument which transfers such units as are referred to in subsection (1) above and is executed on or after the date of the passing of this Act, the foreign company shall be treated for the purposes of sections 67 and 68 (depositary receipts) and 70 and 71 (clearance services) of the Finance Act 1986[1986 c. 41.] as a company incorporated in the United Kingdom.

(7)Section 3 of the Stamp Act 1891[1891 c. 39.] (which requires every instrument written upon the same piece of material as another instrument to be separately stamped) shall not apply in relation to any bearer instrument issued on or after 9th December 1987 which represents shares in the UK company or the foreign company, or a right to an allotment of or to subscribe for such shares.

(8)This section shall be construed as one with the Stamp Act 1891.

(9)Subsections (2) and (3) above, together with subsection (1) above so far as relating to them, shall be deemed to have come into force on 1st November 1987, and subsections (4), (5) and (7) above, together with subsection (1) above so far as relating to them, shall be deemed to have come into force on 9th December 1987.

144Stamp duty reserve tax: paired shares etcU.K.

(1)Section 99 of the Finance Act 1986 (stamp duty reserve tax: interpretation) shall be amended as follows.

(2)For subsections (3) to (6) there shall be substituted —

“(3)Subject to the following provisions of this section, “chargeable securities” means —

(a)stocks, shares or loan capital,

(b)interests in, or in dividends or other rights arising out of, stocks, shares or loan capital,

(c)rights to allotments of or to subscribe for, or options to acquire, stocks, shares or loan capital, and

(d)units under a unit trust scheme.

(4)“Chargeable securities” does not include securities falling within paragraph (a), (b) or (c) of subsection (3) above which are issued or raised by a body corporate not incorporated in the United Kingdom unless —

(a)they are registered in a register kept in the United Kingdom by or on behalf of the body corporate by which they are issued or raised, or

(b)in the case of shares, they are paired with shares issued by a body corporate incorporated in the United Kingdom, or

(c)in the case of securities falling within paragraph (b) or (c) of subsection (3) above, paragraph (a) or (b) above applies to the stocks, shares or loan capital to which they relate.

(5)“Chargeable securities” does not include —

(a)securities the transfer of which is exempt from all stamp duties, or

(b)securities falling within paragraph (b) or (c) of subsection (3) above which relate to stocks, shares or loan capital the transfer of which is exempt from all stamp duties.

(6)“Chargeable securities” does not include interests in depositary receipts for stocks or shares.

(6A)For the purposes of subsection (4) above, shares issued by a body corporate which is not incorporated in the United Kingdom (“the foreign company”) are paired with shares issued by a body corporate which is so incorporated (“the UK company”) where —

(a)the articles of association of the UK company and the equivalent instruments governing the foreign company each provide that no share in the company to which they relate may be transferred otherwise than as part of a unit comprising one share in that company and one share in the other, and

(b)such units have been offered for sale to the public in the United Kingdom and, at the same time, an equal number of such units have been offered for sale to the public at a broadly equivalent price in the country in which the foreign company is incorporated.”

(3)F108. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)In subsection (10), for paragraph (a) there shall be substituted —

“(a)paragraph (a) of subsection (4) above and the reference to that paragraph in paragraph (c) of that subsection shall be ignored, and”.

(5)After subsection (10) there shall be added —

“(11)In interpreting “chargeable securities” in section 93 or 96 above in a case where —

(a)newly subscribed shares, or

(b)securities falling within paragraph (b) or (c) of subsection (3) above which relate to newly subscribed shares,

are issued in pursuance of an arrangement such as is mentioned in that section (or an arrangement which would be such an arrangement if the securities issued were chargeable securities), paragraph (b) of subsection (4) above and the reference to that paragraph in paragraph (c) of that subsection shall be ignored.

(12)In subsection (11) above, “newly subscribed shares” means shares issued wholly for new consideration in pursuance of an offer for sale to the public.”

(6)This section applies in relation to —

(a)agreements to transfer chargeable securities (within the meaning of section 99 of the Finance Act 1986[1986 c. 41.] as amended by this section) made on or after 9th December 1987; and

(b)the transfer, issue or appropriation of such securities, or the issue of securities such as are mentioned in subsection (11) of that section, on or after that date in pursuance of an arrangement such as is mentioned in that subsection (whenever the arrangement was made),

and shall be deemed to have come into force on that date.

MiscellaneousU.K.

145 Building societies: change of status.U.K.

Schedule 12 to this Act (which makes provision in connection with the transfer of a building society’s business to a company in accordance with the M50Building Societies Act 1986) shall have effect.

146 Post-consolidation amendments.U.K.

The enactments specified in Schedule 13 to this Act shall have effect subject to the amendments specified in that Schedule (being amendments to correct errors in the Taxes Act 1988 and in the amendments made by the M51Finance Act 1987 for the purposes of the consolidation effected by the Taxes Act 1988).

147 Interpretation etc.U.K.

(1)In this Act “the Taxes Act 1970” means the M52Income and Corporation Taxes Act 1970 and “the Taxes Act 1988” means the M53Income and Corporation Taxes Act 1988.

(2)Part II of this Act shall be construed as one with the M54Value Added Tax Act 1983.

(3)Part III of this Act, so far as it relates to income tax, shall be construed as one with the Income Tax Acts, so far as it relates to corporation tax, shall be construed as one with the Corporation Tax Acts and, so far as it relates to capital gains tax, shall be construed as one with the M55Capital Gains Tax Act 1979.

148 Repeals.U.K.

The enactments specified in Schedule 14 to this Act (which include unnecessary enactments) are hereby repealed to the extent specified in the third column of that Schedule, but subject to any provision at the end of any Part of that Schedule.

149 Short title.U.K.

This Act may be cited as the Finance Act 1988.

SCHEDULES

Section 1.

SCHEDULE 1U.K. Alcoholic Liquor Duties

Part IU.K. Table of Rates of Duty on Wine and Made-Wine

Part IIU.K. Beverages of an Alcoholic Strength not Exceeding 5.5 per cent.

1(1)In subsection (2) of section 1 of the M56Alcoholic Liquor Duties Act 1979 (definition of “spirits”), for the words “subsections (7) and (8)” there shall be substituted the words “subsections (7) to (9)”.U.K.

F109(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)In subsection (5) of that section (definition of “made-wine”), after the word “means” there shall be inserted the words “subject to subsection (10) below”.

(4)After subsection (8) of that section there shall be inserted—

“(9)Any beverage of an alcoholic strength exceeding 1.2 per cent. but not exceeding 5.5 per cent. which is made with spirits and is not of a description specified in an order made by the Treasury by statutory instrument shall be deemed not to be spirits.

(10)The Treasury may by order made by statutory instrument provide that any beverage of an alcoholic strength exceeding 1.2 per cent. but not exceeding 5.5 per cent. which is made with beer or cider and is of a description specified in the order shall be deemed to be beer or, as the case may be, cider, and not to be made-wine.”

F1102U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1113U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4U.K.After subsection (4) of section 54 of that Act (wine: charge of excise duty) there shall be inserted—

“(4A)A person who, on any premises, produces wine to which section 55A below applies by rendering it sparkling, need not on that account hold an excise licence under subsection (2) above in respect of those premises.”

5(1)After subsection (4) of section 55 of that Act (made-wine: charge of excise duty), there shall be inserted—U.K.

“(4A)A person who, on any premises, produces made-wine to which section 55A below applies by rendering it sparkling, need not on that account hold an excise licence under subsection (2) above in respect of those premises.”

(2)In subsection (5) of that section, for the words “render any made-wine sparkling” there shall be substituted the words “render sparkling any made-wine other than made-wine to which section 55A below applies”.

F1126U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7U.K.In section 59 of that Act (rendering imported wine or made-wine sparkling in warehouse), for subsection (1) there shall be substituted—

“(1)Wine or made-wine which—

(a)is imported or is removed to the United Kingdom from the Isle of Man; and

(b)is not wine or made-wine of a strength exceeding 1.2 per cent. but not exceeding 5.5 per cent.,

shall not be rendered sparkling, whether by aeration, fermentation or any other process, except in warehouse in accordance with warehousing regulations.”

F1138U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9U.K.Section 63 of that Act (repayment of duty on imported cider used in the production of other beverages etc.) shall be renumbered as subsection (1) of that section F114. . . .

F11510U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F11611U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12U.K.At the end of subsection (1) of section 73 of that Act (penalty for misdescribing substances as beer), there shall be added the words “or that the substance is made with beer and is a made-wine to which section 55A above applies”.

13U.K.In Schedule 1 to that Act, for the Table of rates of duty there shall be substituted—

Section 4.

SCHEDULE 2U.K. Vehicles Excise Duty

F117Part IU.K.

Part IIU.K. Vehicles Carrying or Drawing Exceptional Loads

F1181U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1192U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3F120U.K.

F1214U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1225U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1236U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 35.

SCHEDULE 3U.K. Married Couples: Minor and Consequential Provisions

Part IU.K. Amendments of the Taxes Act 1988

IntroductoryU.K.

1U.K.The Taxes Act 1988 shall have effect subject to the following amendments.

Commencement of trade etc.U.K.

F1242U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Discontinuance of trade etc.U.K.

F1253U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

UnderpaymentsU.K.

F1264U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Additional relief in respect of childrenU.K.

F1275U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1286U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Widow’s bereavement allowanceU.K.

7(1)The section set out in sub-paragraph (2) below shall have effect in substitution for section 262 (widow’s bereavement allowance) in relation to deaths occurring during the year 1989-90, and the section set out in sub-paragraph (3) below shall have effect in substitution for that section in relation to deaths occurring during the year 1990-91 or any subsequent year of assessment.U.K.

(2)The section first referred to in sub-paragraph (1) above is—

“262 Widow’s bereavement allowance.

Where a man dies in the year 1989-90 and for that year he is entitled to the higher (married person’s) relief under section 257(1), or would be so entitled but for an election under section 261 or 287, his widow shall be entitled—

(a)for that year of assessment, to a deduction from her total income of an amount equal to the amount referred to in section 259(2), and

(b)(unless she marries again before the beginning of it) for the year 1990-91, to a deduction from her total income of an amount equal to the amount specified in section 257A(1) for that year.”

F129(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Blind person’s allowanceU.K.

8U.K.For the year 1990-91 and subsequent years of assessment the following section shall be substituted for section 265—

“265 Blind person’s allowance.

(1)If the claimant proves that he is a registered blind person for the whole or any part of the year of assessment, he shall be entitled to a deduction of £540 from his total income.

(2)Where—

(a)a person entitled to relief under subsection (1) above is a married man whose wife is living with him for the whole or any part of the year of assessment, but

(b)the amount which he is entitled to deduct from his total income by virtue of that subsection exceeds what is left of his total income after all other deductions have been made from it,

his wife shall be entitled to a deduction from her total income of an amount equal to the excess.

(3)In determining for the purposes of subsection (2)(b) above the amount that is left of a person’s total income for a year of assessment after other deductions have been made from it, there shall be disregarded any deduction made—

(a)on account of any payments of relevant loan interest which become due in that year and to which section 369 applies, or

(b)under section 257A or section 289.

(4)Subsections (2) and (3) above shall have effect where a wife is entitled to relief under subsection (1) above as they have effect where the husband is entitled to that relief, but with the appropriate modifications (and in particular the omission from subsection (3) of the reference to section 257A).

(5)Subsections (2) to (4) above shall not apply for a year of assessment unless the person entitled to relief under subsection (1) has given to the inspector written notice that they are to apply; and any such notice—

(a)shall be given not later than six years after the end of the year of assessment to which it relates,

(b)shall be in such form as the Board may determine, and

(c)shall be irrevocable.

(6)A notice given under subsection (5) above in relation to a year of assesment by a husband shall have effect also as a notice under section 257B(3).

(7)In this section “registered blind person” means a person registered as a blind person in a register compiled under section 29 of the National Assistance Act 1948 or, in the case of a person ordinarily resident in Scotland or Northern Ireland, a person who is a blind person within the meaning of section 64(1) of that Act.”

Life assurance premiumsU.K.

9U.K.For the year 1990-91 and subsequent years of assessment section 266 (life assurance premiums) shall have effect with the substitution—

(a)in subsection (9), of the word “spouse” for the words “wife (but not the husband)”, and

(b)in subsection (11)(a), of the words “spouse, widow, widower or children or other dependants of any such employee or person,” for the word “wife” onwards.

Payments securing annuitiesU.K.

10U.K.For the year 1990-91 and subsequent years of assessment the following section shall be substituted for section 273 (payments securing annuities)—

“273 Payments securing annuities.

Subject to sections 274, 617(3) and 619(6), if the claimant is, under any Act of Parliament or under any terms and conditions of employment, liable to the payment of any sum, or to the deduction from any salary or stipend of any sum, for the purpose of securing a deferred annuity to a widow or widower of the claimant or provision for the claimant’s children after the claimant dies, the claimant shall be entitled to a deduction from the amount of income tax on which he or she is chargeable equal to income tax at the basic rate on the amount of the sum which he or she has paid or which has been deducted from his or her salary or stipend.”

Married couples living togetherU.K.

F13011U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Business expansion schemeU.K.

12(1)For the year 1990-91 and subsequent years of assessment section 304 (business expansion scheme: husband and wife) shall have effect—U.K.

(a)with the omission of subsections (1) to (4), and

(b)with the substitution of the following subsections for subsections (5) and (6)—

“(5)Subsection (1) of section 299 shall not apply to a disposal made by a married man to his wife or a married woman to her husband at a time when they are living together; but where shares issued to one of them have been transferred to the other by a transaction inter vivos that subsection shall apply on the disposal of the shares by the transferee to a third person and any assessment for withdrawing relief in respect of the shares shall be made on the transferee.

(6)If any relief given for the year 1989-90 or any earlier year of assessment in respect of shares for which a married man or married woman has subscribed and which were issued while they were living together falls to be withdrawn in the year 1990-91 or any subsequent year of assessment by virtue of a disposal of those shares by the person who subscribed for them, any assessment for withdrawing that relief shall be made on the person making the disposal and shall be made by reference to the reduction of tax flowing from the amount of the relief regardless of any allocation of that relief under section 280 or of any allocation of the reduction under section 284 for the year of assessment for which the relief was given.”