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

Chapter IU.K. General

Income tax rates and allowancesU.K.

F117 Rates and main allowances.U.K.

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F218 Relief for blind persons.U.K.

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Corporation tax ratesU.K.

19 Charge and rate of corporation tax for 1990.U.K.

Corporation tax shall be charged for the financial year 1990 at the rate of 35 per cent.

20 Small companies.U.K.

(1)For the financial year 1990—

(a)the small companies’ rate shall be 25 per cent., and

(b)the fraction mentioned in section 13(2) of the Taxes Act 1988 (marginal relief for small companies) shall be one-fortieth.

(2)In section 13(3) of that Act (limits of marginal relief), in paragraphs (a) and (b)—

(a)for “£150,000” there shall be substituted “ £200,000 ”, and

(b)for “£750,000” there shall be substituted “ £1,000,000 ”.

(3)Subsection (2) above shall have effect for the financial year 1990 and subsequent financial years; and where by virtue of that subsection section 13 of the Taxes Act 1988 has effect with different relevant maximum amounts in relation to different parts of a company’s accounting period, then for the purposes of that section those parts shall be treated as if they were separate accounting periods and the profits and basic profits of the company for that period shall be apportioned between those parts.

Benefits in kindU.K.

F321 Care for children.U.K.

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22 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

Mileage allowancesU.K.

F423. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

CharitiesU.K.

F524. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

25 Donations to charity by individuals.U.K.

F6(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6(3A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6(5A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6(5B). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6(5C). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6(5D). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6(5E). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6(5F). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6(5G). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6(5H). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6(5I). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6(5J). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6(9A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(10)The receipt by a [F7charitable company] of a gift which is a qualifying donation [F8for the purposes of Chapter 2 of Part 8 of the Income Tax Act 2007 (gift aid)] shall be treated for the purposes of the [F9Corporation Tax Acts], in their application to the [F7charitable company], as the receipt, under deduction of income tax at the basic rate for the relevant year of assessment, of an annual payment of an amount equal to the grossed up amount of the gift.

[F10(10A)Schedule 19 to the Finance Act 2008 contains provision for transitional payments to charitable companies in respect of gifts made in the tax years 2008-09 to 2010-11.]

F11(11). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(12)For the purposes of this section—

(a)“[F12charitable company]” has the same meaning as in section 506 of the Taxes Act 1988 and includes each of the bodies mentioned in section 507 of that Act;

F13(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)“relevant year of assessment”, in relation to a gift, means the year of assessment in which the gift is made;

(d)references, in relation to a gift, to the grossed up amount are to the amount which after deducting income tax at the basic rate for the relevant year of assessment leaves the amount of the gift; F13. . .

F13(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F14(13). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26 Company donations to charity.U.K.

(1)Section 339 of the Taxes Act 1988 (charges on income: donations to charity) shall be amended as follows.

(2)In subsection (1) after the word “payment” there shall be inserted the words “ of a sum of money ”.

(3)In subsection (2) the words “and is not a close company” shall be omitted.

(4)The following subsections shall be inserted after subsection (3)—

“(3A)A payment made by a close company is not a qualifying donation if it is of a sum which leaves less than £600 after deducting income tax under subsection (3) above.

(3B)A payment made by a close company is not a qualifying donation if—

(a)it is made subject to a condition as to repayment, or

(b)the company or a connected person receives a benefit in consequence of making it and either the relevant value in relation to the payment exceeds two and a half per cent. of the amount given after deducting tax under section 339(3) or the amount to be taken into account for the purposes of this paragraph in relation to the payment exceeds £250.

(3C)For the purposes of subsections (3B) above and (3D) below, the relevant value in relation to a payment to a charity is—

(a)where there is one benefit received in consequence of making it which is received by the company or a connected person, the value of that benefit;

(b)where there is more than one benefit received in consequence of making it which is received by the company or a connected person, the aggregate value of all the benefits received in consequence of making it which are received by the company or a connected person.

(3D)The amount to be taken into account for the purposes of subsection (3B)(b) above in relation to a payment to a charity is an amount equal to the aggregate of—

(a)the relevant value in relation to the payment, and

(b)the relevant value in relation to each payment already made to the charity by the company in the accounting period in which the payment is made which is a qualifying donation within the meaning of this section.

(3E)A payment made by a close company is not a qualifying donation if it is conditional on, or associated with, or part of an arrangement involving, the acquisition of property by the charity, otherwise than by way of gift, from the company or a connected person.

(3F)A payment made by a company is not a qualifying donation unless the company gives to the charity to which the payment is made a certificate in such form as the Board may prescribe and containing—

(a)in the case of any company, a statement to the effect that the payment is one out of which the company has deducted tax under subsection (3) above, and

(b)in the case of a close company, a statement to the effect that the payment satisfies the requirements of subsections (3A) to (3E) above.

(3G)A payment made by a company is not a qualifying donation if the company is itself a charity.”

(5)The following subsection shall be inserted after subsection (7)—

“(7A)In subsections (3B) to (3E) above references to a connected person are to a person connected with—

(a)the company, or

(b)a person connected with the company;

and section 839 applies for the purposes of this subsection.”

(6)This section applies in relation to payments made on or after 1st October 1990.

27 Maximum qualifying company donations.U.K.

F15(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)In section 339 of that Act (charges on income: donations to charity) subsection (5) shall be omitted and in subsection (9) for “(5)” there shall be substituted “ (4) ”.

F15(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)This section applies in relation to accounting periods ending on or after 1st October 1990.

SavingsU.K.

28 Tax-exempt special savings accounts.U.K.

F16(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F16(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F17F16(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1829 Extension of SAYE.U.K.

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30 Building societies.U.K.

Schedule 5 to this Act (which contains provisions relating to building societies, deposit-takers and investors) shall have effect.

Employee share ownership trustsU.K.

F1931. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F2032. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F2133. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F2234. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F2335. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F2436. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F2537. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F2638. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F2739. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F2840. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Insurance companies and friendly societiesU.K.

41 Apportionment of income etc.U.K.

Schedule 6 to this Act (which makes provision about the apportionment of income etc. and related provision) shall have effect.

42 Overseas life assurance business.U.K.

Schedule 7 to this Act (which makes provision about the taxation of overseas life assurance business) shall have effect.

F2943 Deduction for policy holders’ tax.U.K.

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F3044 Reinsurance commissions.U.K.

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45 Policy holders’ share of profits etc.U.K.

(1)In section 88 of the Finance Act 1989 (corporation tax: policy holders’ fraction of profits), in subsection (1) for the words “the policy holders’ fraction of its relevant profits for any accounting period shall” there shall be substituted the words—

“(a)the policy holders’ share of the relevant profits for any accounting period, or

(b)where the business is mutual business, the whole of those profits

shall ”.

(2)In subsection (4) of that section, for the word “fraction” there shall be substituted the word “ share ”, and after the words “that period” there shall be inserted the words “ , or where the business is mutual business the whole of those profits, ”.

(3)For section 89 of that Act (which defines the shareholders’ and policy holders’ fractions) there shall be substituted—

“89 Policy holders’ share of profits.

(1)The references in section 88 above to the policy holders’ share of the relevant profits for an accounting period of a company carrying on life assurance business are references to the amount arrived at by deducting from those profits the Case I profits of the company for the period in respect of the business, reduced in accordance with subsection (2) below.

(2)For the purposes of subsection (1) above, the Case I profits for a period shall be reduced by—

(a)the amount, so far as unrelieved, of any franked investment income arising in the period as respects which the company has made an election under section 438(6) of the Taxes Act 1988, and

(b)the shareholders’ share of any other unrelieved franked investment income arising in the period from investments held in connection with the business.

(3)For the purposes of this section “the shareholders’ share” in relation to any income is so much of the income as is represented by the fraction

(4)Where there is no such excess as is mentioned in subsection (3) above, or where the Case I profits are greater than any excess, the whole of the income shall be the shareholders’ share; and (subject to that) where there are no Case I profits, none of the income shall be the shareholders’ share.

(5)In subsection (3) above the references to the relevant non-premium income, relevant gains, relevant expenses and relevant interest of a company for an accounting period are references respectively to the following items as brought into account for the period, so far as referable to the company’s life assurance business,—

(a)the company’s investment income from the assets of its long-term business fund together with its other income, apart from premiums;

(b)any increase in the value (whether realised or not) of those assets;

(c)expenses payable by the company;

(d)interest payable by the company;

and if for any period there is a reduction in the value referred to in paragraph (b) above (as brought into account for the period), that reduction shall be taken into account as an expense of the period.

(6)Except in so far as regulations made by the Treasury otherwise provide, in this section “brought into account” means brought into account in the revenue account prepared for the purposes of the Insurance Companies Act 1982; and where the company’s period of account does not coincide with the accounting period, any reference to an amount brought into account for the accounting period is a reference to the corresponding amount brought into account for the period of account in which the accounting period is comprised, proportionately reduced to reflect the length of the accounting period as compared with the length of the period of account.

(7)In this section “Case I profits” means profits computed in accordance with the provisions of the Taxes Act 1988 applicable to Case I of Schedule D.

(8)For the purposes of this section franked investment income is “unrelieved” if—

(a)it has not been excluded from charge to tax by virtue of any provision,

(b)no tax credit comprised in it has been paid, and

(c)no relief has been allowed against it by deduction or set-off.”

(4)In subsection (3) of section 434 of the Taxes Act 1988 (franked investment income etc.)—

(a)for the words “policy holders’ fraction” in both places where they occur there shall be substituted the words “ policy holders’ share ”;

(b)in paragraph (a), after the word “income” there shall be inserted the words “ from investments held in connection with the company’s life assurance business ”;

(c)in paragraph (b), for the words “only to the shareholders’ fraction of that income” there shall be substituted the words “ to that income excluding the amount within paragraph (a) above ”.

F31(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F32(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7)After subsection (6) of that section there shall be inserted—

“(6A)For the purposes of this section—

(a)“the policy holders’ share” of any franked investment income is so much of that income as is not the shareholders’ share within the meaning of section 89 of the Finance Act 1989, and

(b)“the policy holders’ share of the relevant profits” has the same meaning as in section 88 of that Act.”

F33(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F34(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(10)The M1Finance Act 1989 shall be deemed always to have had effect with the amendments made by subsections (1) to (3) above, and the amendments made by subsections (4) to (9) above shall have the same effect as, by virtue of section 84(5)(b) of that Act, they would have had if they had been made by Schedule 8 to that Act.

(11)Paragraphs 1 and 3(3) of Schedule 8 to the Finance Act 1989 shall be deemed never to have had effect.

F3546. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F3647. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

48 Transfers of long term business.U.K.

Schedule 9 to this Act (which makes provision about the tax consequences of certain transfers of long term business by insurance companies) shall have effect.

49 Friendly societies: increased tax exemption.U.K.

(1)In subsection (2) of section 460 of the Taxes Act 1988 (exemption from tax for profits of friendly society arising from life or endowment business), in paragraph (c)—

(a)in sub-paragraph (i), for “£100” there shall be substituted “ £150 ”; and

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

“(ia)where the profits relate to contracts made after 31st August 1987 but before 1st September 1990, of the assurance of gross sums under contracts under which the total premiums payable in any period of 12 months exceed £100;”.

(2)In subsection (3) of that section, for the words “of subsection (2)(c)(i)” there shall be substituted the words “ of subsection (2)(c)(i) or (ia) ”.

(3)In subsection (3) of section 464 of that Act (maximum benefits payable to members of friendly societies), for the words from “Kingdom)” to the end there shall be substituted the words “Kingdom)—

(a)contracts under which the total premiums payable in any period of 12 months exceed £150; or

(b)contracts made before 1st September 1990 under which the total premiums payable in any period of 12 months exceed £100,

unless all those contracts were made before 1st September 1987. ”

(4)In subsection (4) of that section, for the word “limit” there shall be substituted the word “ limits ”.

(5)In paragraph 3(8)(b)(ii) of Schedule 15 to that Act (amount of premiums to be disregarded in determining whether a policy meets conditions for it to be a qualifying policy), after the word “premiums” there shall be inserted the words “ or, where those premiums are payable otherwise than annually, an amount equal to 10 per cent. of those premiums if that is greater ”.

50 Friendly societies: application of enactments.U.K.

(1)Section 463 of the Taxes Act 1988 (application to life or endowment business of friendly societies of Corporation Tax Acts as they apply to mutual life assurance business) shall be renumbered as subsection (1) of that section.

(2)After that provision as so renumbered there shall be added—

“(2)The provisions of the Corporation Tax Acts which apply on the transfer of the whole or part of the long term business of an insurance company to another company shall apply in the same way—

(a)on the transfer of the whole or part of the business of a friendly society to another friendly society (and on the amalgamation of friendly societies), and

(b)on the transfer of the whole or part of the business of a friendly society to a company which is not a friendly society (and on the conversion of a friendly society into such a company),

so however that the Treasury may by regulations provide that those provisions as so applied shall have effect subject to such modifications and exceptions as may be prescribed by the regulations.

(3)The Treasury may by regulations provide that the provisions of the Corporation Tax Acts which apply on the transfer of the whole or part of the long term business of an insurance company to another company shall have effect where the transferee is a friendly society subject to such modifications and exceptions as may be prescribed by the regulations.

(4)Regulations under this section may make different provision for different cases and may include provision having retrospective effect.”

Unit and investment trusts etc.U.K.

F3751. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

52 Unit trusts: repeals.U.K.

(1)The Taxes Act 1988 shall have effect subject to the following provisions of this section.

(2)In section 468 (authorised unit trusts) subsection (5) shall not apply as regards a distribution period beginning after 31st December 1990.

(3)Where a particular distribution period is by virtue of subsection (2) above the last distribution period as regards which section 468(5) applies in the case of a trust, the trustees’ liability to income tax in respect of any source of income chargeable under Case III of Schedule D shall be assessed as if they had ceased to possess the source of income on the last day of that distribution period.

(4)But where section 67 of the Taxes Act 1988 applies by virtue of subsection (3) above, it shall apply with the omission from subsection (1)(b) of the words from “and shall” to “this provision”.

(5)Section 468B (certified unit trusts: corporation tax) shall not apply as regards an accounting period ending after 31st December 1990.

(6)Section 468C (certified unit trusts: distributions) shall not apply as regards a distribution period ending after 31st December 1990.

(7)Section 468D (funds of funds: distributions) shall not apply as regards a distribution period ending after 31st December 1990.

(8)In this section “distribution period” has the same meaning as in section 468 of the Taxes Act 1988.

F3853 Unit trust managers: exemption from bond-washing provisions.U.K.

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F3954. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

55 Investment trusts.U.K.

(1)In section 842 of the Taxes Act 1988 (investment trusts) the following subsections shall be inserted after subsection (2)—

“(2A)Subsection (1)(e) above shall not apply as regards an accounting period if—

(a)the company is required to retain income in respect of the period by virtue of a restriction imposed by law, and

(b)the amount of income the company is so required to retain in respect of the period exceeds an amount equal to 15 per cent. of the income the company derives from shares and securities.

(2B)Subsection (2A) above shall not apply where—

(a)the amount of income the company retains in respect of the accounting period exceeds the amount of income it is required by virtue of a restriction imposed by law to retain in respect of the period, and

(b)the amount of the excess or, where the company distributes income in respect of the period, that amount together with the amount of income which the company so distributes is at least £10,000 or, where the period is less than 12 months, a proportionately reduced amount.

(2C)Paragraph (e) of subsection (1) above shall not apply as regards an accounting period if the amount which the company would be required to distribute in order to fall within that paragraph is less than £10,000 or, where the period is less than 12 months, a proportionately reduced amount.”

(2)This section applies in relation to accounting periods ending on or after the day on which this Act is passed.

SecuritiesU.K.

F4056. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

[F4157 Deep gain securities.U.K.

(1)In Schedule 11 to the M2Finance Act 1989 (deep gain securities) paragraph 1 (meaning of deep gain security) shall be amended as follows.

(2)The following sub-paragraph shall be inserted after sub-paragraph (3)—

“(3A)In the case of a security issued on or after 9th June 1989, for the purposes of sub-paragraph (2) above “redemption” does not include any redemption which may be made before maturity only if—

(a)the person who issued the security fails to comply with the duties imposed on him by the terms of issue,

(b)the person who issued the security becomes unable to pay his debts, or

(c)the security was issued by a company and a person gains control of the company in pursuance of the acceptance of an offer made by that person to acquire shares in the company.”

(3)The amendment made by this section shall be deemed always to have had effect.]

F4258. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F4359. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Oil industryU.K.

F4460. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F4561. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

62 CT treatment of PRT repayment.U.K.

(1)In section 500 of the Taxes Act 1988 (deduction of PRT in computing income for corporation tax purposes), in subsection (4) (reduction or extinguishment of deduction where PRT repaid)—

(a)at the beginning there shall be inserted the words “ Subject to the following provisions of this section ”; and

(b)for the words “accounting period” there shall be substituted “ calendar year ”.

(2)For subsection (5) of that section there shall be substituted the following subsections—

“(5)If, in a case where paragraph 17 of Schedule 2 to the 1975 Act applies, an amount of petroleum revenue tax in respect of which a deduction has been made under subsection (1) above is repaid by virtue of an assessment under that Schedule or an amendment of such an assessment, then, so far as concerns so much of that repayment as constitutes the appropriate repayment,—

(a)subsection (4) above shall not apply; and

(b)the following provisions of this section shall apply in relation to the company which is entitled to the repayment.

(6)In subsection (5) above and the following provisions of this section—

(a)“the appropriate repayment” has the meaning assigned by sub-paragraph (2) of paragraph 17 of Schedule 2 to the 1975 Act;

(b)in relation to the appropriate repayment, a “carried back loss” means an allowable loss which falls within sub-paragraph (1)(a) of that paragraph and which (alone or together with one or more other carried back losses) gives rise to the appropriate repayment;

(c)in relation to a carried back loss, “the operative chargeable period” means the chargeable period in which the loss accrued; and

(d)in relation to the company which is entitled to the appropriate repayment, “the relevant accounting period” means the accounting period in or at the end of which ends the operative chargeable period or, if the company’s ring fence trade is permanently discontinued before the end of the operative chargeable period, the last accounting period of that trade.

(7)In computing for corporation tax the amount of the company’s income arising in the relevant accounting period from oil extraction activities or oil rights there shall be added an amount equal to the appropriate repayment; but this subsection has effect subject to subsection (8) below in any case where—

(a)two or more carried back losses give rise to the appropriate repayment; and

(b)the operative chargeable period in relation to each of the carried back losses is not the same; and

(c)if subsection (6)(d) above were applied separately in relation to each of the carried back losses there would be more than one relevant accounting period.

(8)Where paragraphs (a) to (c) of subsection (7) above apply, the appropriate repayment shall be treated as apportioned between each of the relevant accounting periods referred to in paragraph (c) of that subsection in such manner as to secure that the amount added by virtue of that subsection in relation to each of those relevant accounting periods is what it would have been if—

(a)relief for each of the carried back losses for which there is a different operative chargeable period had been given by a separate assessment or amendment of an assessment under Schedule 2 to the 1975 Act; and

(b)relief for a carried back loss accruing in an earlier chargeable period had been so given before relief for a carried back loss accruing in a later chargeable period.

(9)Any additional assessment to corporation tax required in order to give effect to the addition of an amount by virtue of subsection (7) above may be made at any time not later than six years after the end of the calendar year in which is made the repayment of petroleum revenue tax comprising the appropriate repayment.

(10)In this section “allowable loss” and “chargeable period” have the same meaning as in Part I of the 1975 Act and “calendar year” means a period of twelve months beginning on 1st January.”

(3)At the end of section 502(1) of the Taxes Act 1988 (defined expressions for Chapter V of Part XII) there shall be added “and

“ring fence trade” means activities which—

(a)fall within any of paragraphs (a) to (c) of subsection (1) of section 492; and

(b)constitute a separate trade (whether by virtue of that subsection or otherwise)”.

F4663. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F4764. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

InternationalU.K.

F4865. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F4966. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

67 Dual resident companies: controlled foreign companies.U.K.

F50(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

(3)In Schedule 25 to that Act—

(a)paragraphs 2(1)(c) and 4(1)(c) shall be omitted,

(b)after paragraph 2(1) there shall be inserted—

“(1A)A payment of dividend to a company shall not fall within sub-paragraph (1)(d) above unless it is taken into account in computing the company’s income for corporation tax.”, and

(c)after paragraph 4(1) there shall be inserted—

“(1A)A payment to a company shall not be a subsequent dividend within the meaning of sub-paragraph (1)(b) above unless it is taken into account in computing the company’s income for corporation tax.”

(4)Subsections (1) and (2) above shall apply on and after 20th March 1990 and subsection (3) above shall apply to dividends paid on or after that date.

68 Movements of capital between residents of member States.U.K.

(1)In section 765 of the Taxes Act 1988 (certain transactions unlawful unless carried out with Treasury consent), in subsection (1), after the words “Subject to the provisions of this section” there shall be inserted the words “ and section 765A ”.

(2)After that section there shall be inserted—

“765A Movements of capital between residents of member States.

(1)765(1) shall not apply to a transaction which is a movement of capital to which Article 1 of the Directive of the Council of the European Communities dated 24th June 1988 No. 88/361/EEC applies.

(2)Where if that Article did not apply to it a transaction would be unlawful under section 765(1), the body corporate in question (that is to say, the body corporate resident in the United Kingdom) shall—

(a)give to the Board within six months of the carrying out of the transaction such information relating to the transaction, or to persons connected with the transaction, as regulations made by the Board may require, and

(b)where notice is given to the body corporate by the Board, give to the Board within such period as is prescribed by regulations made by the Board (or such longer period as the Board may in the case allow) such further particulars relating to the transaction, to related transactions, or to persons connected with the transaction or related transactions, as the Board may require.”

(3)In section 98 of the M3Taxes Management Act 1970 (penalties for failure to furnish information and for false information)—

(a)in subsection (1), after the words “Subject to” there shall be inserted the words “ the provisions of this section and ”;

(b)after subsection (4) there shall be inserted—

“(5)In the case of a failure to comply with section 765A(2)(a) or (b) of the principal Act, subsection (1) above shall have effect as if for “£300” there were substituted “ £3,000 ” and as if for “£60” there were substituted “ £600 ”.”;

(c)in the first column of the Table, after “section 755” there shall be inserted “ section 765A(2)(b); ”; and

(d)in the second column of the Table, after “section 639” there shall be inserted “ section 765A(2)(a); ”.

(4)This section shall apply to transactions carried out on or after 1st July 1990.

69 European Economic Interest Groupings.U.K.

Schedule 11 to this Act (which makes provision about the taxation of income and gains in the case of European Economic Interest Groupings) shall have effect.

F5170. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

MiscellaneousU.K.

71 Relief for interest.U.K.

For the year 1990-91 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.

F5272. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F5373. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F5474. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F5575. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F5676 Training and enterprise councils and local enterprise companies.U.K.

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

F5777 Expenses of entertainers.U.K.

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

F5878 Waste disposal.U.K.

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

F5979 Priority share allocations for employees etc.U.K.

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

80 Broadcasting: transfer of undertakings of Independent Broadcasting Authority and Cable Authority.U.K.

Schedule 12 to this Act shall have effect.

81 Futures and options: exemptions.U.K.

(1)F60. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)The following section shall be inserted at the end of Part XIV of the Taxes Act 1988 (pension schemes etc.)—

“659A Futures and options.

(1)For the purposes of sections 592(2), 608(2)(a), 613(4), 614(3) and (4), 620(6) and 643(2)—

(a)“investments” (or “investment”)

includes futures contracts and options contracts, and

(b)income derived from transactions relating to such contracts shall be regarded as income derived from (or income from) such contracts,

and paragraph 7(3)(a) of Schedule 22 to this Act shall be construed accordingly.

(2)For the purposes of subsection (1) above a contract is not prevented from being a futures contract or an options contract by the fact that any party is or may be entitled to receive or liable to make, or entitled to receive and liable to make, only a payment of a sum (as opposed to a transfer of assets other than money) in full settlement of all obligations.”

F61(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)Section 659 of the Taxes Act 1988 (financial futures and traded options) shall cease to have effect.

(5)Subsections (1) and (2) above apply in relation to income derived after the day on which this Act is passed.

F61(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7)Insofar as section 659 of the Taxes Act 1988 relates to provisions of that Act, subsection (4) above applies in relation to income derived after the day on which this Act is passed.

(8)Insofar as section 659 of the Taxes Act 1988 relates to section 149B of the M4Capital Gains Tax Act 1979, subsection (4) above applies in relation to disposals made after the day on which this Act is passed.

F6282. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F6383. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F6484. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F6585. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F6686. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F6787. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

88 Capital allowances: miscellaneous amendments.U.K.

Schedule 13 to this Act shall have effect.

89 Correction of errors in Taxes Act 1988.U.K.

Schedule 14 to this Act shall have effect.

Chapter IIU.K. Management

Returns and informationU.K.

90 Income tax returns.U.K.

(1)The following sections shall be substituted for sections 8 and 9 of the M5Taxes Management Act 1970 (return of income)—

“8 Personal return.

(1)For the purposes of assessing a person to income tax, he may be required by a notice given to him by an inspector—

(a)to make and deliver to the inspector within the time limited by the notice a return containing such information as may be required in pursuance of the notice, and

(b)to deliver with the return such accounts and statements, relating to information contained in the return, as may be required in pursuance of the notice.

(2)Every return under this section shall include a declaration by the person making the return to the effect that the return is to the best of his knowledge correct and complete.

(3)A notice under this section may require different information, accounts and statements for different periods or in relation to different descriptions of source of income.

(4)Notices under this section may require different information, accounts and statements in relation to different descriptions of person.

8A Trustee’s return.

(1)For the purpose of assessing a trustee of a settlement, and the settlors and beneficiaries, to income tax an inspector may by a notice given to the trustee require the trustee—

(a)to make and deliver to the inspector within the time limited by the notice a return containing such information as may be required in pursuance of the notice, and

(b)to deliver with the return such accounts and statements, relating to information contained in the return, as may be required in pursuance of the notice;

and a notice may be given to any one trustee or separate notices may be given to each trustee or to such trustees as the inspector thinks fit.

(2)Every return under this section shall include a declaration by the person making the return to the effect that the return is to the best of his knowledge correct and complete.

(3)A notice under this section may require different information, accounts and statements for different periods or in relation to different descriptions of source of income.

(4)Notices under this section may require different information, accounts and statements in relation to different descriptions of settlement.

9 Partnership return.

(1)Where a trade or profession is carried on by two or more persons jointly, for the purposes of making an assessment to income tax in the partnership name an inspector may act under subsection (2) or (3) below (or both).

(2)An inspector may by a notice given to the partners require such person as is identified in accordance with rules given with the notice—

(a)to make and deliver to the inspector within the time limited by the notice a return containing such information as may be required in pursuance of the notice, and

(b)to deliver with the return such accounts and statements as may be required in pursuance of the notice.

(3)An inspector may by a notice given to any partner require the partner—

(a)to make and deliver to the inspector within the time limited by the notice a return containing such information as may be required in pursuance of the notice, and

(b)to deliver with the return such accounts and statements as may be required in pursuance of the notice;

and a notice may be given to any one partner or separate notices may be given to each partner or to such partners as the inspector thinks fit.

(4)Every return under this section shall include—

(a)a declaration of the names and residences of the partners;

(b)a declaration by the person making the return to the effect that the return is to the best of his knowledge correct and complete.

(5)A notice under this section may require different information, accounts and statements for different periods or in relation to different descriptions of source of income.

(6)Notices under this section may require different information, accounts and statements in relation to different descriptions of partnership.”

(2)In section 12 of that Act (information about chargeable gains)—

(a)in subsection (1) for the words “Section 8” there shall be substituted the words “ Sections 8 and 8A ” and for the words “it applies” there shall be substituted the words “ they apply ”;

(b)in subsection (2) after the words “section 8” there shall be inserted the words “ or section 8A ”;

(c)in subsection (4) the words “of income of a partnership” shall be omitted.

(3)In section 93 of that Act (penalties) in subsection (1) for the words “9 of this Act (or either” there shall be substituted the words “ 8A or 9 of this Act (or any ”.

(4)In section 95 of that Act (penalties) in subsection (1)(a) for the words “9 of this Act (or either” there shall be substituted the words “ 8A or 9 of this Act (or any ”.

(5)This section applies where a notice to deliver a return was, or falls to be, given after 5th April 1990.

F6891. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

92 Information powers relating to interest.U.K.

(1)Section 17 of the M6Taxes Management Act 1970 (interest paid or credited by banks etc. without deduction of income tax) shall be amended as mentioned in subsections (2) and (3) below.

(2)In subsection (1)—

(a)after the words “without deduction of income tax” there shall be inserted the words “ or after deduction of income tax ”;

(b)after the words “the amount of the interest” there shall be inserted the words “ actually paid or credited and (where the interest was paid or credited after deduction of income tax) the amount of the interest from which the tax was deducted and the amount of the tax deducted ”;

(c)paragraph (a) of the proviso shall be omitted.

(3)The following subsections shall be inserted after subsection (4)—

“(5)The Board may by regulations provide as mentioned in all or any of the following paragraphs—

(a)that a return under subsection (1) above shall contain such further information as is prescribed if the notice requiring the return specifies the information and requires it to be contained in the return;

(b)that a person required to make and deliver a return under subsection (1) above shall furnish with the return such further information as is prescribed if the notice requiring the return specifies the information and requires it to be so furnished;

(c)that if a person is required to furnish information under any provision made under paragraph (b) above, and the notice requiring the return specifies the form in which the information is to be furnished, the person shall furnish the information in that form;

(d)that a notice under subsection (1) above shall not require prescribed information;

and in this subsection “prescribed” means prescribed by the regulations.

(6)Regulations under subsection (5) above—

(a)shall be made by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons,

(b)may make different provision in relation to different cases or descriptions of case, and

(c)may include such supplementary, incidental, consequential or transitional provisions as appear to the Board to be necessary or expedient.”

(4)Section 18 of that Act (interest paid without deduction of income tax) shall be amended as mentioned in subsections (5) and (6) below.

(5)In subsection (1)—

(a)after the words “without deduction of income tax” there shall be inserted the words “ or after deduction of income tax ”;

(b)in paragraph (b) for the words “so paid or received” there shall be substituted the words “ actually paid or received and (where the interest has been paid or received after deduction of income tax) the amount of the interest from which the tax has been deducted and the amount of the tax deducted ”;

(c)for the words “its amount” there shall be substituted the words “ the amount actually received and (where the interest has been received after deduction of income tax) the amount of the interest from which the tax has been deducted and the amount of the tax deducted ”.

(6)The following subsections shall be inserted after subsection (3A)—

“(3B)The Board may by regulations provide as mentioned in all or any of the following paragraphs—

(a)that a person required to furnish information under subsection (1) above shall furnish at the same time such further information as is prescribed if the notice concerned specifies the information and requires it to be so furnished;

(b)that if a person is required to furnish information under subsection (1) above or under any provision made under paragraph (a) above, and the notice concerned specifies the form in which the information is to be furnished, the person shall furnish the information in that form;

(c)that a notice under subsection (1) above shall not require prescribed information;

and in this subsection “prescribed” means prescribed by the regulations.

(3C)Regulations under subsection (3B) above—

(a)shall be made by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons,

(b)may make different provision in relation to different cases or descriptions of case, and

(c)may include such supplementary, incidental, consequential or transitional provisions as appear to the Board to be necessary or expedient.”

(7)Subsections (1) to (3) above shall have effect as regards a case where interest is paid or credited in the year 1991-92 or a subsequent year of assessment.

(8)Subsections (4) to (6) above shall have effect as regards a case where interest is paid in the year 1991-92 or a subsequent year of assessment.

93 Restrictions on Board’s power to call for information.U.K.

(1)In section 20 of the M7Taxes Management Act 1970 (powers to call for information), after subsection (7) there shall be inserted—

“(7A)A notice under subsection (2) above is not to be given unless the Board have reasonable grounds for believing—

(a)that the person to whom it relates may have failed or may fail to comply with any provision of the Taxes Acts; and

(b)that any such failure is likely to have led or to lead to serious prejudice to the proper assessment or collection of tax.”

(2)This section shall apply with respect to notices given on or after the day on which this Act is passed.

F6994. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Corporation tax determinationsU.K.

F7095. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F7196. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Claims by companiesU.K.

F7297. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

98 Repayment of income tax deducted at source.U.K.

(1)The Taxes Act 1988 shall be amended as follows.

(2)In section 7(2) (set off against corporation tax of income tax deducted from payments received by resident companies) the words from “and accordingly” to the end shall be omitted.

F73(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)In section 11(3) (set off against corporation tax of income tax deducted from payments received by non-resident companies) the words from “and accordingly” to the end shall be omitted.

(5)This section applies in relation to income tax falling to be set off against corporation tax for accounting periods ending after the day appointed for the purposes of section 10 of the Taxes Act 1988 (pay and file).

99 Loss relief.U.K.

(1)The Taxes Act 1988 shall be amended as follows.

(2)In section 393 (relief for trading losses) in subsection (1) (carry forward of losses on the making of a claim)—

(a)for the words “the company may make a claim requiring that the loss” there shall be substituted the words “ the loss shall ”, and

(b)for the words “on that claim” there shall be substituted the words “ under this subsection ”;

and in subsection (11) (time limit for claims) the words from the beginning to “of six years; and” shall be omitted.

(3)In section 396 (relief for Case VI losses on the making of a claim)—

(a)in subsection (1) for the words “the company may make a claim requiring that the loss” there shall be substituted the words “ the loss shall ”, and

(b)subsection (3) (time limit for claims) shall cease to have effect.

(4)This section applies in relation to accounting periods ending after the day appointed for the purposes of section 10 of the Taxes Act 1988 (pay and file).

F74100. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F75101. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F76102. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F77103. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

MiscellaneousU.K.

104 Officers.U.K.

(1)In section 1 of the M8Taxes Management Act 1970 (appointment of inspectors etc.) the following subsections shall be inserted after subsection (2)—

“(2A)The Board may appoint a person to be an inspector or collector for general purposes or for such specific purposes as the Board think fit.

(2B)Where in accordance with the Board’s administrative practices a person is authorised to act as an inspector or collector for specific purposes, he shall be deemed to have been appointed to be an inspector or collector for those purposes.”

(2)In section 55 of that Act (recovery of tax not postponed)—

(a)in subsection (7) for the words “the inspector” there shall be substituted the words “ an inspector ”;

F78(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)The amendment made by subsection (1) above shall be deemed always to have had effect.

(4)The amendments made by subsection (2) above shall apply where notice of appeal is given on or after the day on which this Act is passed.

105 Recovery of excessive repayments of tax.U.K.

(1)In section 30 of the M9Taxes Management Act 1970 (recovery of excessive repayments of tax) the following subsection shall be inserted after subsection (1)—

“(1A)Subsection (1)

above shall not apply where the amount of tax which has been repaid is assessable under section 29 of this Act.”

(2)This section applies in relation to amounts of tax repaid on or after the day on which this Act is passed.

106 Corporation tax: collection.U.K.

In section 10 of the Taxes Act 1988 (time for payment of tax) the following subsection shall be substituted for subsection (2)—

“(2)Where by virtue of subsection (1)(a) above corporation tax for an accounting period of a company is due without the making of an assessment, the amount for the time being shown in a return by the company under section 11 of the Management Act (corporation tax return) as the corporation tax for the period shall be treated for the purposes of Part VI of the Management Act (collection and recovery) as tax charged and due and payable under an assessment on the company.”