UKPGA-1990-29 — Finance Act 1990

preamble

Most Gracious Sovereign,WE, Your Majesty’s most dutiful and loyal subjects, the Commons of the United Kingdom in Parliament assembled, towards raising the necessary supplies to defray Your Majesty’s public expenses, and making an addition to the public revenue, have freely and voluntarily resolved to give and grant unto Your Majesty the several duties hereinafter mentioned; and do therefore most humbly beseech Your Majesty that it may be enacted, and be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

Paragraph

Most Gracious Sovereign,WE, Your Majesty’s most dutiful and loyal subjects, the Commons of the United Kingdom in Parliament assembled, towards raising the necessary supplies to defray Your Majesty’s public expenses, and making an addition to the public revenue, have freely and voluntarily resolved to give and grant unto Your Majesty the several duties hereinafter mentioned; and do therefore most humbly beseech Your Majesty that it may be enacted, and be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

Part I

Customs and Excise and Value Added Tax

s. 1 — Spirits, beer, wine, made-wine and cider.

s. 1(1)

In section 5 of the Alcoholic Liquor Duties Act 1979 (spirits) for “£15.77” there shall be substituted “ £17.35 ”.

s. 1(2)

In section 36 of that Act (beer) for “£0.90” there shall be substituted “ £0.97 ”.

s. 1(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 Schedule 1 to this Act.

s. 1(4)

In section 62(1) of that Act (cider) for “£17.33” there shall be substituted “ £18.66 ”.

s. 1(5)

This section shall be deemed to have come into force at 6 o’clock in the evening of 20th March 1990.

s. 2 — Tobacco products.

s. 2(1)

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

s. 2(2)

This section shall be deemed to have come into force on 23rd March 1990.

s. 3 — Hydrocarbon oil.

s. 3(1)

In section 6 of the Hydrocarbon Oil Duties Act 1979—

s. 3(1)(a)

in subsection (1), for “£0.2044” (duty on light oil) and “£0.1729” (duty on heavy oil) there shall be substituted “ £0.2248 ” and “ £0.1902 ” respectively; and

s. 3(1)(b)

subsection (2A) (special rate of duty on petrol below 4 star) shall cease to have effect.

s. 3(2)

In section 11(1) of that Act, for “£0.0077” (rebate on fuel oil) and “£0.0110” (rebate on gas oil) there shall be substituted “ £0.0083 ” and “ £0.0118 ” respectively.

s. 3(3)

In section 13A(1) of that Act (rebate on unleaded petrol), for “£0.0272” there shall be substituted “ £0.0299 ”.

s. 3(4)

In section 14(1) of that Act (rebate on light oil for use as furnace fuel), for “£0.0077” there shall be substituted “ £0.0083 ”.

s. 3(5)

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s. 3(6)

Subsections (1) to (4) above shall be deemed to have come into force at 6 o’clock in the evening of 20th March 1990.

s. 4 — Pool betting duty.

s. 4(1)

In section 7(1) of the Betting and Gaming Duties Act 1981 (which specifies 42½ per cent. as the rate of pool betting duty), for the words “42½ per cent.” there shall be substituted the words “ 40 per cent. ”.

s. 4(2)

This section shall apply in relation to bets made at any time by reference to an event taking place on or after 6th April 1990.

s. 5 — Vehicles excise duty.

s. 5(1)

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s. 5(2)

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s. 5(3)

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s. 5(4)

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s. 5(5)

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s. 5(6)

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s. 5(7)

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s. 5(8)

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s. 5(9)

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s. 6 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 7 — Entry of goods on importation.

Schedule 3 to this Act (which amends the provisions of the Customs and Excise Management Act 1979 about initial and supplementary entries and postponed entry) shall have effect in relation to goods imported on or after the day on which this Act is passed.

s. 8 — Spirits methylated abroad.

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s. 9 — Lodgings for officers in charge of distillery.

In section 12 of the Alcoholic Liquor Duties Act 1979 (licence to manufacture spirits) subsections (6) to (9) (requirement that distiller provide lodgings for officers in charge of distillery) shall cease to have effect.

s. 10 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 11 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 12 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 13 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 14 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 15 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 16 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part II

Income Tax, Corporation Tax and Capital Gains Tax

s. 17 — Rates and main allowances.

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s. 18 — Relief for blind persons.

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s. 19 — Charge and rate of corporation tax for 1990.

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

s. 20 — Small companies.

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s. 21 — Care for children.

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s. 22 — Car benefits.

s. 22(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—

s. 23 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 24 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 25 — Donations to charity by individuals.

s. 25(1)

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s. 25(2)

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s. 25(3)

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s. 25(3A)

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s. 25(4)

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s. 25(5)

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s. 25(5A)

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s. 25(5B)

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s. 25(5C)

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s. 25(5D)

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s. 25(5E)

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s. 25(5F)

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s. 25(5G)

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s. 25(5H)

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s. 25(5I)

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s. 25(5J)

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s. 25(6)

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s. 25(7)

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s. 25(8)

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s. 25(9)

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s. 25(9A)

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s. 25(10)

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s. 25(10A)

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s. 25(11)

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s. 25(12)

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s. 25(13)

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s. 26 — Company donations to charity.

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s. 27 — Maximum qualifying company donations.

s. 27(1)

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s. 27(2)

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s. 27(3)

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s. 27(4)

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s. 28 — Tax-exempt special savings accounts.

s. 28(1)

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s. 28(2)

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s. 28(3)

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s. 29 — Extension of SAYE.

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s. 30 — Building societies.

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

s. 31 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 32 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 33 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 34 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 35 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 36 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 37 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 38 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 39 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 40 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 41 — Apportionment of income etc.

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s. 42 — Overseas life assurance business.

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s. 43 — Deduction for policy holders’ tax.

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s. 44 — Reinsurance commissions.

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s. 45 — Policy holders’ share of profits etc.

s. 45(1)

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s. 45(2)

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s. 45(3)

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s. 45(4)

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s. 45(5)

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s. 45(6)

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s. 45(7)

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s. 45(8)

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s. 45(9)

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s. 45(10)

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s. 45(11)

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s. 46 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 47 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 48 — Transfers of long term business.

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s. 49 — Friendly societies: increased tax exemption.

s. 49(1)

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s. 49(2)

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s. 49(3)

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s. 49(4)

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s. 49(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 ”.

s. 50 — Friendly societies: application of enactments.

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s. 51 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 52 — Unit trusts: repeals.

s. 52(1)

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

s. 52(2)

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

s. 52(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.

s. 52(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”.

s. 52(5)

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

s. 52(6)

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

s. 52(7)

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

s. 52(8)

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

s. 53 — Unit trust managers: exemption from bond-washing provisions.

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s. 54 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 55 — Investment trusts.

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s. 56 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 57 — Deep gain securities.

s. 57(1)

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

s. 57(2)

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

s. 57(3)

The amendment made by this section shall be deemed always to have had effect.

s. 58 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 59 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 60 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 61 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 62 — CT treatment of PRT repayment.

s. 62(1)

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s. 62(2)

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s. 62(3)

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s. 63 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 64 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 65 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 66 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 67 — Dual resident companies: controlled foreign companies.

s. 67(1)

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s. 67(2)

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s. 67(3)

In Schedule 25 to that Act—

s. 67(3)(a)

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

s. 67(3)(b)

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s. 67(3)(c)

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s. 67(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.

s. 68 — Movements of capital between residents of member States.

s. 68(1)

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s. 68(2)

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s. 68(3)

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

s. 68(3)(a)

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

s. 68(3)(b)

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s. 68(3)(c)

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s. 68(3)(d)

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s. 68(4)

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

s. 69 — European Economic Interest Groupings.

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.

s. 70 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 71 — Relief for interest.

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.

s. 72 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 73 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 74 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 75 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 76 — Training and enterprise councils and local enterprise companies.

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s. 77 — Expenses of entertainers.

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s. 78 — Waste disposal.

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s. 79 — Priority share allocations for employees etc.

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s. 80 — Broadcasting: transfer of undertakings of Independent Broadcasting Authority and Cable Authority.

Schedule 12 to this Act shall have effect.

s. 81 — Futures and options: exemptions.

s. 81(1)

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s. 81(2)

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

s. 81(3)

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s. 81(4)

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

s. 81(5)

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

s. 81(6)

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s. 81(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.

s. 81(8)

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

s. 82 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 83 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 84 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 85 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 86 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 87 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 88 — Capital allowances: miscellaneous amendments.

Schedule 13 to this Act shall have effect.

s. 89 — Correction of errors in Taxes Act 1988.

Schedule 14 to this Act shall have effect.

s. 90 — Income tax returns.

s. 90(1)

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

s. 90(2)

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

s. 90(2)(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 ”;

s. 90(2)(b)

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

s. 90(2)(c)

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

s. 90(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 ”.

s. 90(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 ”.

s. 90(5)

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

s. 91 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 92 — Information powers relating to interest.

s. 92(1)

Section 17 of the Taxes 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.

s. 92(2)

In subsection (1)—

s. 92(2)(a)

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

s. 92(2)(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 ”;

s. 92(2)(c)

paragraph (a) of the proviso shall be omitted.

s. 92(3)

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

s. 92(4)

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

s. 92(5)

In subsection (1)—

s. 92(5)(a)

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

s. 92(5)(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 ”;

s. 92(5)(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 ”.

s. 92(6)

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

s. 92(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.

s. 92(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.

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

s. 93(1)

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

s. 93(2)

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

s. 94 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 95 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 96 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 97 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 98 — Repayment of income tax deducted at source.

s. 98(1)

The Taxes Act 1988 shall be amended as follows.

s. 98(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.

s. 98(3)

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s. 98(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.

s. 98(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).

s. 99 — Loss relief.

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s. 100 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 101 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 102 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 103 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 104 — Officers.

s. 104(1)

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

s. 104(2)

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

s. 104(2)(a)

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

s. 104(2)(b)

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s. 104(3)

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

s. 104(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.

s. 105 — Recovery of excessive repayments of tax.

s. 105(1)

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

s. 105(2)

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

s. 106 — Corporation tax: collection.

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

Part III

Stamp Duty and Stamp Duty Reserve Tax

s. 107 — Stamp duty to be abolished on bearer instruments.

s. 107(1)

Stamp duty shall not be chargeable under Schedule 15 to the Finance Act 1999 (bearer instruments).

s. 107(2)

Subsection (1) above applies in relation to the charge under paragraph 1 of that Schedule (charge on issue) where the instrument is issued on or after the abolition day.

s. 107(3)

Subsection (1) above applies in relation to the charge under paragraph 2 of that Schedule (charge on transfer of stock) where the stock constituted by or transferable by means of the instrument is transferred on or after the abolition day.

s. 108 — Transfer of securities: abolition of stamp duty.

s. 108(1)

Stamp duty shall not be chargeable under Schedule 13 to the Finance Act 1999 (transfer of securities) or section 67(3) or 70(3) of the Finance Act 1986 (stamp duty on certain transfers to depositary receipt systems and clearance systems).

s. 108(7)

Subject to subsection (8) below, this section applies if the instrument is executed in pursuance of a contract made on or after the abolition day.

s. 108(8)

In the case of an instrument—this section applies if the instrument is executed on or after the abolition day.

s. 108(8)(a)

which falls within section 67(1) or (9) of the Finance Act 1986 (depositary receipts) or section 70(1) or (9) of that Act (clearance services), or

s. 108(8)(b)

which does not fall within section 67(1) or (9) or section 70(1) or (9) of that Act and is not executed in pursuance of a contract,

s. 109 — Stamp duty: other repeals.

s. 109(1)

Section 83 of the Stamp Act 1891 (fine for certain acts relating to securities) shall not apply where an instrument of assignment or transfer is executed, or a transfer or negotiation of the stock constituted by or transferable by means of a bearer instrument takes place, on or after the abolition day.

s. 109(2)

The following provisions (which relate to the cancellation of certain instruments) shall not apply where the stock certificate or other instrument is entered on or after the abolition day—

s. 109(2)(a)

section 109(1) of the Stamp Act 1891,

s. 109(2)(b)

section 5(2) of the Finance Act 1899,

s. 109(2)(c)

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s. 109(2)(d)

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s. 109(3)

Section 67 of the Finance Act 1963 (prohibition of circulation of blank transfers) shall not apply where the sale is made on or after the abolition day; and section 16 of the Finance Act (Northern Ireland) 1963 (equivalent provision for Northern Ireland) shall not apply where the sale is made on or after the abolition day.

s. 109(4)

No person shall be required to notify the Commissioners under section 68(1) or (2) or 71(1) or (2) of the Finance Act 1986 (depositary receipts and clearance services) if he first issues the receipts, provides the services or holds the securities as there mentioned on or after the abolition day.

s. 109(5)

No company shall be required to notify the Commissioners under section 68(3) or 71(3) of that Act if it first becomes aware as there mentioned on or after the abolition day.

s. 109(6)

The following provisions shall cease to have effect—

s. 109(6)(a)

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

s. 109(6)(b)

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

s. 109(6)(c)

section 33 of the Finance Act 1970 (composition by financial institutions in respect of stamp duty),

s. 109(6)(d)

section 127(7) of the Finance Act 1976 (extension of composition provisions to Northern Ireland), and

s. 109(6)(e)

section 85 of the Finance Act 1986 (provisions about stock, marketable securities, etc.).

s. 109(7)

The provisions mentioned in subsection (6) above shall cease to have effect as provided by the Treasury by order.

s. 109(8)

An order under subsection (7) above—

s. 109(8)(a)

shall be made by statutory instrument;

s. 109(8)(b)

may make different provision for different provisions or different purposes;

s. 109(8)(c)

may include such supplementary, incidental, consequential or transitional provisions as appear to the Treasury to be necessary or expedient.

s. 109(9)

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

s. 110 — Stamp duty reserve tax: abolition.

s. 110(1)

Stamp duty reserve tax shall cease to be chargeable.

s. 110(2)

In relation to the charge to tax under section 87 of the Finance Act 1986 subsection (1) above applies where—

s. 110(2)(a)

the agreement to transfer is conditional and the condition is satisfied on or after the abolition day, or

s. 110(2)(b)

the agreement is not conditional and is made on or after the abolition day.

s. 110(3)

In relation to the charge to tax under section 93(1) of that Act subsection (1) above applies where securities are transferred, issued or appropriated on or after the abolition day (whenever the arrangement was made).

s. 110(4)

In relation to the charge to tax under section 96(1) of that Act subsection (1) above applies where securities are transferred or issued on or after the abolition day (whenever the arrangement was made).

s. 110(5)

In relation to the charge to tax under section 93(10) of that Act subsection (1) above applies where securities are issued or transferred on sale, under terms there mentioned, on or after the abolition day.

s. 110(6)

In relation to the charge to tax under section 96(8) of that Act subsection (1) above applies where securities are issued or transferred on sale, under terms there mentioned, on or after the abolition day.

s. 110(7)

Where before the abolition day securities are issued or transferred on sale under terms mentioned in section 93(10) of that Act, in construing section 93(10) the effect of subsections (1) and (3) above shall be ignored.

s. 110(8)

Where before the abolition day securities are issued or transferred on sale under terms mentioned in section 96(8) of that Act, in construing section 96(8) the effect of subsections (1) and (4) above shall be ignored.

s. 111 — General.

s. 111(1)

In sections 107 to 110 above “the abolition day” means such day as may be appointed by the Treasury by order made by statutory instrument.

s. 111(2)

Sections 107 to 109 above shall be construed as one with the Stamp Act 1891.

s. 112 — Stamp duty.

s. 112(1)

In section 143 of the Finance Act 1988 (paired shares) in subsection (1)(b) for the words “an equal number of” there shall be substituted the word “ other ”.

s. 112(2)

Subsection (1) above applies where—

s. 112(2)(a)

the offers referred to in section 143(1) are made, or are to be made, on or after the day on which this Act is passed, and

s. 112(2)(b)

before the offers are made, or are to be made, units comprising shares in the two companies concerned were offered (whether before or on or after the day on which this Act is passed) in circumstances where section 143 applied without the amendment made by subsection (1) above.

s. 113 — Stamp duty reserve tax.

s. 113(1)

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

s. 113(2)

In subsection (6A) (paired shares) in paragraph (b) for the words “an equal number of” there shall be substituted the word “ other ”.

s. 113(3)

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

s. 113(4)

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

s. 113(5)

Subsection (2) above applies where—

s. 113(5)(a)

the offers referred to in section 99(6A) are made on or after the day on which this Act is passed, and

s. 113(5)(b)

before the offers are made, units comprising shares in the two companies concerned were offered (whether before or on or after the day on which this Act is passed) in circumstances where section 99(6A) applied without the amendment made by subsection (2) above.

s. 113(6)

Subsections (3) and (4) above apply where—

s. 113(6)(a)

the shares referred to in section 99(6B) are issued on or after the day on which this Act is passed, and

s. 113(6)(b)

before they are issued, units comprising shares in the two companies concerned were offered (whether before or on or after the day on which this Act is passed) in circumstances where section 99(6A) applied without the amendment made by subsection (2) above.

s. 114 — International organisations.

s. 114(1)

In section 126 of the Finance Act 1984 (tax exemptions in relation to designated international organisations) in subsection (3) the following paragraph shall be inserted after paragraph (c)—

s. 114(2)

Where an organisation or body is designated under section 126(1) or (4) before the day on which this Act is passed, subsection (1) above applies in relation to the issue of securities by the organisation or body on or after that day.

s. 114(3)

Where an organisation or body is designated under section 126(1) or (4) on or after the day on which this Act is passed, subsection (1) above applies in relation to the issue of securities by the organisation or body after the designation.

Part IV

Miscellaneous and General

s. 115 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 116 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 117 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 118 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 119 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 120 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 121 — Limit on PRT repayment interest where loss carried back.

s. 121(1)

Schedule 2 to the Oil Taxation Act 1975 (management and collection of PRT) shall be amended as follows.

s. 121(2)

At the beginning of paragraph 16 (interest on repayments) there shall be inserted the words “ Subject to paragraph 17 below ”.

s. 121(3)

After that paragraph there shall be inserted the following paragraph—

s. 122 — Variation, on account of fraudulent or negligent conduct, of decision on expenditure claim etc.

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

s. 123 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s. 124 — Inheritance tax: restriction on power to require information.

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

s. 125 — Information for tax authorities in other member States.

s. 125(1)

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s. 125(2)

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s. 125(3)

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s. 125(4)

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s. 125(5)

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s. 125(6)

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s. 126 — Pools payments for football ground improvements.

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s. 127 — Definition of “local authority” for certain tax purposes.

s. 127(1)

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s. 127(2)

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s. 127(3)

Schedule 18 to this Act (consequential amendments) shall have effect.

s. 127(4)

This section shall be deemed to have come into force on 1st April 1990.

s. 128 — Repayment of fees and charges.

s. 128(1)

This section applies where at the beginning of the day on which this Act is passed—

s. 128(1)(a)

an enactment confers power to make provision for payment of a fee or charge (however described), and

s. 128(1)(b)

sums paid in pursuance of provision made in exercise of the power are payable into the Consolidated Fund.

s. 128(2)

Subject to subsection (3) below, the enactment shall be treated as also conferring power to make provision about repayment of sums paid, or purported to be paid, in pursuance of provision made in exercise of the power.

s. 128(3)

Subsection (2) above shall not apply if the fee or charge is one—

s. 128(3)(a)

repayment of which is prohibited or regulated by an enactment, or

s. 128(3)(b)

power to make provision about repayment of which is expressly conferred, or expressly negatived, to any extent.

s. 128(4)

Without prejudice to the generality of the power conferred by virtue of subsection (2) above, the provision which may be made by virtue of that subsection includes provision—

s. 128(4)(a)

that repayment shall be made only if a specified person is satisfied that specified conditions are met or in other specified circumstances;

s. 128(4)(b)

that repayment shall be made in part only;

s. 128(4)(c)

that, in the case of partial repayment, the amount repaid shall be a specified sum or determined in a specified manner; and

s. 128(4)(d)

for repayment of different amounts in different circumstances.

s. 128(5)

In subsection (4) above “specified” means specified in the instrument exercising the power.

s. 128(6)

In determining for the purposes of this section whether sums are payable into the Consolidated Fund, section 3 of the Government Trading Funds Act 1973 (payments into a trading fund) shall be disregarded.

s. 128(7)

In this section “enactment” includes Northern Ireland legislation as defined in section 24(5) of the Interpretation Act 1978.

s. 128(8)

An Order in Council under paragraph 1(1)(b) of Schedule 1 to the Northern Ireland Act 1974 (legislation for Northern Ireland in the interim period) which states that it is made only for purposes corresponding to those of this section—

s. 128(8)(a)

shall not be subject to sub-paragraphs (4) and (5) of paragraph 1 of that Schedule (affirmative resolution of both Houses of Parliament); but

s. 128(8)(b)

shall be subject to annulment in pursuance of a resolution of either House.

s. 129 — Settlement of stock disputes by deputy registrars.

In section 5 of the National Debt Act 1972 (settlement by Chief Registrar of friendly societies of disputes as to holdings on National Savings Stock Register)—

s. 129(a)

in subsection (1), after the words “Chief Registrar of friendly societies” there shall be inserted the words “ or a deputy appointed by him ”,

s. 129(b)

in subsection (2), after the words “Chief Registrar” there shall be inserted the words “ or deputy ”,

s. 129(c)

in subsection (3)(a), after the words “Chief Registrar of friendly societies” there shall be inserted the words “ or a deputy appointed by him ”, and

s. 129(d)

subsection (3)(b) shall cease to have effect.

s. 130 — Limit for local loans.

In section 4(1) of the National Loans Act 1968 (which provides that the aggregate of any commitments of the Public Works Loan Commissioners in respect of undertakings to grant local loans and any amount outstanding in respect of the principal of such loans shall not exceed £42,000 million or such other sum not exceeding £50,000 million as the Treasury may specify by order) for the words “£42,000 million” and “£50,000 million” there shall be substituted respectively “ £55,000 million ” and “ £70,000 million ”.

s. 131 — Interpretation etc.

s. 131(1)

In this Act “the Taxes Act 1970” means the Income and Corporation Taxes Act 1970 and “the Taxes Act 1988” means the Income and Corporation Taxes Act 1988.

s. 131(2)

Chapter II of Part I of this Act shall be construed as one with the Value Added Tax Act 1983.

s. 131(3)

Part II of this Act, so far as it relates to capital gains tax, shall be construed as one with the Capital Gains Tax Act 1979.

s. 132 — Repeals.

The enactments specified in Schedule 19 to this Act (which include spent or 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.

s. 133 — Short title.

This Act may be cited as the Finance Act 1990.

Sch 1

Table of Rates of Duty on Wine and Made-Wine

Sch 2

Vehicles Excise Duty: Rates

Sch 2

Amendments of Part I of Schedule 4 to the 1971 Act

Sch 2 para 1

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Sch 2 para 2

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Sch 2 para 3

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Sch 2 para 4

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Sch 2 para 5

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Sch 2 para 6

Sch 2 para 6(1)

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Sch 2 para 6(2)

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Sch 2 para 6(3)

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Sch 2 para 6(4)

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Sch 2 para 7

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Sch 2 para 8

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Sch 2 para 9

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Sch 2

Sch 2 para 10

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Sch 2 para 11

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Sch 2

Tables Substituted in Part II of Schedule 4 to the 1971 Act and the 1972 Act

Sch 3

Entry of Goods on Importation

Sch 3 para 1

The Customs and Excise Management Act 1979 shall be amended as follows.

Sch 3 para 2

Sch 3 para 2(1)

Section 37A (initial and supplementary entries) shall be amended as follows.

Sch 3 para 2(2)

In subsection (1)(b), the word “may” shall be omitted.

Sch 3 para 2(3)

The following subsection shall be inserted after subsection (1)—

Sch 3 para 2(4)

In subsection (2), for the words from the beginning to “unpaid duty,” there shall be substituted the words—.

Sch 3 para 2(5)

In subsection (3) after the words “initial entry” there shall be inserted the words “ under subsection (1) above ”.

Sch 3 para 2(6)

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

Sch 3 para 3

Sch 3 para 3(1)

Section 37B (postponed entry) shall be amended as follows.

Sch 3 para 3(2)

The following subsection shall be inserted after subsection (1)—

Sch 3 para 3(3)

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

Sch 3 para 3(4)

In subsection (4), after “(3)(a)” there shall be inserted “ or (3B)(a) ”.

Sch 3 para 3(5)

In subsection (5), for the words “this section” there shall be substituted the words “ subsection (1) or (2) above ”.

Sch 3 para 3(6)

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

Sch 3 para 3(7)

In subsection (6), for the words “this section” there shall be substituted the words “ subsection (1) or (2) above ”.

Sch 3 para 3(8)

The following subsection shall be inserted after subsection (6)—

Sch 3 para 3(9)

In subsection (7)—

Sch 3 para 3(9)(a)

in paragraph (a), after “(1)” there shall be inserted “ or (1A) ”; and

Sch 3 para 3(9)(b)

after paragraph (b) there shall be inserted the words

Sch 3 para 4

Sch 3 para 4(1)

Section 37C (provisions supplementary to sections 37A and 37B) shall be amended as follows.

Sch 3 para 4(2)

In subsection (1)(a)—

Sch 3 para 4(2)(a)

for the word “importer” there shall be substituted the word “ person ”; and

Sch 3 para 4(2)(b)

for the words “or (2)” there shall be substituted the words “ , (1A), (2) or (3A) ”.

Sch 3 para 4(3)

In subsection (1)(b), for the word “importer” there shall be substituted the word “ person ”.

Sch 3 para 4(4)

In subsection (2)(a), for the word “importer” there shall be substituted the word “ person ”.

Sch 4

Sch 5

Building Societies and Deposit-Takers

Sch 5 para 1

The Taxes Act 1988 shall be amended as mentioned in paragraphs 2 to 14 below.

Sch 5 para 2

Sch 5 para 2(1)

Section 476 (building societies: regulations for payment of tax) shall cease to have effect.

Sch 5 para 2(2)

This paragraph shall apply as regards the year 1991-92 and subsequent years of assessment.

Sch 5 para 3

Sch 5 para 3(1)

Section 477 (investments becoming or ceasing to be relevant building society investments) shall cease to have effect.

Sch 5 para 3(2)

This paragraph shall apply as regards any time falling on or after 6th April 1991.

Sch 5 para 4

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Sch 5 para 5

Sch 5 para 5(1)

Section 479 (interest paid on deposits with banks etc.) shall cease to have effect.

Sch 5 para 5(2)

This paragraph shall apply as regards interest paid or credited on or after 6th April 1991.

Sch 5 para 6

Sch 5 para 6(1)

Section 480 (deposits becoming or ceasing to be composite rate deposits) shall cease to have effect.

Sch 5 para 6(2)

This paragraph shall apply as regards any time falling on or after 6th April 1991.

Sch 5 para 7

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Sch 5 para 8

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Sch 5 para 9

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Sch 5 para 10

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Sch 5 para 11

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Sch 5 para 12

Sch 5 para 12(1)

In section 483 (determination of reduced rate for building societies and composite rate for banks etc.) subsections (1) to (3) and (5) shall cease to have effect.

Sch 5 para 12(2)

This paragraph shall apply where the first year of assessment mentioned in section 483(1) is 1990-91 or a subsequent year of assessment.

Sch 5 para 13

Sch 5 para 13(1)

In section 686 (liability to additional rate tax of certain income of discretionary trusts) subsection (5) shall cease to have effect.

Sch 5 para 13(2)

This paragraph shall apply as regards a sum paid or credited on or after 6th April 1991.

Sch 5 para 14

Sch 5 para 14(1)

In section 687 (payments under discretionary trusts) in subsection (3) the words following paragraph (i) shall cease to have effect.

Sch 5 para 14(2)

This paragraph shall apply as regards an amount paid or credited on or after 6th April 1991.

Sch 5 para 15

In the Table in section 98 of the Taxes Management Act 1970 (penalties for failure to comply with notices etc.) there shall be inserted in the first and second columns, after the entry relating to regulations under section 476(1) of the Taxes Act 1988— “ regulations under section 477A(1); ”.

Sch 5 para 16

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Sch 6

Life Assurance: Apportionment of Income etc.

Sch 6 para 1

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Sch 6 para 2

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Sch 6 para 3

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Sch 6 para 4

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Sch 6 para 5

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Sch 6 para 6

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Sch 6 para 7

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Sch 6 para 8

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Sch 6 para 9

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Sch 6 para 10

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Sch 6 para 11

Sch 6 para 11(1)

...

Sch 6 para 11(1)(a)

in so far as it relates to determinations of profits in accordance with section 83 of the Finance Act 1989, this Schedule shall apply in relation to any period for which such a determination falls to be made, other than a period for which it falls to be made only by virtue of an election under section 83(5) of the Finance Act 1989, and

Sch 6 para 11(1)(b)

in so far as it relates to section 432A of the Taxes Act 1988, this Schedule shall apply to income arising, and disposals occurring, on or after 1st January 1990.

Sch 6 para 11(2)

Subject to sub-paragraph (1) above, this Schedule shall be deemed to have come into force on 1st January 1990.

Sch 6 para 11(3)

The preceding provisions of this paragraph shall have effect subject to paragraph 12 below.

Sch 6 para 12

Sch 6 para 12(1)

Where at the end of 1989 the assets of an insurance company include securities of a class some of which are regarded as a single 1982 holding, and the rest of which are regarded as a single new holding, for the purposes of corporation tax on chargeable gains—

Sch 6 para 12(1)(a)

at the beginning of 1990 there shall be both a 1982 holding and a new holding of the description mentioned in any paragraph of section 440A(2) of the Taxes Act 1988 within which any of the securities fall at that time (whether or not there would be apart from this sub-paragraph), and

Sch 6 para 12(1)(b)

the 1982 holding and the new holding of the description mentioned in any such paragraph shall at that time bear to one another the same proportions as the single 1982 holding and the single new holding at the end of 1989.

Sch 6 para 12(2)

For the period beginning with 1st January 1990 and ending with 19th March 1990, section 440(4) of the Taxes Act 1988 (as substituted by paragraph 8 of this Schedule) and section 440A(2) of that Act shall have effect with the omission of paragraph (d) (so that all assets not within paragraphs (a) to (c) fall within paragraph (e)).

Sch 6 para 12(3)

Sub-paragraph (4) below applies where—and for the purposes of this sub-paragraph a holding is a “relevant” holding if it is not linked to pension business or basic life assurance business and is not an asset of the overseas life assurance fund.

Sch 6 para 12(3)(a)

at the end of 19th March 1990 the assets of an insurance company include securities of a class some of which are regarded as a relevant 1982 holding, and others of which are regarded as a relevant new holding, for the purposes of corporation tax on chargeable gains, and

Sch 6 para 12(3)(b)

some of the securities are included in the company’s long term business fund but others are not;

Sch 6 para 12(4)

Where this sub-paragraph applies—

Sch 6 para 12(4)(a)

at the beginning of 20th March 1990 there shall be both a 1982 holding and a new holding of each of the descriptions mentioned in paragraphs (d) and (e) of section 440A(2) of the Taxes Act 1988 (whether or not there would be apart from this sub-paragraph), and

Sch 6 para 12(4)(b)

the 1982 holding and the new holding of each of those descriptions shall at that time bear to one another the same proportions as the 1982 holding and the new holding mentioned in sub-paragraph (3)(a) above at the end of 19th March 1990.

Sch 6 para 12(5)

Except for the purposes of determining the assets of a company which are linked solely to basic life assurance business, the amendments made by this Schedule shall have effect in relation to a company with the omission of references to overseas life assurance business as respects any time before the provisions of Schedule 7 to this Act have effect in relation to the company.

Sch 6 para 12(6)

Sub-paragraph (7) below applies where—and for the purposes of this sub-paragraph a holding is a “relevant” holding if it is not linked to pension business or basic life assurance business.

Sch 6 para 12(6)(a)

the first accounting period of an insurance company beginning on or after 1st January 1990 begins after 20th March 1990,

Sch 6 para 12(6)(b)

at some time during the accounting period the company carries on overseas life assurance business, and

Sch 6 para 12(6)(c)

immediately before the beginning of the accounting period the assets of the long term business fund of the company include both a relevant 1982 holding and a relevant new holding of securities of the same class;

Sch 6 para 12(7)

Where this sub-paragraph applies—

Sch 6 para 12(7)(a)

at the beginning of the accounting period there shall be both a 1982 holding and a new holding of each of the descriptions mentioned in paragraphs (c) and (d) of section 440A(2) of the Taxes Act 1988 (whether or not there would be apart from this sub-paragraph), and

Sch 6 para 12(7)(b)

the 1982 holding and the new holding of each of those descriptions shall at that time bear to one another the same proportions as the 1982 holding and the new holding mentioned in sub-paragraph (6)(c) above immediately before the beginning of the period.

Sch 6 para 12(8)

No disposal or re-acquisition shall be deemed to occur by virtue of section 440 of the Taxes Act 1988 (as substituted by paragraph 8 of this Schedule) by reason only of the coming into force (in accordance with the provisions of paragraph 11 of this Schedule and this paragraph) of any provision of section 440A of that Act.

Sch 6 para 12(9)

The substitution made by paragraph 8 of this Schedule shall not affect—

Sch 6 para 12(9)(a)

the operation of section 440 of the Taxes Act 1988 (as it has effect before the substitution) before 20th March 1990, or

Sch 6 para 12(9)(b)

the operation of subsections (6) and (7) of that section (as they have effect before the substitution) in relation to the disposal of an asset which has not been deemed to be disposed of by virtue of section 440 (as it has effect after the substitution) before the time of the disposal.

Sch 6 para 12(10)

In this paragraph—“1982 holding” has the meaning given by Part II of Schedule 19 to the Finance Act 1985;“new holding” has the meaning given by Part III of that Schedule; and“securities” has the same meaning as in section 65 of the Capital Gains Tax Act 1979.

Sch 7

Overseas Life Assurance Business

Sch 7 para 1

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Sch 7 para 2

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Sch 7 para 3

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Sch 7 para 4

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Sch 7 para 5

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Sch 7 para 6

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Sch 7 para 7

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Sch 7 para 8

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Sch 7 para 9

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Sch 7 para 10

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Sch 8

Sch 8 para 1

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Sch 8 para 2

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Sch 8 para 3

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Sch 8 para 4

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Sch 8 para 5

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Sch 8 para 6

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Sch 9

Insurance Companies: Transfers of Long Term Business

Sch 9 para 1

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Sch 9 para 2

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Sch 9 para 3

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Sch 9 para 4

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Sch 9 para 5

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Sch 9 para 6

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Sch 9 para 7

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Sch 10

Introduction

Sch 10 para 1

For the purposes of this Schedule a qualifying provision for redemption, in relation to a security, is a provision which—

Sch 10 para 1(a)

provides for redemption before maturity only at the option of the person holding the security for the time being,

Sch 10 para 1(b)

provides for such redemption on one occasion only,

Sch 10 para 1(c)

provides for such redemption to occur on the last day of an income period, and

Sch 10 para 1(d)

is such that the amount payable on redemption on exercise of the option is fixed (as opposed to variable), is determined at the time the security becomes subject to the provision, and constitutes a deep gain.

Sch 10 para 2

Sch 10 para 2(1)

For the purposes of this Schedule a security is a qualifying convertible security at the time of its issue if—

Sch 10 para 2(1)(a)

it fulfils each of the first eight conditions mentioned below, and

Sch 10 para 2(1)(b)

it fulfils the ninth condition mentioned below (where it applies) or it fulfils the ninth and tenth conditions mentioned below (where they apply).

Sch 10 para 2(2)

The first condition is that the security was issued by a company on or after 9th June 1989.

Sch 10 para 2(3)

The second condition is that the security—

Sch 10 para 2(3)(a)

is not a share in a company,

Sch 10 para 2(3)(b)

is redeemable, and

Sch 10 para 2(3)(c)

was not issued in circumstances such that, by virtue of section 209(2)(c) of the Taxes Act 1988, it (or part of it) constituted or fell within a distribution of a company.

Sch 10 para 2(4)

The third condition is that at the time the security was issued it was quoted in the official list of a recognised stock exchange.

Sch 10 para 2(5)

The fourth condition is that under the terms of issue—

Sch 10 para 2(5)(a)

the security can be converted into ordinary share capital in the company which issued it,

Sch 10 para 2(5)(b)

the security either carries no right to interest, or carries a right to interest at a rate which is fixed (as opposed to variable) and determined at the time of issue, and

Sch 10 para 2(5)(c)

any amount payable on redemption (at any time), and any amount payable by way of interest, is payable in the currency in which the issue price is denominated.

Sch 10 para 2(6)

The fifth condition is that at the time of issue of the security it is subject to one (and one only) qualifying provision for redemption.

Sch 10 para 2(7)

The sixth condition is that the yield to redemption for the relevant redemption period represents no more than a reasonable commercial return; and the relevant redemption period is the redemption period which ends with the day on which the occasion for redemption under the qualifying provision for redemption falls.

Sch 10 para 2(8)

The seventh condition is that the security—and paragraph 21 of Schedule 4 to the Taxes Act 1988, and paragraph 22B(1) of Schedule 11 to the Finance Act 1989, shall be ignored in construing paragraphs (a) and (b) above.

Sch 10 para 2(8)(a)

is a deep discount security but would not be one if it were not for the qualifying provision for redemption, or

Sch 10 para 2(8)(b)

is a deep gain security but would not be one if it were not for the qualifying provision for redemption;

Sch 10 para 2(9)

The eighth condition is that the obtaining of a tax advantage by any person was not the main benefit, or one of the main benefits, that might be expected to accrue from issuing the security.

Sch 10 para 2(10)

The ninth condition applies where the security carries a right to interest, and is that—

Sch 10 para 2(10)(a)

the first (or only) interest payment day falls on a day which bears the same date in the month as the day of issue bears, but which occurs in the sixth month after the month in which that day falls, or

Sch 10 para 2(10)(b)

the first (or only) interest payment day falls on the first anniversary of the day of issue.

Sch 10 para 2(11)

The tenth condition applies where there is more than one interest payment day, and is that—

Sch 10 para 2(11)(a)

if sub-paragraph (10)(a) above applies, each interest payment day (other than the first) falls on a day which bears the same date in the month as the interest payment day immediately preceding it bears, but which occurs in the sixth month after the month in which that day falls;

Sch 10 para 2(11)(b)

if sub-paragraph (10)(b) above applies, each interest payment day (other than the first) falls on the first anniversary of the interest payment day immediately preceding it.

Sch 10 para 2(12)

If a security is quoted in the official list of a recognised stock exchange at a time after it was issued but before the end of the qualifying period, for the purposes of sub-paragraph (4) above it shall be deemed to have been quoted in that list at the time it was issued; and the qualifying period is the period of one month beginning with the day on which the security was issued.

Sch 10 para 3

Sch 10 para 3(1)

A security which was a qualifying convertible security at the time of its issue shall continue to be a qualifying convertible security for the purposes of this Schedule.

Sch 10 para 3(2)

But sub-paragraph (1) above shall have effect subject to paragraphs 4(2) and 5(2) below.

Sch 10 para 4

Sch 10 para 4(1)

This paragraph applies where—

Sch 10 para 4(1)(a)

a security becomes at any time (the time in question) subject to a qualifying provision for redemption (the new provision), and

Sch 10 para 4(1)(b)

immediately before that time it was a qualifying convertible security.

Sch 10 para 4(2)

If the relevant requirement is not satisfied, the security shall cease to be a qualifying convertible security for the purposes of this Schedule at the time in question.

Sch 10 para 4(3)

For the purposes of this paragraph the relevant requirement is satisfied if—

Sch 10 para 4(3)(a)

the security becomes subject to the new provision on or after the relevant day but not after the day on which the occasion for redemption under the old provision falls,

Sch 10 para 4(3)(b)

the person who issued the security did not indicate, at any time falling before the relevant day, that the security might become subject to a qualifying provision for redemption (in addition to any other such provision or provisions),

Sch 10 para 4(3)(c)

the day on which the occasion for redemption under the new provision falls is not less than one year after the day on which the occasion for redemption under the old provision falls,

Sch 10 para 4(3)(d)

the amount payable on redemption on exercise of the option for which the new provision provides is not less than the amount payable on redemption on exercise of the option for which the old provision provides,

Sch 10 para 4(3)(e)

the yield to redemption for the relevant redemption period represents no more than a reasonable commercial return, and

Sch 10 para 4(3)(f)

the obtaining of a tax advantage by any person is not the main benefit, or one of the main benefits, that might be expected to accrue from the new provision.

Sch 10 para 4(4)

For the purposes of this paragraph the relevant day is the day falling 30 days before the day on which the occasion for redemption under the old provision falls.

Sch 10 para 4(5)

For the purposes of this paragraph the old provision is—

Sch 10 para 4(5)(a)

if the security became subject to one other qualifying provision for redemption before the time in question, that provision, or

Sch 10 para 4(5)(b)

if the security became subject to more than one qualifying provision for redemption before the time in question, the one to which it last became subject.

Sch 10 para 4(6)

For the purposes of this paragraph the relevant redemption period is the redemption period which ends with the day on which the occasion for redemption under the new provision falls.

Sch 10 para 5

Sch 10 para 5(1)

This paragraph applies where—

Sch 10 para 5(1)(a)

a prohibited event occurs in relation to a security at any time (the time in question), and

Sch 10 para 5(1)(b)

immediately before that time it was a qualifying convertible security.

Sch 10 para 5(2)

The security shall cease to be a qualifying convertible security for the purposes of this Schedule at the time in question.

Sch 10 para 5(3)

For the purposes of this paragraph, a prohibited event occurs in relation to a security if—

Sch 10 para 5(3)(a)

it ceases to be quoted in the official list of a recognised stock exchange,

Sch 10 para 5(3)(b)

it becomes subject to a provision under which it carries a right to interest at a rate which is variable or falls to be determined at a time other than issue (or both),

Sch 10 para 5(3)(c)

it becomes subject to a provision under which any amount payable on redemption (at any time) is payable in a currency different from that in which the issue price is denominated,

Sch 10 para 5(3)(d)

it becomes subject to a provision under which any amount payable by way of interest is payable in a currency different from that in which the issue price is denominated,

Sch 10 para 5(3)(e)

it becomes subject to a provision which would be a qualifying provision for redemption but for the fact that one or more of sub-paragraphs (b) to (d) of paragraph 1 above is (or are) not fulfilled as regards the provision, or

Sch 10 para 5(3)(f)

there is a time when more than 10 per cent. of the securities issued under the relevant prospectus are held by companies which are linked companies at that time.

Sch 10 para 5(4)

For the purposes of sub-paragraph (3)(f) above the relevant prospectus is the prospectus under which the security concerned was issued.

Sch 10 para 5(5)

For the purposes of sub-paragraph (3)(f) above, the question whether companies are linked companies at a particular time shall be determined in accordance with paragraph 4 of Schedule 11 to the Finance Act 1988.

Sch 10 para 6

Sch 10 para 6(1)

For the purposes of this Schedule the amount payable on redemption, on exercise of the option under a provision for redemption (the provision concerned), constitutes a deep gain if it constitutes such a gain by virtue of sub-paragraph (2) or (4) below (or both).

Sch 10 para 6(2)

The amount payable on redemption (on exercise of the option under the provision concerned) constitutes a deep gain if the issue price of the security is less than the amount so payable, and the amount by which it is less represents more than—

Sch 10 para 6(2)(a)

15 per cent. of the amount so payable, or

Sch 10 para 6(2)(b)

half Y per cent. of the amount so payable, where Y is the number of complete years between the day of issue and the day on which the occasion for redemption under the provision concerned falls.

Sch 10 para 6(3)

Sub-paragraph (4) below applies where the security became subject to—before it became subject to the provision concerned.

Sch 10 para 6(3)(a)

a qualifying provision for redemption (the prior provision), or

Sch 10 para 6(3)(b)

qualifying provisions for redemption (the prior provisions),

Sch 10 para 6(4)

The amount payable on redemption (on exercise of the option under the provision concerned) constitutes a deep gain if the base amount is less than the amount so payable, and the amount by which it is less represents more than—

Sch 10 para 6(4)(a)

15 per cent. of the amount so payable, or

Sch 10 para 6(4)(b)

half Y per cent. of the amount so payable, where Y is the number of complete years between the base day and the day on which the occasion for redemption under the provision concerned falls.

Sch 10 para 6(5)

For the purposes of sub-paragraph (4) above—

Sch 10 para 6(5)(a)

the base amount is the amount payable on redemption on exercise of the option provided for by the prior provision (if there is only one) or the last of the prior provisions (if there are two or more), and

Sch 10 para 6(5)(b)

the base day is the day on which the occasion for redemption falls under the prior provision (if there is only one) or the last of the prior provisions (if there are two or more).

Sch 10 para 6(6)

For the purposes of sub-paragraph (5) above the last of the prior provisions is the one to which the security last became subject.

Sch 10 para 7

Sch 10 para 7(1)

This paragraph applies for the purposes of this Schedule.

Sch 10 para 7(2)

In relation to a security which carries a right to interest each of the following is an income period—

Sch 10 para 7(2)(a)

the period beginning with the day of issue and ending with the first (or only) interest payment day, and

Sch 10 para 7(2)(b)

any period beginning with the day after one interest payment day and ending with the next interest payment day.

Sch 10 para 7(3)

In relation to a security which does not carry a right to interest each of the following is an income period—

Sch 10 para 7(3)(a)

the period beginning with the day of issue and ending with the first relevant day, and

Sch 10 para 7(3)(b)

the period beginning with the day after one relevant day and ending with the next relevant day.

Sch 10 para 7(4)

For the purposes of sub-paragraph (3) above each day on which an anniversary of the day of issue falls is a relevant day.

Sch 10 para 8

Sch 10 para 8(1)

For the purposes of this Schedule each of the following is a redemption period in relation to a security—

Sch 10 para 8(1)(a)

the period beginning with the day of issue and ending with the day on which the first (or only) relevant redemption occasion falls, and

Sch 10 para 8(1)(b)

any period beginning with the day after the day on which one relevant redemption occasion falls and ending with the day on which the next relevant redemption occasion falls.

Sch 10 para 8(2)

For the purposes of sub-paragraph (1) above a relevant redemption occasion is an occasion for redemption under a qualifying provision for redemption.

Sch 10 para 9

Sch 10 para 9(1)

For the purposes of this Schedule the yield to redemption for a redemption period is a rate (expressed as a percentage) such that if a sum equal to the relevant amount were to be invested at that rate on the assumption that—the value of that sum on the relevant redemption day would be equal to the amount payable on redemption of the security on that day under the relevant redemption provision.

Sch 10 para 9(1)(a)

the rate would be applied on a compounding basis at the end of each relevant income period, and

Sch 10 para 9(1)(b)

the amount of any interest payable in respect of a relevant income period would be deducted after applying the rate,

Sch 10 para 9(2)

For the purposes of this paragraph the relevant amount is the issue price, in a case where the redemption period concerned is the period falling within paragraph 8(1)(a) above.

Sch 10 para 9(3)

For the purposes of this paragraph the relevant amount is the amount payable on redemption on the last relevant occasion, in a case where the redemption period concerned is one falling within paragraph 8(1)(b) above; and the last relevant occasion is the occasion for redemption, under a qualifying provision for redemption, last occurring before the redemption period begins.

Sch 10 para 9(4)

For the purposes of this paragraph—

Sch 10 para 9(4)(a)

a relevant income period is any income period which consists of or falls within the redemption period,

Sch 10 para 9(4)(b)

the relevant redemption day is the last day of the redemption period, and

Sch 10 para 9(4)(c)

the relevant redemption provision is the qualifying provision for redemption providing for redemption on that day.

Sch 10 para 10

Sch 10 para 10(1)

This paragraph applies for the purposes of this Schedule.

Sch 10 para 10(2)

“Transfer”, in relation to a security, means transfer by way of sale, exchange, gift or otherwise.

Sch 10 para 10(3)

But (notwithstanding sub-paragraph (2) above) “transfer” does not include a transfer made on a conversion of a security into ordinary share capital in a company.

Sch 10 para 10(4)

Where an agreement for the transfer of a security is made, it is transferred, and the person to whom it is agreed to be transferred becomes entitled to it, when the agreement is made and not on a later transfer made pursuant to the agreement; and “entitled”, “transfer” and cognate expressions shall be construed accordingly.

Sch 10 para 10(5)

A person holds a security at a particular time if he is entitled to it at the time.

Sch 10 para 10(6)

A person acquires a security when he becomes entitled to it.

Sch 10 para 10(7)

If an agreement is conditional (whether on the exercise of an option or otherwise) for the purposes of sub-paragraph (4) above it is made when the condition is satisfied.

Sch 10 para 11

Sch 10 para 11(1)

This paragraph applies for the purposes of this Schedule.

Sch 10 para 11(2)

In relation to a security—

Sch 10 para 11(2)(a)

the amount payable (or paid) on redemption does not include any amount payable (or paid) by way of interest,

Sch 10 para 11(2)(b)

the day of issue is the day on which the security is issued, and

Sch 10 para 11(2)(c)

an interest payment day is a day on which interest is payable under the security.

Sch 10 para 11(3)

A deep discount security is a security which is a deep discount security for the purposes of Schedule 4 to the Taxes Act 1988.

Sch 10 para 11(4)

A deep gain security is a security which is a deep gain security for the purposes of Schedule 11 to the Finance Act 1989.

Sch 10 para 11(5)

Ordinary share capital, in relation to a company, means any share capital (by whatever name called) of the company, other than capital the holders of which have a right to a dividend at a fixed rate but have no other right to share in the profits of the company.

Sch 10 para 11(6)

“Tax advantage” has the meaning given by section 709(1) of the Taxes Act 1988.

Sch 10

Charge to Tax

Sch 10 para 12

Sch 10 para 12(1)

For the purposes of this Part of this Schedule a chargeable event occurs if, on or after 9th June 1989, there is a transfer of a security and at the time of the transfer the security—

Sch 10 para 12(1)(a)

is a qualifying convertible security, and

Sch 10 para 12(1)(b)

is subject to at least one qualifying provision for redemption under which the occasion for redemption has not arrived.

Sch 10 para 12(2)

For the purposes of this Part of this Schedule a chargeable event also occurs if—

Sch 10 para 12(2)(a)

a person holding a security redeems it on or after 9th June 1989,

Sch 10 para 12(2)(b)

immediately before the redemption the security is a qualifying convertible security, and

Sch 10 para 12(2)(c)

the redemption is made in exercise of the option for redemption under a qualifying provision for redemption to which the security is subject.

Sch 10 para 12(3)

For the purposes of this Part of this Schedule the chargeable person is the person making the transfer or exercising the option (as the case may be).

Sch 10 para 12(4)

Where a chargeable event occurs—

Sch 10 para 12(4)(a)

the chargeable amount shall be treated as income of the chargeable person,

Sch 10 para 12(4)(b)

the income shall be chargeable to tax under Case III or Case IV (as the case may be) of Schedule D,

Sch 10 para 12(4)(c)

the income shall be treated as arising in the year of assessment in which the chargeable event occurs, and

Sch 10 para 12(4)(d)

notwithstanding anything in sections 64 to 67 of the Taxes Act 1988, the tax shall be computed on the income arising in the year of assessment for which the computation is made.

Sch 10 para 13

Sch 10 para 13(1)

For the purposes of paragraph 12 above the chargeable amount is—

Sch 10 para 13(1)(a)

the amount obtained on transfer or redemption, in a case where that amount is equal to or less than the total income element;

Sch 10 para 13(1)(b)

so much of the amount obtained on transfer or redemption as is equal to the total income element, in a case where that amount is greater than that element.

Sch 10 para 13(2)

For the purposes of this paragraph the amount obtained on transfer or redemption is the amount obtained, in respect of the transfer or redemption, by the person making the transfer or (as the case may be) the person who was entitled to the security immediately before redemption.

Sch 10 para 13(3)

For the purposes of sub-paragraph (2) above the person concerned shall be treated as obtaining in respect of the transfer or redemption—

Sch 10 para 13(3)(a)

any amount he actually obtains in respect of it, and

Sch 10 para 13(3)(b)

any amount he is entitled to obtain, but does not obtain, in respect of it.

Sch 10 para 13(4)

Sub-paragraph (3) above shall not apply where paragraph 16, 17 or 18(2) below applies.

Sch 10 para 14

Sch 10 para 14(1)

The total income element for the purposes of paragraph 13 above shall be determined by—

Sch 10 para 14(1)(a)

finding the income element for each income period (if any) the whole of which consists of or falls within the ownership period, and

Sch 10 para 14(1)(b)

finding the partial income element for each income period (if any) a part of which consists of or falls within the ownership period.

Sch 10 para 14(2)

The aggregate of the income elements and the partial income elements so found is the total income element.

Sch 10 para 14(3)

The ownership period is the period which—

Sch 10 para 14(3)(a)

begins with the day on which the chargeable person acquired the security, and

Sch 10 para 14(3)(b)

ends with the day on which the chargeable event occurs.

Sch 10 para 15

Sch 10 para 15(1)

This paragraph has effect for the purposes of paragraph 14 above.

Sch 10 para 15(2)

The income element for an income period shall be determined in accordance with the formula—A x B 100―C

Sch 10 para 15(3)

For the purposes of sub-paragraph (2) above—

Sch 10 para 15(3)(a)

A is the adjusted issue price of the security,

Sch 10 para 15(3)(b)

B is the figure included in the percentage representing the yield to redemption for the redemption period which consists of the income period or in which the income period falls, and

Sch 10 para 15(3)(c)

C is the amount of interest (if any) payable in respect of the income period.

Sch 10 para 15(4)

The partial income element for an income period a part of which consists of or falls within the ownership period shall be determined in accordance with the formula—D x E F

Sch 10 para 15(5)

For the purposes of sub-paragraph (4) above—

Sch 10 para 15(5)(a)

D is the income element for the income period (determined in accordance with the formula mentioned in sub-paragraph (2) above),

Sch 10 para 15(5)(b)

E is the number of days in the income period which consist of or fall within the ownership period, and

Sch 10 para 15(5)(c)

F is the number of days in the income period.

Sch 10 para 15(6)

The adjusted issue price of a security, in relation to a particular income period, is the aggregate of the issue price of the security and the income elements for all previous income periods of the security (determined in accordance with the formula mentioned in sub-paragraph (2) above).

Sch 10 para 16

Sch 10 para 16(1)

Where an individual who is entitled to a security dies, for the purposes of this Part of this Schedule he shall be treated as—

Sch 10 para 16(1)(a)

transferring it immediately before his death, and

Sch 10 para 16(1)(b)

obtaining in respect of the transfer an amount equal to the market value of the security at the time of the transfer.

Sch 10 para 16(2)

Where a security is transferred by personal representatives to a legatee, for the purposes of paragraph 13 above they shall be treated as obtaining in respect of the transfer an amount equal to the market value of the security at the time of the transfer.

Sch 10 para 16(3)

In sub-paragraph (2) above “legatee” includes any person taking (whether beneficially or as trustee) under a testamentary disposition or on an intestacy or partial intestacy, including any person taking by virtue of an appropriation by the personal representatives in or towards satisfaction of a legacy or other interest or share in the deceased’s property.

Sch 10 para 17

Sch 10 para 17(1)

This paragraph applies where a security is transferred from one person to another and—

Sch 10 para 17(1)(a)

they are connected with each other,

Sch 10 para 17(1)(b)

the transfer is made for a consideration which consists of or includes consideration not in money or money’s worth, or

Sch 10 para 17(1)(c)

the transfer is made otherwise than by way of a bargain made at arm’s length.

Sch 10 para 17(2)

For the purposes of paragraph 13 above the person making the transfer shall be treated as obtaining in respect of it an amount equal to the market value of the security at the time of the transfer.

Sch 10 para 17(3)

Section 839 of the Taxes Act 1988 (connected persons) shall apply for the purposes of this paragraph.

Sch 10 para 18

Sch 10 para 18(1)

An underwriting member of Lloyd’s shall be treated for the purposes of this Part of this Schedule as absolutely entitled as against the trustees to the securities forming part of his premiums trust fund, . . .

Sch 10 para 18(2)

Where a security forms part of a premiums trust fund at the end of 31st December of any relevant year, for the purposes of this Part of this Schedule—and for this purpose relevant years are 1989 and subsequent years.

Sch 10 para 18(2)(a)

the trustees of the fund shall be treated as transferring the security at that time, and

Sch 10 para 18(2)(b)

they shall be treated as obtaining in respect of the transfer an amount equal to the market value of the security at the time of the transfer;

Sch 10 para 18(3)

Where a security forms part of a premiums trust fund at the beginning of 1st January of any relevant year, for the purposes of this Part of this Schedule the trustees of the fund shall be treated as acquiring the security at that time; and for this purpose relevant years are 1990 and subsequent years.

Sch 10 para 18(4)

Sub-paragraph (5) below applies where the following state of affairs exists at the beginning of 1st January of any year or the end of 31st December of any year—

Sch 10 para 18(4)(a)

securities have been transferred by the trustees of a premiums trust fund in pursuance of an arrangement mentioned in section 129(1) or (2) of the Taxes Act 1988,

Sch 10 para 18(4)(b)

the transfer was made to enable another person to fulfil a contract or to make a transfer,

Sch 10 para 18(4)(c)

securities have not been transferred in return, and

Sch 10 para 18(4)(d)

section 129(3) of that Act applies to the transfer made by the trustees.

Sch 10 para 18(5)

The securities transferred by the trustees shall be treated for the purposes of sub-paragraphs (2) and (3) above as if they formed part of the premiums trust fund at the beginning of 1st January concerned or the end of 31st December concerned (as the case may be).

Sch 10 para 18(6)

Paragraph 16(1) above shall not apply where—

Sch 10 para 18(6)(a)

the individual concerned is an underwriting member of Lloyd’s, and

Sch 10 para 18(6)(b)

the security concerned forms part of a premiums trust fund, . . .

Sch 10 para 18(7)

In a case where an amount treated as income chargeable to tax by virtue of paragraph 12 above constitutes profits or gains mentioned in section 450(1) of the Taxes Act 1988—

Sch 10 para 18(7)(a)

section 450(1)(b) shall apply, and

Sch 10 para 18(7)(b)

paragraph 12(4)(c) above shall not apply.

Sch 10 para 18(8)

For the purpose of computing income tax for the year 1987-88 sub-paragraph (7) above shall have effect as if—

Sch 10 para 18(8)(a)

the reference to section 450(1) of the Taxes Act 1988 were to paragraph 2 of Schedule 16 to the Finance Act 1973, and

Sch 10 para 18(8)(b)

the reference to section 450(1)(b) were to paragraph 2(b) of that Schedule.

Sch 10 para 18(9)

In this paragraph “business” and “premiums trust fund” have the meanings given by section 457 of the Taxes Act 1988.]

Sch 10 para 19

Sch 10 para 19(1)

Where on a transfer or redemption of a security by trustees an amount is treated as income chargeable to tax by virtue of paragraph 12 above, the rate at which it is chargeable shall be the rate applicable to trusts for the year of assessment in which the transfer or redemption is made.

Sch 10 para 19(2)

Where the trustees are trustees of a scheme to which section 469 of the Taxes Act 1988 applies, sub-paragraph (1) above shall not apply if or to the extent that the amount is treated as income in the accounts of the scheme.

Sch 10 para 20

Sch 10 para 20(1)

Sub-paragraph (2) below applies where—

Sch 10 para 20(1)(a)

by virtue of paragraph 12(4) above an amount is treated as income of a person and as chargeable to tax under Case IV of Schedule D, and

Sch 10 para 20(1)(b)

the person satisfies the Board, on a claim in that behalf, that he is not domiciled in the United Kingdom, or that (being a Commonwealth citizen or a citizen of the Republic of Ireland) he is not ordinarily resident in the United Kingdom.

Sch 10 para 20(2)

In such a case—

Sch 10 para 20(2)(a)

any amounts received in the United Kingdom in respect of the amount treated as income shall be treated as income arising in the year of assessment in which they are so received, and

Sch 10 para 20(2)(b)

paragraph 12(4) above shall have effect with the substitution of paragraph (a) above for paragraph 12(4)(c).

Sch 10 para 20(3)

For the purposes of sub-paragraph (2) above—

Sch 10 para 20(3)(a)

there shall be treated as received in the United Kingdom all amounts paid, used or enjoyed in, or in any manner or form transmitted or brought to, the United Kingdom, and

Sch 10 para 20(3)(b)

subsections (6) to (9) of section 65 of the Taxes Act 1988 shall apply as they apply for the purposes of subsection (5) of that section.

Sch 10 para 21

Sch 10 para 21(1)

In a case where—that paragraph shall not apply in the case of the transfer or redemption.

Sch 10 para 21(1)(a)

paragraph 12 above would apply (apart from this paragraph) in the case of a transfer or redemption of a security,

Sch 10 para 21(1)(b)

immediately before the transfer or redemption was made the security was held by a charity, and

Sch 10 para 21(1)(c)

the amount which would (apart from this paragraph) be treated as income by virtue of paragraph 12 above is applicable and applied for charitable purposes,

Sch 10 para 21(2)

In this paragraph “charity” has the same meaning as in section 506 of the Taxes Act 1988.

Sch 10 para 22

In a case where—that paragraph shall not apply in the case of the transfer or redemption.

Sch 10 para 22(a)

paragraph 12 above would apply (apart from this paragraph) in the case of a transfer or redemption of a security, and

Sch 10 para 22(b)

immediately before the transfer or redemption was made the security was held for the purposes of an exempt approved scheme (within the meaning of Chapter I of Part XIV of the Taxes Act 1988),

Sch 10 para 23

In a case where—that paragraph shall not apply in the case of the transfer.

Sch 10 para 23(a)

a security is the subject of a transfer which falls within section 129(3) of the Taxes Act 1988, and

Sch 10 para 23(b)

paragraph 12 above would apply in the case of the transfer (apart from this paragraph),

Sch 10 para 24

Section 108 of the Taxation of Chargeable Gains Act 1992 shall apply to the identification, for the purposes of this Part of this Schedule, of qualifying convertible securities transferred or redeemed as it applies to the identification, for the purposes of capital gains tax, of deep discount securities disposed of.

Sch 10

The Issuing Company

Sch 10 para 25

Sch 10 para 25(1)

In a case where—sub-paragraph (2) below shall apply in relation to the company which issued the security.

Sch 10 para 25(1)(a)

a qualifying convertible security is redeemed, and

Sch 10 para 25(1)(b)

the circumstances are such that paragraph 12 above applies in the case of the redemption,

Sch 10 para 25(2)

For the purposes of sections 338 and 494 of the Taxes Act 1988 (allowance of charges on income) the relevant amount shall be treated as if it were interest—

Sch 10 para 25(2)(a)

falling within section 338(3)(b), and

Sch 10 para 25(2)(b)

paid by the company in the accounting period in which the redemption occurs (and not as mentioned in the words of section 338(3) which follow paragraph (b)).

Sch 10 para 25(3)

In this paragraph “the relevant amount” means so much of the amount paid on the redemption as exceeds the issue price of the security.

Sch 10

Amendments

Sch 10 para 26

Sch 10 para 26(1)

Schedule 4 to the Taxes Act 1988 (deep discount securities) shall be amended as follows.

Sch 10 para 26(2)

In paragraph 1 (interpretation) the following sub-paragraph shall be inserted after sub-paragraph (1)—

Sch 10 para 26(3)

The following shall be inserted after paragraph 20—

Sch 10 para 27

Sch 10 para 27(1)

Schedule 11 to the Finance Act 1989 (deep gain securities) shall be amended as follows.

Sch 10 para 27(2)

In paragraph 4 (meaning of transfer etc.) the following sub-paragraph shall be inserted after sub-paragraph (2)—

Sch 10 para 27(3)

The following shall be inserted after paragraph 22—

Sch 10 para 28 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Sch 10

Application of Schedule

Sch 10 para 29

Sch 10 para 29(1)

The amendment made by paragraph 27(2) above shall be deemed always to have had effect.

Sch 10 para 29(2)

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Sch 10 para 29(3)

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Sch 10 para 29(4)

Subject to sub-paragraphs (1) to (3) above, this Schedule shall be deemed to have come into force on 9th June 1989.

Sch 11

European Economic Interest Groupings

Sch 11 para 1

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Sch 11 para 2

After section 12 of the Taxes Management Act 1970 there shall be inserted—

Sch 11 para 3

Sch 11 para 3(1)

After section 98A of the Taxes Management Act 1970 there shall be inserted—

Sch 11 para 3(2)

In section 100(2) of that Act (penalties which are imposed by Commissioners), after paragraph (d) there shall be inserted

Sch 11 para 4

Sch 11 para 4(1)

At the end of section 36 of the Taxes Management Act 1970 (extension of time for assessment in case of fraudulent or negligent conduct), there shall be added—

Sch 11 para 4(2)

At the end of section 40 of that Act (extension of time for assessment in case of fraudulent or negligent conduct of person who has died), there shall be added—

Sch 11 para 5

This Schedule shall be deemed to have come into force on 1st July 1989.

Sch 12

Broadcasting: Transfer of Undertakings of Independent Broadcasting Authority and Cable Authority

Sch 12 para 1

Sch 12 para 1(1)

Subject to sub-paragraph (2), the following provisions shall apply for the purposes of the Corporation Tax Acts, namely—

Sch 12 para 1(1)(a)

the part of the trade carried on by the IBA which is transferred to the nominated company under the Broadcasting Act 1990 (“the principal Act”) shall be treated as having been, at the time when it began to be carried on by the IBA and at all times since that time, a separate trade carried on by that company;

Sch 12 para 1(1)(b)

the trade carried on by that company after the transfer date shall be treated as the same trade as that which, by virtue of paragraph (a) above, it is treated as having carried on before that date;

Sch 12 para 1(1)(c)

all property, rights and liabilities of the IBA which are transferred under the principal Act to that company shall be treated as having been, at the time when they became vested in the IBA and at all times since that time, property, rights and liabilities of that company; and

Sch 12 para 1(1)(d)

anything done by the IBA in relation to any such property, rights and liabilities as are mentioned in paragraph (c) above shall be deemed to have been done by that company.

Sch 12 para 1(2)

There shall be apportioned between the IBA and the nominated company—in such manner as is just and reasonable having regard—

Sch 12 para 1(2)(a)

the unallowed tax losses of the IBA, and

Sch 12 para 1(2)(b)

any expenditure which they have incurred before the transfer date and by reference to which capital allowances may be made,

Sch 12 para 1(2)(i)

to the extent to which such losses and expenditure are attributable to the part of the trade carried on by them which is transferred to that company under the principal Act, and

Sch 12 para 1(2)(ii)

as respects the apportionment of such expenditure, to the division of their assets between the relevant transferees which is effected under that Act.

Sch 12 para 1(3)

In this paragraph—“the IBA’s final accounting period” means the last complete accounting period of the IBA ending before the transfer date;“unallowed tax losses” means losses, allowances or amounts which, as at the end of the IBA’s final accounting period, are tax losses within the meaning given by section 400(2) of the Taxes Act 1988, excluding losses which are allowable capital losses within the meaning of paragraph 6 below.

Sch 12 para 1(4)

This paragraph shall have effect in relation to accounting periods beginning after the IBA’s final accounting period.

Sch 12 para 2

Sch 12 para 2(1)

For the purposes of the 108 of the Taxation of Chargeable Gains Act 1992 the transfer under the principal Act of any asset from the IBA to the Commission or the Radio Authority shall be deemed to be for a consideration such that no gain or loss accrues to the IBA; and Schedule 2 to that Act (assets held on 6th April 1965) shall have effect in relation to an asset so transferred as if the acquisition or provision of it by the IBA had been the acquisition or provision of it by the Commission or (as the case may be) by the Authority.

Sch 12 para 2(2)

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Sch 12 para 2(3)

Where the benefit of any debt in relation to which the IBA are, for the purposes of section 251 of the 1992 Act (debts), the original creditor is transferred under the principal Act to the Commission or the Radio Authority, the Commission or (as the case may be) the Radio Authority shall be treated for those purposes as the original creditor in relation to the debt in place of the IBA.

Sch 12 para 3

Sch 12 para 3(1)

For the purposes of the 1979 Act the disposal under the principal Act of any relevant asset by the IBA to a DBS programme contractor shall be deemed to be for a consideration such that no gain or loss accrues to the IBA.

Sch 12 para 3(2)

In this paragraph—

Sch 12 para 3(2)(a)

“relevant asset” means any equipment or other asset (of whatever description) which has been used or held by the IBA in connection with the transmission of DBS services; and

Sch 12 para 3(2)(b)

“DBS programme contractor” and “DBS service” have the meaning given by section 37(3) of the Cable and Broadcasting Act 1984.

Sch 12 para 4

For the purposes of the 1992 Act the transfer by the principal Act of any asset from the Cable Authority the Commission shall be deemed to be for a consideration such that no gain or loss accrues to that Authority.

Sch 12 para 5

Sch 12 para 5(1)

For the purposes of the 1992 Act the transfer by the principal Act of shares in the Channel 4 company from the Commission to the Channel Four Television Corporation shall be deemed to be for a consideration such that no gain or loss accrues to the Commission.

Sch 12 para 5(2)

In sub-paragraph (1) “the Channel 4 company” means the body corporate referred to in section 12(2) of the Broadcasting Act 1981.

Sch 12 para 6

Sch 12 para 6(1)

The unallowed capital losses of the IBA shall be apportioned between the relevant transferees in such manner as is just and reasonable having regard to the purposes, or principal purposes, for which the relevant assets were respectively used or held by the IBA and the activities which are to be carried on by those transferees respectively as from the transfer date.

Sch 12 para 6(2)

Any unallowed capital losses of the IBA which are apportioned to one of the relevant transferees under sub-paragraph (1) shall be treated as allowable capital losses accruing to that transferee on the disposal of an asset on the transfer date.

Sch 12 para 6(3)

In this paragraph—“allowable capital losses” means losses which are allowable for the purposes of the 1992 Act;“relevant assets”, in relation to unallowed capital losses of the IBA, means the assets on whose disposal by the IBA those losses accrued;“unallowed capital losses”, in relation to the IBA, means allowable capital losses which have accrued to the IBA before the transfer date, in so far as they have not been allowed as deductions from chargeable gains.

Sch 12 para 7

Where the IBA have before the transfer date disposed of (or of their interest in) any assets used, throughout the period of ownership, wholly or partly for the purposes of the part of their trade transferred to the nominated company under the principal Act, sections 152 to 156 of the 1992 Act (roll-over relief on replacement of business assets) shall have effect in relation to that disposal as if the IBA and the nominated company were the same person.

Sch 12 para 8

Sch 12 para 8(1)

This paragraph applies where any apportionment or other matter arising under the foregoing provisions of this Schedule appears to be material as respects the liability to tax (for whatever period) of two or more relevant transferees.

Sch 12 para 8(2)

Any question which arises as to the manner in which the apportionment is to be made or the matter is to be dealt with shall be determined, for the purposes of the tax of both or all of the relevant transferees concerned—

Sch 12 para 8(2)(a)

in a case where the same body of General Commissioners have jurisdiction with respect to both or all of those transferees, by those Commissioners, unless those transferees agree that it shall be determined by the Special Commissioners;

Sch 12 para 8(2)(b)

in a case where different bodies of Commissioners have jurisdiction with respect to those transferees, by such of those bodies as the Board may direct, unless those transferees agree that it shall be determined by the Special Commissioners; and

Sch 12 para 8(2)(c)

in any other case, by the Special Commissioners.

Sch 12 para 8(3)

The Commissioners by whom the question falls to be determined shall make the determination in like manner as if it were an appeal except that both or all of the relevant transferees concerned shall be entitled to appear and be heard by the Commissioners or to make representations to them in writing.

Sch 12 para 9

Sch 12 para 9(1)

Any share issued by the nominated company to the Secretary of State in pursuance of the principal Act shall be treated for the purposes of the Corporation Tax Acts as if it had been issued wholly in consideration of a subscription paid to that company of an amount equal to the nominal value of the share.

Sch 12 para 9(2)

Any debenture issued by the nominated company to the Secretary of State in pursuance of the principal Act shall be treated for the purposes of the Corporation Tax Acts as if it had been issued—

Sch 12 para 9(2)(a)

wholly in consideration of a loan made to that company of an amount equal to the principal sum payable under the debenture; and

Sch 12 para 9(2)(b)

wholly and exclusively for the purposes of the trade carried on by that company.

Sch 12 para 10

Sch 12 para 10(1)

In this Schedule—“the 1992 Act” means the Taxation of Chargeable Gains Act 1992“the Commission” means the Independent Television Commission;“the IBA” means the Independent Broadcasting Authority;“the nominated company” and “the transfer date” have the same meaning as in the provisions of the principal Act relating to the transfer of the undertakings of the IBA and the Cable Authority;“the principal Act” means the Broadcasting Act 1990;“the relevant transferees” means the Commission, the Radio Authority and the nominated company.

Sch 12 para 10(2)

References in this Schedule to things transferred under the principal Act are references to things transferred in accordance with a scheme made under that Act.

Sch 13

Capital Allowances: Miscellaneous Amendments

Sch 13 para 1

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Sch 13 para 2

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Sch 13 para 3

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Sch 13 para 4

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Sch 13 para 5

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Sch 13 para 6

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Sch 13 para 7

Sch 13 para 7(1)

In section 832(1) of the Taxes Act 1988, in the definition of “the Capital Allowances Acts”, the words “, but excluding Part III of that Act” shall be omitted.

Sch 13 para 7(2)

This paragraph shall apply for chargeable periods beginning on or after 6th April 1990.

Sch 14

Amendments Correcting Errors in the Taxes Act 1988

Sch 14

Amendments of the Taxes Act 1988

Sch 14 para 1

The Taxes Act 1988 shall have effect, and shall be deemed always to have had effect, subject to the amendments made by this Part of this Schedule.

Sch 14 para 2

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Sch 14 para 3

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Sch 14 para 4

Sch 14 para 4(1)

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Sch 14 para 4(2)

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Sch 14 para 5

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Sch 14 para 6

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Sch 14 para 7

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Sch 14 para 8

In section 478(3), for the words “section (2)” there shall be substituted the words “ subsection (2) ”.

Sch 14 para 9

In section 751(1)(a), for the words “the persons” there shall be substituted the word “ persons ”.

Sch 14 para 10

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Sch 14 para 11

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Sch 14 para 12

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Sch 14 para 13

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Sch 14

Amendments of Other Enactments

Sch 14 para 14

In section 31(3) of the Taxes Management Act 1970, for the words “Part XV or XVI” there shall be substituted the words “ any of sections 660 to 685 and 695 to 702 ”.

Sch 14 para 15

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Sch 14 para 16

In paragraph 5(2) of Schedule 3 to the Oil Taxation Act 1975, for the words “section 17 of this Act” and the words “the said section 17” there shall be substituted the words “ section 500 of the Taxes Act ”.

Sch 14 para 17

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Sch 14 para 18

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Sch 14 para 19

Sch 14 para 19(1)

Subject to the following provisions of this paragraph, the amendments made by this Part of this Schedule shall be treated for the purposes of their commencement as if they had been made by the Taxes Act 1988.

Sch 14 para 19(2)

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Sch 14 para 19(3)

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Sch 14 para 19(4)

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Sch 15

Sch 16

Sch 17

Sch 17 para 1

The Capital Allowances Act 1990 shall be amended as follows.

Sch 17 para 2

In section 1 (initial allowances: enterprise zones) in subsection (5) the words “as it applies for income tax purposes” and the words from “and” to the end shall be omitted.

Sch 17 para 3

Sch 17 para 3(1)

Section 22 (first-year allowances: transitional relief for regional projects) shall be amended as follows.

Sch 17 para 3(2)

The following subsection shall be substituted for subsection (7)—

Sch 17 para 3(3)

In subsection (8) the words “disclaimer or” shall be omitted.

Sch 17 para 3(4)

Subsection (9) shall cease to have effect.

Sch 17 para 4

Sch 17 para 4(1)

Section 23 (information relating to first-year allowances) shall be amended as follows.

Sch 17 para 4(2)

In subsection (1) the words “by a person other than a company”, the words from “, and a” to “an allowance,” and, in paragraphs (b) and (c), the words “or deduction” shall be omitted.

Sch 17 para 4(3)

In subsection (2) the words “other than a company” and the words from “, or a” to “company,” shall be omitted.

Sch 17 para 5

Sch 17 para 5(1)

Section 24 (writing-down allowances and balancing adjustments) shall be amended as follows.

Sch 17 para 5(2)

In subsection (3) the words “in connection with a trade carried on by a person other than a company” shall be omitted.

Sch 17 para 5(3)

Subsection (4) shall cease to have effect.

Sch 17 para 6

Sch 17 para 6(1)

Section 25 (qualifying expenditure) shall be amended as follows.

Sch 17 para 6(2)

In subsection (1)(a)(ii) the words from “in the case of a person” to “of a company” shall be omitted.

Sch 17 para 6(3)

Subsection (2) shall be omitted.

Sch 17 para 6(4)

In subsection (3) the words “, but not being a company,” shall be omitted.

Sch 17 para 6(5)

In subsection (4)—

Sch 17 para 6(5)(a)

in paragraph (a) the words “(whether a company or not)” shall be omitted; and

Sch 17 para 6(5)(b)

in paragraph (b) the words “, in the case of a person other than a company,” shall be omitted.

Sch 17 para 7

In section 30 (first-year allowances) in subsection (1)(a) the words “or, in the case of a company, disclaim it” shall be omitted.

Sch 17 para 8

In section 31 (writing-down allowances) the following subsection shall be substituted for subsection (6)—

Sch 17 para 9

In section 41 (writing-down allowances) in subsection (3) the words “or is disclaimed under subsection (4) of that section”, the words “or under subsection (4)” and the words “or as disclaimed” shall be omitted.

Sch 17 para 10

In section 46 (recovery of excess relief: new expenditure) in subsection (6) the words “or was disclaimed” shall be omitted.

Sch 17 para 11

In section 47 (recovery of excess relief: old expenditure) in subsection (6)(a) the words “or was disclaimed” shall be omitted.

Sch 17 para 12

In section 48 (information relating to allowances made in respect of new expenditure) in subsection (1) the words “by a person other than a company” and the words from “and a” to “allowance” shall be omitted.

Sch 17 para 13

In section 49 (information relating to allowances made in respect of old expenditure) in subsection (2) the words “other than a company” and the words from “, or a” to “company,” shall be omitted.

Sch 17 para 14

In section 79 (effect of use partly for trade etc. and partly for other purposes) in subsection (6) the words “or is disclaimed under subsection (4) of that section”, the words “or (4)” and the words “or as disclaimed” shall be omitted.

Sch 17 para 15

In section 80 (effect of subsidies towards wear and tear) in subsection (6) the words “or is disclaimed under subsection (4) of that section”, the words “or (4)” and the words “or as disclaimed” shall be omitted.

Sch 18

Definition of “Local Authority”

Sch 18 para 1

In section 74(4) of the Finance Act 1952 for “519” there shall be substituted “ 842A ”.

Sch 18 para 2

Section 52 of the Finance Act 1974 shall cease to have effect.

Sch 18 para 3

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Sch 18 para 4

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Sch 18 para 5

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Sch 19

REPEALS

Sch 19

CUSTOMS AND EXCISE

Sch 19

VEHICLES EXCISE DUTY

Sch 19

VALUE ADDED TAX

Sch 19

INCOME TAX, CORPORATION TAX AND CAPITAL GAINS TAX

Sch 19

MANAGEMENT

Sch 19

STAMP DUTY

Sch 19

STAMP DUTY RESERVE TAX

Sch 19

NATIONAL SAVINGS

Rates of duty

Other provisions

Income tax rates and allowances

Corporation tax rates

Benefits in kind

Mileage allowances

Charities

Savings

Employee share ownership trusts

Insurance companies and friendly societies

Unit and investment trusts etc.

Securities

Oil industry

International

Miscellaneous

Returns and information

Corporation tax determinations

Claims by companies

Miscellaneous

Repeals

Paired shares

International organisations

Ports levy

Petroleum revenue tax

Miscellaneous

General

Introduction

Building societies

Deposit-takers

General

Management

Transitional provision

General

Exemption for certain linked assets

Replacement of assets

Supplementary

Capital gains

Accounting periods

Expenses of management and losses

Capital allowances

Transfer to friendly society

Commencement

Qualifying provision for redemption

Qualifying convertible securities

Events after issue

Securities becoming subject to later options

Other later events in relation to securities

Deep gain

Income period

Redemption period

Yield to redemption

Transfer etc.

Miscellaneous

The charge

Chargeable amount

Total income element

Income elements

Death

Market value

Underwriters

Trustees

Receipts in United Kingdom

Charities

Retirement benefit schemes

Stock lending

Identification of securities

(1) Deep discount securities

(2) Deep gain securities

(3) Corporate bonds

Taxation

Management

Commencement

Transfer of IBA’s transmission activities to nominated company: corporation tax

Transfer of IBA’s assets to Commission and Radio Authority: chargeable gains

Disposal by IBA of DBS assets to DBS programme contractor: chargeable gains

Transfer of Cable Authority’s assets to Commission: chargeable gains

Transfer of shares from Commission to Channel 4 company: chargeable gains

Apportionment of unallowed capital losses between relevant transferees

Roll-over relief in connection with nominated company

Disputes as to apportionments etc.