Finance Act 1963

Part I — Customs and Excise

Amendments as to surcharges and rebates in respect of revenue duties

1

Information as to gaming

2

Further reductions of customs duties on E.F.T.A. goods

3

Matches

4

Repeal of television duty

5

Brewers not for sale

6

Tobacco dealers

7

Amendments as to samples of hydrocarbon oils

8

Pipe-lines

9

Part II

CHAPTER I — Rates of Tax, and Changes in Personal Reliefs

Charge of income tax for 1963-64

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Income tax for the year 1963-64 shall be charged at the standard rate of 7s. 9d. in the pound, and in the case of an individual whose total income exceeds £2,000 at such higher rates in respect of the excess as Parliament may hereafter determine.

Surtax rates for 1962-63

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Income tax for the year 1962-63 shall be charged, in the case of an individual whose total income exceeded £2,000, at the same higher rates in respect of the excess as were charged for the year 1961-62.

Amendments to Part VIII of Act of 1952 (personal etc reliefs)

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• (1) In section 210 of the Act of 1952 (personal reliefs), in paragraph (a) of subsection (1) (married) for the reference to £240 (inserted by section 2(3) of the Finance Act 1955) there shall be substituted a reference to £320, and in paragraph (b) of that subsection (single) for the reference to £140 (inserted as aforesaid) there shall be substituted a reference to £200; and in subsection (2) of the said section 210 (wife's earned income relief) for the reference to £140 (the maximum amount of that relief) there shall be substituted a reference to £200.

• (2) In section 211(2) and (3) of the Act of 1952 (old age relief) as amended by section 14(2) of the Finance Act 1958, for the references to £800 (maximum income qualifying for full relief) there shall be substituted references to £900.

• (3) In section 212 of the Act of 1952 (child relief), in the subsection (1A) inserted by section 12(3) of the Finance Act 1957, for the references to £150, £125, and £100 (being the amounts appropriate to children over sixteen, between eleven and sixteen, and not over eleven) there shall be substituted respectively references to £165, £140, and £115; and in subsection (4) of that section (maximum income of child if claimant not to be disqualified for relief) for the reference to £100 (inserted by section 12(4) of the Finance Act 1957) there shall be substituted a reference to £115.

• (4) The amounts of £230 and £155 (relating to the total income of the dependent relative) specified, for the purposes of section 216 of the Act of 1952, by section 15 of the Finance Act 1961 shall each be increased by £25.

• (5) The following Table shall be substituted for the Table set out in section 220(1) of the Act of 1952 (reduced rate relief) as amended by section 2(7) of the Finance Act 1955:—

Where the relevant amount—
does not exceed £100	a deduction equal to 3s. 9d. for each pound of the relevant amount.
does exceed £100, but does not exceed £300	the same deduction as if the relevant amount were £100, plus Is. 9d. for each pound of the relevant amount in excess of £100.
exceeds £300	the same deduction as if the relevant amount were £300.

• (6) In section 15 of the Finance Act 1952 (small income relief), as amended by section 8(1) of the Finance Act 1962, for the reference in subsection (1) to £400 (maximum income for full relief) and the corresponding references in subsection (2) there shall be substituted references to £450; and in the said subsection (2), as so amended, for the reference to £550 (the limit for marginal relief) there shall be substituted a reference to £680.

• (7) In section 13 of the Finance Act 1957 (relief for persons over sixty-five with small incomes) in subsection (1)(a)(i), as amended by section 8(2) of the Finance Act 1962, for the reference to £300 (maximum income qualifying for full relief to a single man) there shall be substituted a reference to £325, and in subsection (1)(a)(ii), as so amended, for the reference to £480 (maximum income for full relief to a married man) there shall be substituted a reference to £520; and the like substitutions shall be made in paragraph (b) of that subsection (marginal relief).

• (8) Section 19 of the Finance Act 1960 (relief for National Insurance contributions), as amended by section 16 of the Finance Act 1961, shall have effect as if for the Table set out in Part I of Schedule 3 to the said Act of 1960 there were substituted the Table set out in Schedule 3 to this Act, and as if in paragraph 2 of Part II of the said Schedule 3 to the Act of 1960 for references to £5, £18, and £8 there were substituted respectively references to £7, £22 and £10.

• (9) The amounts of tax deductible or repayable under section 157 (pay as you earn) of the Act of 1952 before the 6th July 1963 shall not be deemed to have been affected by the foregoing provisions of this section, but this subsection shall not prevent the resulting over-deductions or under-repayments from being adjusted subsequently by means of diminished deductions or increased repayments under that section or, if need be, by an assessment.

Child relief: amendments as to child's income

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Section 212 of the Act of 1952 (child relief) shall have effect for the year 1964-65 and subsequent years of assessment as if subsection (4) (which, as amended by section 12(3) of this Act, precludes the allowing of relief where the child's own income exceeds £115 a year, but in the proviso directs income from a scholarship or similar source to be disregarded) were amended by the substitution of the following for the words preceding the proviso:—

(4) In the case of a child who is entitled in his own right to an income exceeding £115 a year the appropriate amount for the child shall be reduced by the amount of the excess, and accordingly no relief shall be allowed under this section where the excess is equal to or greater than the amount which apart from this subsection would be the appropriate amount for the child:

,

and as if in the subsection (1A) inserted by section 12(3) of the Finance Act 1957 there were inserted, after the words " assessment, and ", the words " subject to subsection (4) of this section ".

CHAPTER II — Abolition of Charge on Owner-Occupiers, Taxation of Rents and Connected Provisions

Abolition of Schedule A tax, and taxation of rents, etc.

Abolition of charge on owner-occupiers

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• (1) For the purpose of removing from the charge to income tax the occupier's beneficial interest in land in the United Kingdom.—

• (a) Schedule A shall cease to have effect; and

• (b) the provisions in that behalf of this Chapter shall have effect for charging under a new Case of Schedule D rents and certain other receipts from such land.

• (2) The foregoing subsection has effect, as respects the year 1963-64, subject to the transitional provisions hereinafter contained.

Charge to income tax of profits and gains arising from land

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• (1) Without prejudice to any other provisions of the Income Tax Acts directing income tax to be charged under Schedule D, tax under that Schedule shall be charged, subject to and in accordance with the provisions of this Act, on the annual profits or gains arising in respect of any such rents or receipts as follow, that is to say—

• (a) rents under leases of land in the United Kingdom;

• (b) rentcharges, ground annuals and feu duties, and any other annual payments reserved in respect of, or charged on or issuing out of, such land;

• (c) other receipts arising to a person from, or by virtue of, his ownership of an estate or interest in or right over such land or any incorporeal hereditament or incorporeal heritable subject in the United Kingdom:

Provided that the said rents or receipts do not include yearly interest or any payment charged to tax under section 180 (mineral rents and royalties, etc.) of the Act of 1952.

• (2) Tax charged under Schedule D by virtue of this section shall be charged under a new Case VIII of that Schedule (hereinafter referred to as " Case VIII"), and shall be charged by reference to the rents or receipts to which a person becomes entitled in the year of assessment.

• (3) In computing for the purposes of Case VIII the profits or gains arising to a person in any year of assessment, such deductions shall be made from any rents or receipts to which he becomes entitled in the year as are provided for by Schedule 4 to this Act.

• (4) Notwithstanding anything in subsection (2) of this section, where rent is payable under a lease under which the tenant is entitled to the use of furniture, and tax in respect of the payment for its use is chargeable under Case VI of Schedule D, tax in respect of the rent shall be charged under Case VI of Schedule D unless the landlord, by notice in writing to the surveyor given within two years after the end of the year of assessment, requires that this provision shall not apply.

Where notice is given under this subsection any adjustment of the liability to tax of the person giving the notice which is required in consequence thereof may be made by an additional assessment or by repayment or otherwise, as the case may require.

Assessment and collection of tax under Case VIII

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• (1) The profits or gains arising to a person for any year of assessment which are assessable to tax under Case VIII may either be assessed in one assessment—

• (a) in a division in which they would be assessable apart from this subsection, or

• (b) in a division in which are situated all or any of the premises from which profits or gains so assessable may arise to him for the year of assessment,

or may be assessed in one or more separate assessments in any division in which there are such premises, or may be assessed partly in the one way and partly in the other.

• (2) Where an assessment to tax under Case VIII for any year of assessment is made in that year.—

• (a) it shall be made on the basis that all sources of income and all amounts relevant in computing profits or gains are the same as for the last preceding year of assessment, and

• (b) tax shall be leviable accordingly, but any necessary adjustments shall be made after the end of the year, whether by way of additional assessment, repayment of tax or otherwise, to secure that tax is charged by reference to the rents or receipts to which the person assessed becomes entitled in the year of assessment:

Provided that if before the 1st January in any year a person delivers a statement in writing to the surveyor—

• (i) showing that since the beginning of the last preceding year of assessment he has ceased to possess one or more sources of income chargeable under Case VIII; and

• (ii) giving the aggregate of the rents and receipts relevant for purposes of Case VIII to which he has become or is likely to become entitled in the current year; and

• (iii) showing that that aggregate is less than the aggregate of such rents and receipts to which he became entitled in the last preceding year, and that it would not have been less if he had not ceased to possess the said source or sources,

then, if the surveyor is satisfied as to the correctness of the declaration, an assessment made on that person in the current year shall be made on an amount which bears to the amount arrived at under paragraph (a) of this subsection the same proportion as the said aggregate for the current year bears to the said aggregate for the last preceding year, and paragraph (b) of this subsection shall apply accordingly.

• (3) Any additional assessment under Case VIII may be made and signed by the surveyor.

• (4) Where any tax under Case VIII is charged in respect of profits or gains arising from any land to a person who is not the occupier of the land, but the tax is not paid by that person (in this subsection referred to as " the person in default "), it may be recovered in accordance with the following provisions:—

• (a) subject to the following paragraph, the collector may from time to time by notice in writing, in such form as may be prescribed by the Commissioners of Inland Revenue, require any lessee of the land or any part thereof whose interest is derived (directly or indirectly) from that held by the person in default (in this subsection referred to as " a derivative lessee ") to make to him payment, on the date or dates specified in the notice, of such sum or sums as may be required to satisfy the tax;

• (b) the sum demanded from a derivative lessee to be paid during any period shall not exceed the amount of the rent or other payments arising out of the land which becomes due from him at the end of the period and payable to the person in default or to another derivative lessee;

• (c) in default of payment by a derivative lessee of any amount duly demanded of him under this subsection, that amount may be recovered from him in like manner as if he had been charged with tax of that amount;

• (d) where any sum on account of tax has been collected from a derivative lessee in pursuance of this subsection, he may deduct that sum from any subsequent payment arising as aforesaid and payable to the person in default or to another derivative lessee, and shall be acquitted and discharged of the amount so deducted;

• (e) where under the foregoing paragraph, or under that paragraph as applied by this paragraph, a sum is deducted from an amount payable to another derivative lessee, that paragraph shall apply as if the sum had been collected from him under a demand made under this subsection by the collector, and where the amounts from which under that paragraph he is entitled to make deductions in respect of that sum during the following twelve months are less than that sum, he shall be entitled to recover from the Commissioners of Inland Revenue an amount equal to the difference, which shall be treated as reducing the tax recovered under this subsection.

• (5) Where any person (hereinafter referred to as " the agent") is in receipt of rents or receipts from land on behalf of another person (hereinafter referred to as " the principal"), and any tax under Case VIII charged on the principal has not been paid, the collector may by notice in writing, in such form as may be prescribed by the Commissioners of Inland Revenue, require the agent to pay to the collector in or towards the satisfaction of the tax any sums from time to time received by the agent on behalf of the principal on account of rents or receipts from any land (including any sums so received which are in his hands when the notice is given) until the liability in respect of the tax has been satisfied; and the agent shall pay all such sums over to the collector accordingly and the payment shall acquit and discharge him as against the person on whose behalf he received them.

If the agent fails to comply with the requirements of a notice duly served on him, he shall be liable to a penalty not exceeding fifty pounds for each failure, non-compliance as respects sums in his hands when the notice is given, or as respects any one payment subsequently received by him, being treated as a separate failure.

• (6) Section 369 of the Act of 1952 (taxation of non-residents in name of agent) shall not apply to tax on profits or gains chargeable to tax under Case VIII, or on any of the profits or gains chargeable under Case VI of Schedule D—

• (a) in a case falling within subsection (4) of the foregoing section, or

• (b) which arise under the terms of a lease, but to a person other than the landlord, or otherwise arise out of any disposition or contract such that if they arose to the person making it they would be chargeable under Case VIII,

where payment is made (whether in the United Kingdom or elsewhere) directly to a person whose usual place of abode is outside the United Kingdom, but section 170 of the Act of 1952 shall apply in relation to the payment as it applies to other payments being annual payments charged with tax under Schedule D and not payable out of profits or gains brought into charge to tax.

• (7) Where by virtue of the foregoing subsection the tax chargeable for any year of assessment on a person's profits or gains chargeable to tax under either or both of the Cases therein mentioned would apart from this subsection be greater than the tax which would be chargeable thereon apart from subsection (2) of this section, then on a claim in that behalf being made relief shall be given from the excess, whether by repayment or otherwise.

Relief for rent, etc. not paid

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• (1) Where on a claim in that behalf a person proves—

• (a) that he has not received an amount which he was entitled to receive in respect of any rents or receipts on the profits or gains arising from which he would be chargeable under Case VIII, and

• (b) if the non-receipt of the said amount was attributable to the default of the person by whom it was payable, that the claimant has taken any reasonable steps available to him to enforce payment,

• (c) if the claimant waived payment of the said amount, that the waiver was made without consideration and was reasonably made in order to avoid hardship,

the claimant shall be treated for tax purposes for all relevant years of assessment as if he had not been entitled to the said amount, and such adjustment shall be made, by repayment or otherwise, as the case may require; but if all or any part of the said amount is subsequently received, the claimant or, if he is dead, his executors or administrators shall not later than six months thereafter give notice in writing of its receipt to the surveyor, and such re-adjustment of liability to tax (for all relevant years of assessment) shall be made as may be necessary and may be made at any time at which it could be made if it related only to tax for the year of assessment in which the amount, or the part of the amount, is received.

• (2) The foregoing subsection shall be deemed to be included in the third column of Schedule 6 to the Finance Act 1960 (relating to penalties on persons failing to furnish particulars or furnishing false particulars).

Returns, etc. for purposes of Case VIII

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• (1) For the purpose of obtaining particulars of profits or gains chargeable to tax under Case VIII, the surveyor may by notice in writing require—