Finance Act 1963

• (b) in computing, for the purposes of subsection (3) or (4) of this section, the aggregate of allowances for previous years, those allowances shall be treated as reduced by the amount on which any balancing charge under paragraph (a) of the said subsection (4) has been made in respect of the expenditure.

• (8) Allowances or charges falling to be made under this section to or on any person shall be made to or on him in charging the profits or gains of his trade.

• (9) Where a person (in this subsection referred to as " the transferee ") acquires a mineral asset from another person (in this subsection referred to as " the transferor "), and the transferee is a body of persons over whom the transferor has control, or the transferor is a body of persons over whom the transferee has control, or both the transferee and the transferor are bodies of persons and some other person has control over both of them, the capital expenditure incurred by the transferee on the acquisition of the asset shall be taken for the purposes of this section (including this subsection) not to exceed the capital expenditure incurred by the transferor on its acquisition by him or, where the asset consists of an interest or right granted by the transferor, so much of the capital expenditure so incurred by the transferor as, on a just apportionment, is referable to that interest or right; and the expenditure incurred by the transferee shall where necessary be treated as reduced accordingly.

• (10) Where in the basis period for any year of assessment a person, having previously incurred capital expenditure on the acquisition of a mineral asset the acquisition of which entitled him to work a source, incurs for the purposes of the trade capital expenditure on the acquisition of another mineral asset the acquisition of which entitles him to work the same source, this section shall apply as respects that year and subsequent years of assessment as if the assets were one mineral asset capital expenditure on the acquisition of which was incurred by him when he incurred the first-mentioned expenditure and was of an amount equal to the aggregate of that expenditure and the further expenditure:

Provided that where the first-mentioned expenditure was incurred before the 4th April 1963 and the further expenditure on or after that date—

• (a) no greater allowances shall for the purpose of subsection (3) of this section be deemed by reason of this subsection to have been made before that date;

• (b) the cost of acquiring output got before that date, as computed under subsection (5) of this section, shall not by reason of this subsection be treated as increased.

If the asset to which the further expenditure relates extends to mineral deposits or land not included in the asset to which the first-mentioned expenditure relates, so much of it as so extends shall be treated for the purposes of this section as a separate mineral asset, and the further expenditure shall be apportioned between the assets as may be just.

• (11) References in this section to expenditure on the acquisition of an asset do not include—

• (a) expenditure to which Chapter III of Part X of the Act of 1952 applies; or

• (b) expenditure on machinery or plant, or on any asset which has been treated for any year of assessment as machinery or plant; or

• (c) expenditure on any building or structure,

and where expenditure was incurred on the acquisition of an asset in respect of which, for years of assessment previous to a year for which he first becomes entitled in respect of the expenditure to an allowance under this section, the person incurring the expenditure has been allowed any deductions under Schedule 9 to this Act, the expenditure shall be treated for the purposes of this section as reduced by so much of those deductions as, if he had been entitled to an allowance under this section for earlier years, would have been excluded by paragraph 5 of that Schedule.

• (12) In this section—

• " mineral asset " means any mineral deposits or land comprising mineral deposits, or any interest in or right over such deposits or land ;

• " output " in relation to a source, means mineral deposits lifted or extracted from the source ;

• " royalty value " in relation to any output from a source means the amount of the royalties that would be payable on that output if the person working the source were a lessee under a lease, for a term expiring immediately after that output was produced, granted to him at the date when the expenditure in question was incurred and providing for the payment of such royalties on output from the source as might reasonably have been expected to be provided for by such a lease, but reduced by the amount of any royalties actually payable in respect of that output.

• (13) Subject to the provisions of this section, the Income Tax Acts shall have effect, and this section shall be construed, as if it were contained in Part X of the Act of 1952:

Provided that the provisions of the said Part X shall apply in relation to this section subject to the following modifications, that is to say—

• (a) section 323(1) shall be deemed to require a claim for an allowance to be made in such form and accompanied by such plans and other particulars as the Commissioners of Inland Revenue may direct;

• (b) section 325(2) (meaning of " basis period ") shall apply for the purposes of subsection (2) of this section with the omission of the proviso ;

• (c) in section 326(1) (apportionment of the consideration on sales etc.) the reference to expenditure incurred on the provision or the purchase of property shall be deemed to include a reference to expenditure on the acquisition of a mineral asset;

• (d) section 327 and Schedule 14 shall not apply, so how ever that paragraph 2 of that Schedule (but not paragraph 4) shall apply for determining the amount of any capital sum accruing to a person by virtue of his acquisition of a mineral asset.

• (14) The foregoing provisions of this section shall have effect only for the year 1963-64 and subsequent years of assessment but for that purpose shall apply in relation to expenditure incurred and other things done before as well as after the beginning of the year 1963-64.

Annual allowances for new machinery and plant in development districts

38

• (1) Subject to the provisions of this section, annual allowances under Chapter II of Part X of the Act of 1952 in respect of capital expenditure incurred after the 3rd April 1963 on the provision of new machinery or plant (not being mobile equipment) for use in a development district for industrial purposes shall be computed in accordance with section 281 (normal method of computation) of the Act of 1952 as if, instead of requiring an annual allowance to be five-fourths of the percentage therein specified of the relevant capital amount, that section required it to be so much of that amount as is specified by the person to whom the allowance is to be made in making his claim for the allowance; and accordingly (but subject as aforesaid) neither section 35 of this Act nor section 282 (alternative method of computation), 284 (special method for mines, etc.) or 285 (adjustments in cases of abnormal use) of the Act of 1952 shall apply in relation to such allowances.

• (2) If, during the basis period for any year of assessment and within the three years beginning when it was first put into use, any machinery or plant is used—

• (a) in a place which is not included in any development district, or

• (b) for purposes other than industrial purposes, or

• (c) in a building or structure prevented by section 271(3) (dwelling-houses, retail shops, showrooms, hotels and offices) of the Act of 1952 from being an industrial building or structure within the meaning of Chapter I of Part X of that Act,

the foregoing subsection shall not apply to the annual allowance in respect of the machinery or plant for that or any subsequent year of assessment and shall be deemed not to have applied to the annual allowance in respect thereof for any previous year of assessment.

• (3) Subsection (1) of this section shall not apply to annual allowances falling to be made to a person in respect of expenditure on the provision of machinery or plant treated as incurred by him by virtue of section 299 of the Act of 1952 (allowances to lessees) unless the contract of letting provides that he shall or may become the owner of the machinery or plant on the performance of the contract; and where the contract so provides, but without becoming the owner of the machinery or plant he ceases to be entitled (otherwise than on his death) to the benefit of the contract so far as it relates to the machinery or plant, the said subsection (1) shall be deemed not to have applied to annual allowances falling to be made to him in respect of the machinery or plant.

• (4) Where subsection (1) of this section is to be deemed not to have applied to annual allowances for any year of assessment, there shall be made all such additional assessments and adjustments of assessments as may be necessary.

• (5) A district shall be treated as being a development district within the meaning of this section—

• (a) if and so long as, being within Great Britain, it is for the purposes of the Local Employment Act 1960 a development district as defined by section 1(2) of that Act, or

• (b) if it is within Northern Ireland,

and a certificate given by a person authorised in that behalf by the President of the Board of Trade and stating that at the time or during the period specified in the certificate a place in Great Britain was or was not included in any development district shall be conclusive for the purposes of this section.

• (6) In relation to any new town outside a development district which draws or will draw its population mainly from the district, this section shall apply as if the new town were included in the district, and a certificate given by a person authorised in that behalf by the Minister of Housing and Local Government, or (where the new town is in Scotland) the Secretary of State, and stating whether or not a new town draws or will draw its population mainly from a specified district shall be conclusive for the purposes of this subsection.

• (7) Where a district in Great Britain ceases at any time to be a development district, this section shall apply in relation to the following machinery or plant as if the district had continued to be a development district, that is to say—

• (a) machinery or plant which at that time is within, and has before that time been used in, the district;

• (b) machinery or plant provided for use in the district under a contract entered into before that time ;

• (c) machinery or plant provided for use in the district under a contract entered into within two years after that time and in the case of which the following conditions are satisfied—

• (i) that it is for use in or about a building or structure provided for use for industrial purposes under a contract entered into after the 3rd April 1963, or is for use in conjunction with other machinery or plant so provided, and

• (ii) that its provision was required for the fulfilment of the purpose for which the building or structure or, as the case may be, the other machinery or plant was provided, and

• (iii) that contracts for the provision of a substantial proportion of the assets required for the fulfilment of that purpose had been entered into before the district ceased to be a development district.

• (8) In this section—

• " industrial purposes " means the purposes of a trade, or a part of a trade, which— is carried on in a mill, factory or other similar premises, or consists in the carrying on of a dock, water, electricity or hydraulic power undertaking (as defined by section 271(5) of the Act of 1952) or a gas, transport, inland navigation, tunnel or bridge undertaking, or consists in the manufacture of goods or materials or the subjection of goods or materials to any process, not being a process in the construction or erection of a building or structure, or consists in the storage— of goods or materials which are to be used in the manufacture of other goods or materials, or of goods or materials which are to be subjected, in the course of a trade, to any process, or of goods or materials which, having been manufactured or produced or subjected, in the course of a trade, to any process, have not yet been delivered to any purchaser, or of goods or materials on their arrival by sea or by air into any part of the United Kingdom, or consists in the working of any mine, oil well or other source of mineral deposits, or consists in the distribution of hydrocarbon oils by pipe-line;

• " mobile equipment " means machinery or plant having its own means of propulsion, or constructed or adapted for being towed, but does not include machinery or plant suitable for use only in or about a building or structure used for industrial purposes or any similar purposes or at a source of mineral deposits ;

• " new town " means an area designated under the New Towns Act 1946 as the site of a new town.

Annual allowances for new mining expenditure in development districts

39

• (1) Annual allowances under Chapter III (mines, oil wells, etc.) of Part X of the Act of 1952 in respect of capital expenditure incurred after the 3rd April 1963 on new machinery or plant provided for use or used in a development district, or on the construction of any works in a development district, shall, instead of being computed by applying the fraction specified in section 307 of the Act of 1952 to the residue of the expenditure (as defined by that section), be of an amount equal to so much of that residue as is specified by the person to whom an allowance is to be made in making his claim to the allowance, and subsection (3) of that section (adjustment where source ceases to be worked) shall not apply:

Provided that the foregoing provisions of this subsection shall not have effect in relation to annual allowances under the said Chapter III falling to be made to a person in respect of any expenditure if he so elects in making his claim to the first of those allowances.

• (2) Where a person incurs expenditure on new machinery or plant in connection with a source of mineral deposits, and the machinery or plant is later sold in circumstances such that the person acquiring it is by virtue of section 309(2) of the Act of 1952 deemed to have incurred expenditure in connection with the source, the expenditure so deemed to have been incurred by him shall, so far as it relates to the machinery or plant, be treated for the purposes of the foregoing subsection as capital expenditure on new machinery or plant incurred by him when the first-mentioned expenditure was incurred.

• (3) Subsections (5), (6) and (7) of the foregoing section shall apply for the purposes of this section as they apply for the purposes of that section, but so that the said subsection (7) shall apply as if references to machinery or plant included references to works expenditure on the construction of which is expenditure to which the said Chapter III applies, and as if, in the application of paragraph (c) of that subsection to such works, references to a building or structure were omitted.

Contributions to expenditure for treatment of trade effluents

40

• (1) Where a sewerage authority in the United Kingdom incurs expenditure on the provision of an asset to be used in the treatment of trade effluents, then, in relation to any contribution of a capital sum made to that expenditure, subsection (3) of section 332 of the Act of 1952 (by virtue of which, in a case where the person receiving a capital sum would, apart from subsection (1) of that section, qualify for capital allowances in respect of his expenditure, the contributor is treated for the purpose of investment, initial and annual allowances as if his contribution had been expenditure on an asset provided for the purposes of his trade) shall apply as if such allowances fell to be made to the sewerage authority in respect of the expenditure as apart from subsection (1) of that section would fall to be made if the asset were to be so used for the purposes of a trade carried on by the sewerage authority.

• (2) In this section—

• " sewerage authority " means a public body having power under any enactment relating to the public health to construct and maintain sewers ;

• " trade effluents " means liquid or other matter discharged into public sewers from premises occupied for the purposes of a trade.

• (3) This section shall apply only where the contribution was made, and the expenditure in question was incurred, after the 31st May 1963.

Motor cars: amendments as to capital allowances and deductions for hiring

41

• (1) In relation to initial and annual allowances and balancing allowances under Chapter II of Part )( of the Act of 1952 falling to be made for the year 1963-64 and subsequent years, the provisions of the six following subsections shall have effect in substitution for the provisions of subsections (2) to (6) of section 23 of the Finance Act 1961 (capital allowances for vehicles costing over two thousand pounds) in cases where that section would otherwise have applied.

• (2) The amount to be allowed by way of initial allowance for any one vehicle shall not exceed six hundred pounds (whether the allowance falls to be made by reference to lump sum expenditure or by reference to the amounts of instalments), the references in paragraph 3(2) of Schedule 14 to the Act of 1952 to seven-tenths of the limit of recharge on the seller having effect accordingly as references to the limit of recharge reduced by six hundred pounds.

• (3) The amount of an annual allowance shall not exceed five hundred pounds ; and—

• (a) where the amount of an annual allowance, if calculated in accordance with section 281 (normal method of calculating annual allowances) of the Act of 1952, would be reduced by the foregoing provisions of this subsection the allowance shall be so calculated ;

• (b) section 291 of that Act (annual allowances where previous use has not attracted full allowances) shall have effect as if at the end of subsection (1) thereof there were added " and in any case where the machinery or plant was not in fact used for the purposes of the trade in the first of those previous years (whether or not the trade was then being carried on) there shall be deemed to have been made to him for that year the maximum allowances permitted by subsections (2) and (3) of section 41 of the Finance Act 1963 ".

• (4) Where apart from this subsection a balancing allowance would fall to be made in respect of any vehicle, and the event giving rise to the allowance takes place within the basis period for a year of assessment as respects which the foregoing subsection would operate to reduce the amount of any annual allowance falling to be made in respect of the vehicle, or would so operate but for any provision of the Income Tax Acts (other than this section) reducing annual allowances.—

• (a) if the person to whom the balancing allowance would fall to be made proves that as respects the period during which the vehicle has been used for the purposes of his trade the amount (if any) falling to be made to him by way of annual allowances in respect of the vehicle is less than an amount at a rate of five hundred pounds a year, the amount of the balancing allowance shall not exceed the amount of the difference, increased, if any amount which could have been allowed by way of initial allowance was not claimed, by that amount;

• (b) in any other case no balancing allowance shall be made unless any amount which could have been allowed by way of initial allowance was not claimed, and if so the balancing allowance shall not exceed that amount.

• (5) It is hereby declared that the provisions of the Income Tax Acts (other than this section) which in special circumstances reduce initial or annual allowances, and balancing allowances, apply to allowances after modification by the foregoing provisions of this section ; and in particular—

• (a) the reference in section 286 of the Act of 1952 to an annual allowance computed in accordance with the preceding provisions of Chapter II of Part )( of that Act includes a reference to an annual allowance computed in accordance with those provisions and the foregoing provisions of this section;

• (b) where, in a case falling within section 293 or the proviso to section 294 of that Act (effect on balancing allowances of part-time use otherwise than for trade purposes, and of subsidies for wear and tear), it is just and reasonable that the foregoing subsection should apply with the substitution for the reference to five hundred pounds of a reference to a smaller amount, that subsection shall so apply, without prejudice to the determination in accordance with the said section 293 or the said proviso whether any balancing allowance falls to be made, or would fall to be made apart from the foregoing subsection.

• (6) Where under section 332(1) of the Act of 1952 any part of the expenditure incurred in the provision of a vehicle is to be treated as not having been incurred by a person, or under section 332(3) of that Act a person's contribution to such expenditure is to be treated as expenditure on the provision of a similar vehicle, the foregoing provisions of this section shall have the like effect as if for the references to six hundred and to five hundred pounds there were substituted references to sums which bear the same proportion thereto as the amount of expenditure which is to be treated as having been incurred by the person providing the vehicle, or as the case may be the amount of the contribution, bears to the whole expenditure incurred in the provision of the vehicle.

• (7) Section 296(1) of the Act of 1952 (optional treatment of balancing charge in certain cases of replacement) shall not have effect where the vehicle is the new plant referred to in that subsection, and this provision shall apply in relation to balancing charges as well as in relation to initial and annual allowances.

• (8) Section 25 of the Finance Act 1961 (which limits the deduction to be made for the cost of hiring a vehicle of which the retail price exceeds two thousand pounds in the proportion which two thousand pounds bears to the retail price) shall have effect in relation to assessments for the year 1963-64 and subsequent years as if after the words " the proportion which two thousand pounds" there were inserted the words " together with one half of the excess ".

• (9) Where a person, having on or after the 4th April 1963 hired (otherwise than by way of hire purchase) a vehicle to which section 25 of the Finance Act 1961 applies subsequently becomes the owner thereof, and the retail price of the vehicle at the time it was made exceeded two thousand pounds, then for the purposes of the Income Tax Acts (and in particular this section)—

• (a) so much of the aggregate of the payments for the hire of the vehicle and of any payment for the acquisition thereof as does not exceed the retail price of the vehicle at the time it was made shall be treated as capital expenditure incurred in the provision of the vehicle, and as having been incurred when the hiring began, and

• (b) the payments to be treated as expenditure on the hiring of the vehicle shall be rateably reduced so as to amount in the aggregate to the balance.

• (10) In section 26 of the Finance Act 1961 (provisions as to hire purchase, etc.) subsections (2) and (3) shall cease to have effect.

• (11) Paragraph 4 of Schedule 3 to the Finance Act 1957 (additional assessments and adjustments of assessments) shall have effect as if references therein to that Schedule included references to subsection (9) of this section; and any claim for an allowance by virtue of that subsection may be made in connection with the making or adjusting of assessments in pursuance of the said paragraph 4, and whether so made or not may notwithstanding anything in section 323 of the Act of 1952 be made at any time not later than two years after the claimant became the owner of the vehicle.

• (12) The said paragraph 4 shall have effect in relation to section 27(3) of the Finance Act 1961 as applied for the purposes of this section as that paragraph had effect in relation to that subsection as originally enacted.

Supplemental provisions as to Chapter III

42

• (1) As respects expenditure incurred before the 6th April 1963, a provision of the foregoing sections of this Chapter which applies to that expenditure but is not expressed to apply for the year 1963-64 and subsequent years shall apply for the year 1962-63 as well as subsequent years, and for that purpose there shall be made all such amendments of assessments, additional assessments and repayments of tax as may be necessary.

• (2) Expenditure shall not be treated for the purposes of any of the provisions of this Chapter as having been incurred after a date mentioned in those provisions by reason only of section 265(6), 279(2) or 309(1) of the Act of 1952 (which relate to expenditure incurred by a person for the purposes of a trade before he begins to carry it on).

• (3) In this Chapter—

• " new machinery or plant " means machinery or plant being unused and not secondhand ;

• " relevant capital amount " means the amount specified in section 281(1)(a) or, as the case may be, section 282(1)(a) of the Act of 1952 as the amount by reference to which an annual allowance is to be computed.

• (4) The provisions of this Chapter (except section 37), so far as they relate to any Chapter of Part )( of the Act of 1952, or to Part )(I of that Act, shall be construed as if contained in that Chapter or in the said Part )(I, as the case may be.

CHAPTER IV — Miscellaneous

Co-operative housing associations

43

• (1) Where a housing association makes a claim in that behalf for any year or part of a year of assessment during which the association was approved for the purposes of this section.—

• (a) rent to which the association was entitled from its members for the year or part shall be disregarded for income tax purposes, and

• (b) any yearly interest payable by the association for the year or part shall be treated for tax purposes as payable not by the association but severally by the members of the association who during the year or part were tenants of property of the association, in the proportion which the rents payable by those members for the year or part bear to the aggregate of the rents to which the association was entitled for the year or part from the properties to which the interest relates.

• (2) Where the property, or any of the properties, to which any such interest as aforesaid relates is for any period not subject to a tenancy, paragraph (b) of the foregoing subsection shall not apply in relation to so much of the interest as is attributable to the property not subject to a tenancy, but for the purposes of that paragraph as it applies in relation to a tenant of any other property to which the interest relates the association shall be deemed to have received, in respect of the property not subject to a tenancy, rent at the rate payable therefor when it was last let by the association.

• (3) In computing the profits or gains of the association no payments shall be deductible under paragraphs 2 to 4 of Schedule 4 to this Act in so far as attributable to a period as respects which a claim under subsection (1) of this section had effect.

• (4) Where a claim under subsection (1) of this section has effect.—

• (a) any amount in respect of tax for which a member of the association is liable to account by virtue of the claim shall, if not otherwise recovered, be recoverable from the association, but the association shall be entitled to have recouped to it by the member any amount recovered from it under this paragraph ;

• (b) any adjustment of the liability to tax of a member or of the association which is required in consequence of the claim may be made by an additional assessment or by repayment or otherwise, as the case may require.

• (5) References in this section to the approval of an association shall be construed as references to approval—

• (a) by the Minister of Housing and Local Government, in the case of an association in England or Wales,

• (b) by the Secretary of State in the case of an association in Scotland,

• (c) by the Minister of Health and Local Government for Northern Ireland, in the case of an association in Northern Ireland;

and an association shall not be approved unless the approving authority is satisfied—

• (i) that the association is duly registered under the Industrial and Provident Societies Acts 1893 to 1961 or the Industrial and Provident Societies Acts (Northern Ireland) 1893 to 1963, and is a housing association within the meaning of the Housing Act 1957, the Housing (Scotland) Act 1950 or section 12 of the Housing and Local Government (Miscellaneous Provisions) Act (Northern Ireland) 1946,

• (ii) that the rules of the association restrict membership to persons who are tenants or prospective tenants of the association, and preclude the granting or assignment (or in Scotland the granting or assignation) of tenancies to persons other than members, and

• (iii) that the association satisfies such other requirements as may be prescribed by the approving authority, and will comply with such conditions as may for the time being be so prescribed.

• (6) An approval given for the purposes of this section shall have effect as from such date (whether before or after the giving of the approval) as may be specified by the approving authority, and shall cease to have effect if revoked by him.

• (7) The Minister of Housing and Local Government and the Secretary of State as respects England and Wales and Scotland, or the Minister of Health and Local Government for Northern Ireland as respects Northern Ireland, may make regulations for the purpose of carrying out the provisions of this section; and from the coming into operation of regulations under this subsection prescribing requirements or conditions for the purposes of paragraph (iii) of subsection (5) of this section, " prescribed " in that paragraph shall mean prescribed by or under such regulations.

The power to make regulations conferred by this subsection on the Minister of Housing and Local Government and the Secretary of State shall be exercisable by statutory instrument.

• (8) The provisions of Schedule 10 to this Act shall have effect in relation to claims under subsection (1) of this section.

• (9) As respects the year 1963-64, subsections (1) and (2) of this section shall apply to any other payment for the time being comprised within section 177 of the Act of 1952 as they apply to yearly interest.

Exemption from tax on housing grants

44

Where, under any enactment relating to the giving of financial assistance for the provision, maintenance or improvement of housing accommodation or other residential accommodation, a payment is made to a person by way of grant or other contribution towards expenses incurred or to be incurred by that or any other person, the payment shall not be treated as a receipt in computing profits or gains for any income tax purposes:

Overseas Trade Corporations: holding companies

45

A company shall not be prevented from qualifying as an Overseas Trade Corporation by reason only that it has a subsidiary company which is resident in the United Kingdom but is not an Overseas Trade Corporation, and accordingly the proviso to section 23(1) of the Finance Act 1957 shall cease to have effect.

Amendment of s. 130 of Act of 1952 (cessations)

46

• (1) Where a trade, profession or vocation is permanently discontinued in the year 1964-65 or any subsequent year of assessment, section 130 of the Act of 1952 (which by paragraph (b) of subsection (1) provides for an additional assessment so as to bring the profits chargeable for the year preceding the year of assessment in which the discontinuance occurs up to the level of the profits of the year ending on the 5th April in that preceding year) shall have effect as if in the said paragraph (b)—

• (a) for the reference to the profits or gains of the said year ending on the 5th April there were substituted a reference to the aggregate of the profits or gains (if any) of the years ending on the 5th April in each of the two years preceding the year of assessment in which the discontinuance occurs, and

• (b) for the reference to the amount on which a person has been or would have been charged for the preceding year there were substituted a reference to the aggregate of the amounts on which he has been or would have been charged for each of the said two preceding years,

as if for other references in that section to the year preceding the year of assessment in which the discontinuance occurs there were substituted references to each of the two years preceding that year of assessment, and as if references in that section to the making of an additional assessment included references to any other adjustment of a person's liability to tax (whether by the reduction or discharge of an assessment or by repayment).

• (2) In accordance with the foregoing subsection, for the references in section 19(4)(b) of the Finance Act 1953 (changes in ownership of trade etc.) and paragraph 2(2) of Schedule 3 to the Finance Act 1954 (permanent discontinuance after certain changes in the persons carrying on a trade) to the end of the year of assessment following that in which the. change occurs there shall be substituted references to the end of the next-but-one year of assessment following that in which the change occurs.

Accommodation occupied by holder of office or employment

47

• (1) Where any premises in the United Kingdom are available to the occupier by reason of his or his wife's holding an office or employment, and—

• (a) he pays no rent for the premises, or

• (b) the rent he pays for them is less than the annual value of the premises, determined in accordance with Schedule 5 to this Act,

the holder of the office or employment shall be treated for the purposes of tax under Schedule E as being in receipt (in addition to any other emoluments) of emoluments at an annual rate equal to the annual value of the premises, determined as aforesaid, reduced by the annual amount of any rent which he pays for them:

Provided that this section shall not apply if the rent is not less than might reasonably be expected to have been obtained at the time when the tenancy was granted, having regard to the terms of the tenancy, and, if at any subsequent time the landlord had the power (whether by terminating the tenancy or otherwise) to obtain a higher rent, the rent is not less than might reasonably be expected to have been obtained as aforesaid at that subsequent time.

• (2) Where in the case of any premises any amount falls under the foregoing subsection to be treated as a person's emoluments, then if section 161(1) of the Act of 1952 (taxation of benefits in kind) applies to expense incurred in the provision of accommodation for him in the premises the expense shall be treated for the purposes of that section as reduced by that amount (or, if that amount is greater than the expense, shall be treated as not having been incurred).

• (3) Where the occupier of premises holds them under a tenancy from or by the leave of the person from whom he or his wife holds an office or employment or any other person with whom that person is connected, the premises shall be conclusively presumed to be available to him by reason of his or his wife's holding the office or employment; and paragraph 20 of Schedule 9 to the Finance Act 1962 (meaning of " connected person ") shall apply for the purposes of this subsection.

• (4) Subsection (1) of this section shall not apply in the case of premises provided by a local authority if the occupier proves that the terms on which he occupies are no more favourable than those on which similar premises provided by that authority are available to persons similarly circumstanced apart from the identity of the employer.

• (5) For the purposes of this section any person who under section 163(1) of the Act of 1952 would be a director of a body corporate shall be treated as holding an office from the body corporate.

• (6) This section shall apply to an occupier being a woman as it applies to an occupier being a man, with the substitution of " her husband " for " his wife ".

• (7) In this section " terms of the tenancy " does not include any obligation imposed on the occupier or his wife in connection with his or her office or employment.

Dealers in land: provisions as to purchase and sale of woodlands

48

• (1) In computing for income tax purposes the profits or gains of a trade of dealing in land, so much of the cost of woodlands in the United Kingdom purchased in the course of the trade shall be disregarded as is attributable to trees growing on the land.

• (2) Where any amount has been disregarded under the foregoing subsection, and on a subsequent sale of the woodlands in the course of the trade all or any of the trees to which the amount disregarded was attributable are still growing on the land, so much of the price for the land shall be disregarded, in computing the profits or gains of the trade for income tax purposes, as is equal to the amount disregarded under the foregoing subsection in respect of those trees.

• (3) References in this section to trees include references to saleable underwood.

• (4) This section shall not apply where the purchase was made under a contract entered into before the 1st May 1963.

India, Pakistan and Burma pensions

49

The exemption from income tax conferred by section 40(1) of the Finance Act 1956 in respect of a pension which is paid under the authority of the Pensions (India, Pakistan and Burma) Act 1955 and is the income of a person who satisfies the Commissioners of Inland Revenue that he is not resident in the United Kingdom shall not apply to so much of any such pension as is paid by virtue of the application to the pension of the Pensions (Increase) Act 1959 or the Pensions (Increase) Act 1962, and accordingly the proviso to the said section 40(1) shall be amended by omitting the word " or " and inserting at the end the words " the Pensions (Increase) Act 1959 or the Pensions (Increase) Act 1962 ".

Certificates of deduction of tax

50

• (1) Where after the passing of this Act a person makes any payment which is subject to deduction of tax by virtue of section 169 or 170 of the Act of 1952, then if the recipient so requests in writing the payer shall furnish the recipient with a statement in writing showing the gross amount of the payment, the amount of tax deducted and the actual amount paid.

• (2) The duty imposed by the foregoing subsection shall be enforceable at the suit or instance of the person requesting the statement.

Deduction of tax from certain dividend payments

51

Paragraph 5 of Schedule C (by which tax on certain half-yearly payments in respect of public revenue dividends which do not exceed fifty shillings is chargeable under Case III of Schedule D and not under Schedule C) shall not apply to payments in respect of any public revenue dividends which are obtained by means of coupons in respect of bonds to bearer or stock certificates; and accordingly that paragraph shall be amended as follows:—

• (a) the words from " but subject to" to " stock certificates) " shall be omitted ; and

• (b) after the words " the distribution" there shall be inserted the words " (not being a payment obtained by means of a coupon in respect of a bond to bearer or stock certificate) ".

Part III

Extension of exemption for small estates

52

As respects deaths occurring on or after the 4th April 1963 the scale of rates of estate duty set out in the Seventh Schedule to the Finance Act 1949, as amended by section 32(1) of the Finance Act 1954 and section 27(1) of the Finance Act 1962, shall have effect with the substitution for the entries relating to estates of a principal value not exceeding ten thousand pounds of the following entries:—

Principal value of estate	Rate per cent. of duty
Not exceeding £5,000	Nil
Exceeding £5,000 and not exceeding £6,000	1
Exceeding £6,000 and not exceeding £7,000	2
Exceeding £7,000 and not exceeding £8,000	3
Exceeding £8,000 and not exceeding £10,000	4

Gifts in consideration of marriage

53

• (1) In the case of a person dying after the passing of this Act a disposition purporting to operate as a gift inter vivos shall not be treated for the purposes of section 59(2) of the Finance (1909-10) Act 1910 as a gift made in consideration of marriage—

• (a) in the case of an outright gift, if or in so far as it is a gift to a person other than a party to the marriage ;

• (b) in the case of any other disposition, if the persons who are or may become entitled to any benefit under the disposition include any person other than—

• (i) the parties to the marriage, issue of the marriage, or a wife or husband of any such issue;

• (ii) persons becoming entitled on the failure of trusts for any such issue under which trust property would (subject only to any power of appointment to a person falling within sub-paragraph (i) or (iii) of this paragraph) vest indefeasibly on the attainment of a specified age or either on the attainment of such an age or on some earlier event, or persons becoming entitled (subject as aforesa(d) on the failure of any limitation in tail;

• (iii) a subsequent wife or husband of a party to the marriage, or any issue, or the wife or husband of any issue, of a subsequent marriage of either party ;

• (iv) persons becoming entitled under such trusts, subsisting under the law of England or of Northern Ireland, as are specified in section 33(1) of the Trustee Act 1925 (protective trusts), the principal beneficiary being a person falling within sub-paragraph (i) or (iii) of this subsection, or under such trusts modified by the enlargement, as respects any period during which there is no such issue as aforesaid in existence, of the class of potential beneficiaries specified in paragraph (ii) of the said section 33(1);

• (v) persons becoming entitled under trusts subsisting under the law of Scotland and corresponding with such trusts as are mentioned in the foregoing sub-paragraph;

• (vi) as respects a reasonable amount by way of remuneration, the trustees of the settlement.

• (2) A disposition made by either of the parties to a marriage shall not be prevented from being treated as a gift for the purposes of section 2(1)(c) of the Finance Act 1894 (description of property deemed to pass on death) by reason only that it is in any way made in consideration of marriage, and references to a gift in the other enactments relating to estate duty (including the foregoing subsection) shall be construed accordingly.

• (3) References in this section to issue shall apply as if any person legitimated by a marriage, or adopted by the husband and wife jointly, were included among the issue of that marriage.

• (4) This section shall not apply where the disposition was made before the 4th April 1963.

Exemption for gifts of land of outstanding scenic, historic or scientific interest

54

• (1) As respects estate duty leviable on or with reference to any death occurring on or after the 4th April 1963, subsections (2) to (4) of section 33 of the Finance Act 1951 (estate duty exemptions in connection with preservation of buildings for public benefit) shall subject to the provisions of this section apply to any gift, devise or bequest of land (with or without buildings thereon) which in the opinion of the Treasury is of outstanding scenic, historic or scientific interest.

• (2) In relation to gifts, devises or bequests to which the said subsections apply by virtue of this section they shall have effect subject to the following modifications:—

• (a) for references to a house or other building with or without grounds there shall be substituted references to land with or without buildings;

• (b) for references to preservation of a house or building there shall be substituted references to preservation of the character of land ;

• (c) in subsection (2) the words " and the 1949 section, together with the foregoing subsection of this section " shall be deemed to be omitted;

• (d) for paragraph (a) of subsection (3) there shall be substituted—

the land is of outstanding scenic, historic or scientific interest;

• (e) for the reference in the said subsection (3) to securing reasonable access for the public there shall be substituted a reference to securing reasonable access for the public or prohibiting or restricting access, as may be appropriate to the character of the land.

Part IV — Stamp Duties

Reduction of duties

Reduced duty on conveyance or transfer on sale

55

• (1) Subject to subsections (1A) to (3) below and to the following provisions of this Part of this Act, the stamp duty chargeable under the heading “Conveyance or Transfer on sale” in Schedule 1 to the Stamp Act 1891 shall be charged by reference to the amount or value of the consideration for the sale at the following rates, that is to say—

• (a) where the amount or value of the consideration is £60,000 or under and the instrument is certified, as described in section 34(4) of the Finance Act 1958, at £60,000, nil;

• (b) where paragraph (a) above does not apply and—

• (i) the amount or value of the consideration does not exceed £500, and

• (ii) the instrument is certified as described in section 34(4) of the Finance Act 1958 at £250,000,

the rate of 50p for every £50 or part of £50 of the consideration;

• (c) where paragraph (a) above does not apply and—

• (i) the amount or value of the consideration exceeds £500 but does not exceed £250,000, and

• (ii) the instrument is certified as described in section 34(4) of the Finance Act 1958 at £250,000,

the rate of £1 for every £100 or part of £100 of the consideration;

• (d) where paragraphs (a) to (c) above do not apply and—

• (i) the amount or value of the consideration does not exceed £500,000, and

• (ii) the instrument is certified as described in section 34(4) of the Finance Act 1958 at £500,000,

the rate of £2.50p for every £100 or part of £100 of the consideration; and

• (e) in any other case the rate of £3.50pfor every £100 or part of £100 of the consideration;

and any duty chargeable by reference to that heading shall be charged accordingly.

• (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) In relation to duty chargeable by reference to the heading mentioned in subsection (1) above by virtue of the heading “Lease or Tack” in the said Schedule 1 in a case where part of the consideration consists of rent and that rent exceeds £600 a year, subsection (1) above shall have effect as if(a)paragraph (a) and, in paragraphs (b) and (c), the words “paragraph (a) above does not apply and” were omitted. and

• (b) in paragraph (d) for the words “paragraphs (a) to (c)” there were substituted the words “paragraphs (b) and (c)”.

• (3) Nothing in this section shall affect any enactment imposing an upper limit on the amount of duty chargeable ad valorem.

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reduced duty on leases

56

• (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) For the purposes of the said heading a lease granted for a fixed term and thereafter until determined shall be treated as a lease for a definite term equal to the fixed term together with such further period as must elapse before the earliest date at which the lease can be determined; and section 75 of the said Act of 1891 (agreements for leases) shall be construed accordingly.

• (4) Section 76, subsections (3) and (4) of section 77 and section 78 of the said Act of 1891 shall cease to have effect.

Miscellaneous reductions

57

• (1) The rates of stamp duty chargeable under or by reference to the following headings or parts of headings in Schedule 1 to the Stamp Act 1891, that is to say—

• Bond, Covenant or Instrument of any kind whatsoever

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

• Mortgage, Bond, Debenture, Covenant and Warrant of Attorney,

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

shall be those at which the duty would be chargeable if section 52 of the Finance Act 1947 (which doubled the rates) had not been enacted.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Transitional provisions relating to reduction of duty

58

Bearer Instruments

Stamp duty on bearer instruments

59

• (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) Section 44 of the Finance Act 1944 (repayment of transfer duty in case of securities transferable by delivery) shall cease to have effect.

Payment of duty

60

Ascertainment of market value

61

Miscellaneous

Commonwealth stock

62

• (1) In Schedule 1 to the Stamp Act 1891, the heading “Conveyance or Transfer whether on sale or otherwise” (which relates to Canadian and colonial stock) shall be omitted, . . . .

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Securities for annual and other payments

63

In determining whether an instrument is—

• (a) the only, principal or primary security for any annuity or for any sum or sums of money within the meaning of paragraph (1) of the heading “Bond, Covenant or Instrument of any kind whatsoever” in Schedule 1 to the Stamp Act 1891; or

• (b) the only, principal or primary security for the payment or repayment of money within the meaning of paragraph (1) of the heading “Mortgage, Bond, Debenture, Covenant and Warrant of Attorney” in that Schedule,

no account shall be taken of any other instrument which is a security for the same annuity, sum or sums, or for the same payment or repayment, as the case may be, or for any part thereof, unless that other instrument is chargeable with stamp duty under either of the said paragraphs and is duly stamped.

Gifts in consideration of marriage

64

Miscellaneous exemptions

65

• (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) In Part VII of the Finance Act 1946 . . . , the references to a unit trust scheme shall be deemed not to include references—

• (a) to any common investment scheme under section 22 of the Charities Act 1960 or any common deposit scheme under section 22A of that Actor to any common investment scheme under section 24 or any common deposit scheme under section 25 of the Charities Act 1993;; or

• (b) to any unit trust scheme the units in which are, under the terms of the trust instrument relating to the scheme, required to be held only by bodies of persons established for charitable purposes only or trustees of trusts so established.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Composition for stamp duty on local authorities' securities

66

Prohibition of circulation of blank transfers

67

Part V — Miscellaneous

Abolition of land tax

68

• (1) All properties which remained chargeable to land tax until the end of the land tax year 1962 - 63 shall be exonerated from land after the end of that year.

• (2) As respects land tax for the land tax year 1962 - 63 and for earlier years, and all other matters—

• (a) the functions of the Land Tax Commissioners shall be transferred to the Commissioners for the general purposes of the income tax for the respective divisions in which the properties are situated,

• (b) the functions of the collectors of land tax shall be transferred to the collectors of taxes ;

and the offices of the Land Tax Commissioner, clerk to Land Tax Commissioners and collector of land tax shall be abolished.

This subsection shall come into force on the 1st October 1963.

• (3) This section shall not affect any compulsory redemption of land tax under section 39 of the Finance Act 1949 where the date on which the property became liable to redemption was a date falling on or before the 24th March 1963.

• (4) In section “land tax year” means a period of twelve months ending with the 24th March.

Profits tax provisions in connection with Part II of this Act

69

Exchequer advances under Finance Act 1956, s. 42

70

Further provision for bearer bonds in respect of government securities

71

• (1) Subject to . . . regulations under this section, any person who is registered as the holder of any government security to which this section applies shall be entitled at his option to a bearer bond in lieu of the whole or any part of his holding; and the holder of such a bond shall be entitled, upon surrender of the bond, to be registered as the holder of the security represented by the bond.

• (2) This section applies to government securities being stock to which Part V of the National Debt Act 1870 applies at the commencement of this Act, or securities of such other descriptions as may be prescribed by order of the Treasury.

• (3) The Treasury may make regulations, in respect of all or any descriptions of government securities for which bearer bonds are available, whether by virtue of this section or by virtue of the terms of issue of the securities, for regulating the issue of bearer bonds and of coupons for the payment of dividends thereon; and such regulations may make provision—

• (a) for any matters (other than income tax) for which provision is made at the commencement of this Act by Part V of the National Debt Act 1870 or by regulations under the said Part V in relation to stock subject to that Part;

• (b) for any incidental, supplementary or transitional matters relating to such bonds or coupons, and to transactions connected therewith, for which it appears to the Treasury to be necessary or expedient to provide:

Provided that nothing in such regulations, so far as applicable to securities in respect of which bearer bonds are available by virtue of the terms of issue, shall take away or abridge any rights conferred on the holders by those terms.

• (4) Any power of the Treasury to make orders or regulations under this section shall be exercisable by statutory instrument; and any statutory instrument made by virtue of this section shall—

• (a) in the case of an order under subsection (2), be laid before Parliament after being made; and

• (b) in the case of regulations under subsection (3), be subject to annulment in pursuance of a resolution of either House of Parliament.

• (5) In this section “government securities” means securities of any description comprised in the definition of “government stock” in section 15(1) of the National Debt Act 1972.

• (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Redemption of guaranteed land stock

72

Short title, commencement, construction, extent, amendments and repeals

73

• (1) This Act may be cited as the Finance Act 1963.

• (2) Part IV of this Act (except section 67) shall come into force on the 1st August 1963.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Part IV shall be construed as one with the Stamp Act 1891.

• (5) Any reference in this Act to any other enactment shall, except so far as the context otherwise requires, be construed as a reference to that enactment as amended or applied by or under any other enactment, including this Act.

• (6) Such of the provisions of this Act as relate to matters in respect of which the Parliament of Northern Ireland has power to make laws shall not extend to Northern Ireland.

• (7) In consequence of, or otherwise in connection with, the enactment of Chapter II of Part II of this Act—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) the enactments mentioned in Parts I, II and III of Schedule 13 to this Act are hereby repealed, to the extent mentioned in the third column of that Schedule, but subject as respects the repeals contained in each Part to any provision made at the end of that Part as to the effect of those repeals;

• (c) the enactments mentioned in Part IV of Schedule 13 to this Act are hereby repealed to the extent mentioned in the second column of that Part, from the date or, as the case may be, as respects the matters specified in relation thereto in the third column of that Part.

• (8) The enactments mentioned in Schedule 14 to this Act—

• (a) so far as they are mentioned in Part I of that Schedule are hereby repealed to the extent mentioned in the second column of that Part as from the date specified in relation thereto in the third column of that Part;

• (b) so far as they are mentioned in any other Part of that Schedule are hereby repealed to the extent mentioned in the third column of that Part,

but subject as regards the repeals contained in any Part of that Schedule to any provision in relation thereto made at the end of that Part.

• (9) The provisions of Schedule 13 and 14 to this Act as to the operation or effect of repeals contained in those Schedules are without prejudice to the provisions of section 38(2) of the Interpretation Act 1889.

SCHEDULE 1

SCHEDULE 2

1

• (1) Section 125 of the Act of 1952 shall be amended as follows.

• (2) In subsection (1) for the words "as a private brewer" there shall be substituted " holds a limited licence to brew beer, that is to say a licence authorising him to brew as mentioned in section 6(2) of the Finance Act 1963, or is exempted by subsection (3) of this section. "

• (3) In subsection (2) after the words " such licence" there shall be inserted " to brew for sale ", and at the end of the. subsection there shall be inserted " and on every limited licence to brew beer there shall be charged a duty of excise of four shillings ".

• (4) In subsection (3) for the words from the beginning to " authorise " there shall be substituted " A licence to brew beer shall not be required for ", and for the words " and shall not be granted to " there shall be substituted " so however that this subsection shall not exempt ".

• (5) In subsection (5), after the word "person" there shall be inserted " except as permitted by subsection (3) of this section ".

2

• (1) Section 131 of the Act of 1952 shall be amended as follows.

• (2) For the words "licence to brew beer as a private brewer", wherever they occur, there shall be substituted " limited licence to brew beer ".

• (3) In subsection (1) for the words " one house only, being a house " there shall be substituted " one set of premises only, being premises ", and for the words from the beginning of the proviso to the end of the subsection there shall be substituted " For the purposes of this subsection the land and buildings within one curtilage, or any lands and buildings in Scotland with their parts and pertinents, shall be treated as one set of premises ".

• (4) In subsection (2) after the words " personal representatives or " there shall be inserted " liquidator or ".

• (5) In subsections (3) to (5) for references to a private brewer there shall be substituted references to the holder of a limited licence to brew beer.

3

In section 134 of the Act of 1952, in subsection (1) for the reference to a private brewer there shall be substituted a reference to the holder of a limited licence to brew beer or of a corresponding licence granted in Northern Ireland, and in subsection (3) the words from the beginning of the proviso to the end of the subsection shall cease to have effect.

4

In section 307(1) of the Act of 1952, in the definition of " brewer ", the words " and ' private brewer' ", " respectively ", and " and a person holding such a licence as a private brewer" shall cease to have effect, and after the definition of " licence year " there shall be inserted—

• ' limited licence to brew beer ' has the meaning assigned by section 125(1) of this Act

.

5

In Schedule 2 to the Act of 1952, Part II shall cease to have effect.

SCHEDULE 3

SCHEDULES 4–10

Deductions from rents: general rules

1

The deductions which may be made from rent to which a person (hereinafter referred to as " the person chargeable ") becomes entitled under a lease shall be such deductions of the amounts of payments made by him—

• (a) in respect of maintenance, repairs, insurance or management;

• (b) in respect of any services provided by him otherwise than y way of maintenance or repairs, being services which he was obliged to provide but in respect of which he received no separate consideration;

• (c) in respect of rates or other charges on the occupier which he person chargeable was obliged to defray;

• (d) in respect of any rent, rentcharge, ground annual, feu duty r other periodical payment reserved in respect of, or charged on or issuing out of, land,

as are provided by the following provisions of this Schedule.

2

Subject to the provisions of this Schedule, from rent to which the person chargeable becomes entitled in a year of assessment there may be deducted the amount of any such payment as aforesaid which became due in the year of assessment or at an earlier time falling within the currency of the lease, in so far as the payment—

• (a) was made in respect of the premises comprised in the lease, and

• (b) in the case of a payment for maintenance or repairs, was incurred by reason of dilapidation attributable to a period falling within the currency of the lease or, in the case of any other payment, was incurred in respect of such a period:

3

• (1) In the case of a lease at a full rent, the foregoing paragraph shall apply as if references to the currency of the lease included any period (hereinafter referred to as " a previous qualifying period ")—

• (a) during which the person chargeable was the landlord in relation to a previous lease of the premises, being a lease at a full rent, or

• (b) which was a void period beginning either with the termination of a previous such lease as aforesaid or with the acquisition by the person chargeable of the interest in the premises giving him the right to possession thereof,

so however that a period shall not be a previous qualifying period if it preceded a period ending before the beginning of the lease which was not itself a previous qualifying period.

• (2) Where during any period the conditions necessary for the period to be a previous qualifying period were fulfilled as respects part of the premises, but not the whole, the period shall be treated as a previous qualifying period as respects that part of the premises only, and the foregoing sub-paragraph shall apply accordingly, any necessary apportionment being made of rent, payments or other matters.

• (3) In this and the next following paragraph, " void period" means a period during which the person chargeable was not in occupation of the premises or any part thereof, but was entitled to possession thereof.

4

Subject to the provisions of this Schedule, in the case of a lease at a full rent, not being a tenant's repairing lease, there may also be deducted the amount of any payment made in respect of other premises by the person chargeable—

• (a) in so far as that amount could be deducted under paragraphs 2 and 3 of this Schedule from rent to which he became entitled in the year of assessment under a lease of those other premises, being a lease at a full rent, or could be so deducted if that rent were not insufficient; or

• (b) if any part of the year of assessment is, in respect of those other premises, a void period beginning with the termination of a lease at a full rent, in so far as the amount could be deducted as aforesaid if the lease had continued until the end of that period.

5

Where by reason of any change of circumstances a lease ceases to be, or becomes, a tenant's repairing lease or ceases to be, or becomes, a lease at a full rent, paragraphs 3 and 4 of this Schedule shall apply in relation to the lease as it subsists after the change of circumstances as if it were a new lease granted when the change occurred.

6

Where the person chargeable retains possession of a part of any premises and that part is used in common by persons respectively occupying other parts of the premises, the foregoing provisions of this Schedule shall apply as if a payment made in respect of the part used in common had been made in respect of those other parts.

Deductions from rents: land managed as one estate

7

• (1) Where this paragraph applies to an estate for a year of assessment, the owner shall be treated—

• (a) in relation to a part of the estate which for any period in the year is not comprised in a lease under which he is the landlord, as if he were entitled under a lease of that part at a full rent (not being a tenant's repairing lease) to rent for the said period, becoming due from day to day, at a rate per annum equal to the annual value of that part ascertained in accordance with Schedule 5 to this Act; and

• (b) in relation to a part of the estate which for any period in he year is comprised in a lease under which he is the landlord, not being a lease at a full rent, as if the lease were at a full rent and the rent, so far as it relates to that part, were at a rate per annum not less than the annual value of that part ascertained in accordance with the said Schedule 5,

and the foregoing provisions of this Schedule shall apply accordingly:

Provided that—

• (i) a payment relating to premises comprised in the estate shall not be deductible from rent in respect of premises not so comprised;

• (ii) paragraph (a) above shall not apply to premises occupied by the owner wholly and exclusively for purposes connected with the management of the estate or for the purposes of a trade, profession or vocation.

• (2) This paragraph shall apply to an estate if, at the end of the year 1962-63, the land then comprised therein was managed as one estate and the owner for the time being of the estate by notice in writing to the surveyor so elects, but such an election—

• (a) must be made within twelve months after the end of the first year of assessment for which the person making it became entitled to make it or such further time as the Commissioners of Inland Revenue may allow ;

• (b) except in the case of the first election that can be made under this paragraph, shall not have effect unless the like election has had effect as respects the immediately preceding ownership ;

• (c) shall apply in relation to the estate throughout the owner ship of the person making it.

• (3) Where in any year of assessment the estate comprises premises not included in it at the end of the year 1962-63, sub-paragraph (1) of this paragraph (except the proviso) shall apply in relation to the year of assessment as if the premises were not included in the estate in the year:

Provided that where at the end of the year 1962-63 the owner of the remainder of the estate, as then subsisting, was entitled under trusts arising under a settlement or on an intestacy, or was entitled (in Scotland) under a disposition by way of liferent and feu, to an interest such that, on the occurrence of some future event or events, he might become the owner of the said premises, this sub-paragraph shall not apply to the premises if at any time before the end of the year 1962-63 the premises and the remainder of the estate, as then subsisting, were together managed as one estate.

• (4) In this paragraph " estate" means land in one ownership managed as one estate.

Deductions from rents: premiums etc.

8

• (1) Where in relation to any premises—

• (a) tax has become chargeable under the provisions of section 22 (except subsection (6)), 23 or 24 of this Act on any amount (disregarding any reduction in that amount under this paragraph), or

• (b) tax would have become so chargeable on that amount but for the operation of section 22(6) of this Act or this paragraph, or but for any exemption from tax,

and, in respect of a lease granted out of, or disposition of, the lease, estate or interest in respect of which tax so became or would have become chargeable on the said amount (in this and the two following paragraphs referred to as " the amount chargeable on the superior interest"), a person would apart from this paragraph be chargeable under the said provisions on any amount (in this and the following paragraph referred to as " the later chargeable amount"), the amount on which he is so chargeable shall, where no claim is or can be made by him under section 22(6) of this Act, be the excess (if any) of the later chargeable amount over the appropriate fraction of the amount chargeable on the superior interest.

• (2) Where a person would apart from this paragraph be so chargeable in respect of a lease or disposition which extends to a part only of the said premises, the amount on which he is so chargeable shall, where no claim is or can be made by him under section 22(6) of this Act, be the excess (if any) of the later chargeable amount over so much of the appropriate fraction of the amount chargeable on the superior interest as, on a just apportionment, is attributable to that part of the premises.