Finance Act 1964 (repealed)

PART I

Spirits

1

Beer

2

Wine and British wine

3

Tobacco

4

Hydrocarbon oils: increase of excise duty

5

Hydrocarbon oils: reliefs

6

Pool betting duty and bookmakers' licence duty

7

Surcharges and rebates under s. 9 of Finance Act 1961

8

Repeal of television advertisement duty

9

Stores

10

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Exemption from excise duty of vehicles modified for invalids

11

PART II

Charge of income tax for 1964-65

12

Surtax rates for 1963-64

13

Income tax for the year 1963-64 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 1962-63.

Relief for persons over sixty-five with small incomes

14

In section 13 of the Finance Act 1957 (relief for persons over sixty-five with small incomes), as amended by section 8(2) of the Finance Act 1962 and section 12(7) of the Finance Act 1963, for the references to £325 and to £520 (the income limits for exemption) there shall be substituted references to £360 and to £575; and (as regards the marginal relief) for the reference to £75 (the addition to the income limit) there shall be substituted a reference to £130.

Transfer of part of company's trade without change of ownership

15

• (1) Where on a change in the year 1964-65 or any subsequent year of assessment in the persons carrying on a part of a trade a person carries on that part as his separate trade, and if it had been carried on as a separate trade immediately before the change subsection (1) of section 17 (company reconstruction without change of ownership not to be treated as involving a discontinuance of the trade) of the Finance Act 1954 would have applied to the change, then—

• (a) the part in question shall be treated for all the purposes of the Income Tax Acts not as a new trade set up and commenced by that person, but as carried on by him in continuation of a separate trade consisting of that part; and

• (b) so far as may be necessary for that purpose, there shall be made such apportionments as may be just of any profits or gains, losses, allowances or charges.

• (2) Schedule 3 to the Finance Act 1954 (which contains provisions for supplementing and giving effect to the said section 17) shall apply in relation to the change as if it were an event falling to be treated by subsection (3) of the said section 17 as a change to which subsection (1) thereof applies, but so that paragraph 6 of that Schedule (which modifies the provisions of section 143 of the Income Tax Act 1952 as to the valuation of trading stock on a discontinuance) shall be taken to require that, in computing for the purposes of this section any profits or gains, section 143 of the Income Tax Act 1952 shall apply in relation to the change as it applies on the discontinuance of a trade.

• (3) Where, on changes in the persons respectively carrying on parts of two or more trades, a person carries on those parts together as his separate trade and, in the case of each of the parts, the foregoing provisions of this section would apply if that part alone were so carried on by him, those provisions shall apply separately in relation to each part and the trade carried on by him shall for that purpose be treated as divided into separate trades each corresponding to one of the said parts, and shall not for any of the purposes of the Income Tax Acts be treated as a new trade set up and commenced by him.

Extension of double taxation relief in respect of certain dividends

16

• (1) In the following provisions of the Income Tax Acts (which relate to the allowance of double taxation relief on certain dividends paid to a company resident in the United Kingdom and controlling, directly or indirectly, a specified proportion of the voting power in the company paying the dividend, and provide for taking account of foreign tax paid by the last-mentioned company in respect of its profits), that is to say.—

• (a) in the Income Tax Act 1952, paragraph 10 of Schedule 16 and paragraph 3 of Schedule 17; and

• (b) in the Finance Act 1962, subsection (2) of section 20;

for the words " not less than one-half of the voting power " there shall in each case be substituted the words " not less than one-quarter of the voting power ".

• (2) Accordingly there shall cease to have effect so much of section 20 of the Finance Act 1962 as provides for companies which control, in the company paying the dividend, a proportion of the voting power greater than one-quarter and are subject to a local limitation preventing them from controlling a larger proportion.

• (3) For the purposes of the provisions of the Income Tax Acts mentioned in subsection (1) of this section a company shall be deemed to control, directly or indirectly, not less than one-quarter of the voting power in another company if a third company having such control also controls, directly or indirectly, not less than one-half of the voting power in the first-mentioned company.

• (4) This section, and any repeal made by this Act in section 20 of the Finance Act 1962 (or in the enactments amended by that section), shall have effect only in relation to dividends by reference to which income tax is chargeable for the year 1964-65 or a subsequent year of assessment and (for the purposes of the profits tax) in relation to any other dividends which are received after the end of March 1964 and by reference to which income tax is not chargeable for any year of assessment.

Plant and machinery and other assets leased to traders and others

17

• (1) Subject to the next following section, where—

• (a) a deduction by way of income tax relief which is of one of the kinds listed in subsection (4) hereof is allowable in respect of a payment made under a lease of an asset of any description, and

• (b) before, at or after the time when the payment is made the person who made the payment has obtained or obtains a capital sum in respect of the lessee's interest in the lease, or, before, at or after that time, the lessor's interest in the lease, or any other interest in the asset, has belonged to a person associated with the person who made the payment, and that person so associated with the person who made the payment has obtained a capital sum in respect of that interest,

the person obtaining that sum shall be charged under Case VI of Schedule D for the year of assessment in which the sum is obtained with tax on an amount equal to the amount of the payment in respect of which tax relief is so allowed:

Provided that the total amount on which he is assessed by reference to the capital sum shall not exceed the amount of the capital sum.

• (2) Subject to the next following section, where—

• (a) in computing the profits or losses of a trade or business for the purposes of the profits tax a deduction is allowable in respect of a payment made under a lease of an asset of any description, and

• (b) before, at or after the time when the payment is made the person who made the payment has obtained or obtains a capital sum in respect of the lessee's interest in the lease, or, before, at or after that time, the lessor's interest in the lease, or any other interest in the asset, has belonged to a person associated with the person who made the payment, and that person so associated with the person who made the payment has obtained a capital sum in respect of that interest,

the person obtaining that sum shall be treated for the purposes of the profits tax as having received income chargeable to the profits tax at the time when the sum is obtained of an amount equal to the amount of the payment in respect of which a deduction was so made :

Provided that the total amount of the income which is to be treated as arising under this subsection by reference to the capital sum shall not exceed the amount of the capital sum.

• (3) Subsections (1) and (2) of this section shall not apply to payments under a lease created on or before 14th April 1964.

• (4) The kinds of deductions by way of income tax relief to which subsection (1) of this section applies are as follows—

• (a) a deduction in computing profits or gains or losses of a trade, profession or vocation for the purposes of income tax,

• (b) a deduction in computing profits or gains chargeable under Case VI of Schedule D, or in computing any loss for which relief is allowable under section 346 of the Income Tax Act 1952,

• (c) allowance of a payment as forming part of expenses of management in respect of which relief may be given under section 425 of the Income Tax Act 1952 (including in the reference to the said section 425 a reference to that section as applied by section 438 of that Act (savings banks and certain industrial and provident societies) or by section 69 of the Finance Act 1960 (unit trust schemes),

• (d) a deduction from emoluments to be assessed under Schedule E made in pursuance of paragraph 7 of Schedule 9 to the Income Tax Act 1952, or allowable in computing losses in an employment for income tax purposes,

• (e) a deduction allowable for income tax purposes in computing profits or gains or losses arising from woodlands.

• (5) Where the deduction by way of income tax relief mentioned in subsection (1)(a) of this section is a deduction in computing profits or gains or losses of a trade, profession or vocation, or arising from woodlands, and any part of the payments made under the lease by the person obtaining the capital sum is a payment in respect of which a deduction is not allowed for the reason that the whole or any part of the period in which the payment would fall to be allowed is not a period on the profits or gains of which income tax falls to be computed in respect of the trade, profession or vocation, for the reference in the proviso to the said subsection (1) to the amount of the capital sum there shall be substituted a reference to that amount after deducting the amount of the payment in respect of which a deduction is not allowed for that reason.

• (6) In subsection (2) of this section references to any deduction allowable or made in computing the profits or losses of a trade or business include references to a deduction which would be so allowable or made but for the provisions of section 42(5) of the Finance Act 1938 (payments by one member of a group of companies to another).

• (7) Part I of Schedule 7 to this Act shall apply for the purposes of this section, and in this section and that Schedule—

• " asset " means any description of property or rights other than land or an interest in land, and

• " lease ", in relation to an asset, means any kind of agreement or arrangement under which payments are made for the use of, or otherwise in respect of, an asset, and includes, in particular, any agreement or arrangement all or any of the payments under which represent instalments of, or payments towards, a purchase price,

but, in relation to a lease which constitutes a hire-purchase agreement as denned in Part II of Schedule 7 to this Act, this section shall have effect subject to the modifications set out in the said Part II.

Plant and machinery and other assets leased to persons carrying on trade, etc.: special cases

18

• (1) This section shall apply, and the last foregoing section shall not apply, to payments—

• (a) which are allowable by way of deductions in computing the profits or gains or losses of a trade, and

• (b) which are made under a lease of an asset which at any time before the creation of the lease was used for the purposes—

• (i) of that trade, or

• (ii) of another trade carried on by the person who at that time or later was carrying on the first mentioned trade,

and, when so used, was owned by the person carrying on the trade in which it was being used.

• (2) Subject to this section, the deduction allowable in computing the profits or gains or losses of the trade for the purposes of income tax as respects any such payment shall not exceed the commercial rent of the asset for the period for which the payment was made.

• (3) If under subsection (2) of this section part of a payment which would otherwise be allowable as a deduction is not so allowable, and one or more subsequent payments are made by the same person under the same lease, that part of the first-mentioned payment may be carried forward and treated for the purposes of computing the profits or gains or losses of the trade for the purposes of income tax as if it were made at the time when the next of those subsequent payments was made, and so made for the period for which that subsequent payment was made.

• (4) For the purposes of subsection (2) of this section—

• (a) if more than one payment is made for the same period the payments shall be taken together,

• (b) if payments are made for periods which overlap, the payments shall be apportioned, and the apportioned payments which belong to the common part of the overlapping periods shall be taken together,

• (c) the foregoing references to payments include references to parts of payments which under subsection (3) of this section are treated as if made at a time subsequent to that at which they were made,

and to the extent that a part of a payment carried forward under subsection (3) of this section is not allowable as a deduction it may again be carried forward under the said subsection (3).

• (5) A payment made for a period all of which falls more than one year after the payment is made shall be treated for the purposes of this section as made for that period of one year beginning with the date on which the payment is made, and a payment for a period part of which falls after the end of that year shall be treated for those purposes as if a corresponding part of the payment was made for that year (and no part for any later period).

• (6) For the purpose of making a comparison under subsection (2) of this section between a payment, or payments taken together, and the commercial rent of the asset, " commercial rent" shall mean the rent which might at the relevant time be expected to be paid under a lease of the asset for the remainder of the anticipated normal working life of the asset, being a rent payable at uniform intervals and at a uniform rate which would afford a reasonable return for its market value at the relevant time, having regard to the terms and conditions of the lease, and in this subsection—

• " anticipated normal working life " has, for any asset, the meaning given, for machinery and plant, by section 281(6) of the Income Tax Act 1952, and

• " the relevant time " means the time when the lease was created under which the payment was made with which the commercial rent is to be compared:

Provided that if the asset is used at the same time partly for the purposes of the trade and partly for other purposes the commercial rent as defined in this subsection shall be determined by reference to what would be paid for such a partial use of the asset.

• (7) This section shall not apply in relation to payments made under a lease created on or before 14th April 1964.

• (8) In this section references to the person carrying on a trade are references to the person carrying on the trade for the time being, and where at any time a person succeeds to a trade which until that time was carried on by another person, and by virtue of section 19 of the Finance Act 1953 the trade is to be treated as discontinued, the trade shall, nonetheless, be treated as the same trade for the purposes of this section.

• (9) In this section references to a trade include references to a profession or vocation.

• (10) In this section "asset" and "lease" have the same meanings as in the last foregoing section.

Land sold and leased back: limitation on tax reliefs

19

• (1) If at any time after 14th April 1964 land or any estate or interest in land is transferred from one person to another and—

• (a) as a result of a lease of the land or any part of the land granted at that time or subsequently by the transferee to the transferor, or

• (b) as a result of any other transaction or series of transactions affecting the land or any estate or interest in the land,

the transferor, or any person who is associated with the transferor, becomes liable at the time of the transfer or subsequently to pay any rent under a lease of the land or any part of the land, this section shall apply to all rent due under the lease from the transferor, or from any person who is associated with the transferor.

• (2) If at any time after 14th April 1964 land or any estate or interest in land is transferred from one person to another, and, as a result of any transaction or series of transactions affecting the land or any estate or interest in the land, the transferor, or any person who is associated with the transferor, becomes liable at the time of the transfer or subsequently to make any payment (other than rent under a lease) for which tax relief of any of the kinds listed at the end of this section is available, being a payment by way of rentcharge on the land or any part of the land or a payment in any other way connected with the land, this section shall apply to all such payments under the rent charge or other transaction due from the transferor, or from any person who is associated with the transferor.

• (3) The references in subsections (1) and (2) of this section to the transfer of an estate or interest in land include references to the granting of a lease or any other transaction involving the creation of a new estate or interest in the land and also include references to the transfer of the lessee's interest under a lease by surrender or forfeiture of the lease, and references to any transaction or series of transactions affecting land, or an estate or interest in land, such that some person is the owner, or one of the owners, before and after the carrying out of the transaction or transactions, but another person becomes or ceases to become one of the owners ; and in relation to any such transaction or series of transactions any person who is an owner before the carrying out of the transaction or transactions, and is not the sole owner thereafter, shall be regarded for the purposes of this section as a transferor.

• (4) A deduction by way of income tax relief which is one of the kinds to which this section applies, being a deduction in respect of rent or of any other payment to which this section applies, shall not exceed the commercial rent for the period for which the rent or other payment is made of the land in respect of which that payment is made.

• (5) If under subsection (4) of this section part of a payment which would otherwise be allowable as a deduction by way of income tax relief of one of the kinds listed at the end of this section is not so allowable, and one or more subsequent payments are made by the transferor, or a person who is associated with the transferor, under the lease or other transaction, that part of the first-mentioned payment may be carried forward and treated for the purposes of any such deduction by way of income tax relief as if it were made at the time when the next of those subsequent payments was made, and so made for the period for which that subsequent payment was made.

• (6) For the purposes of subsection (4) of this section—

• (a) if more than one payment is made for the same period the payments shall be taken together,

• (b) if payments are made for periods which overlap, the payments shall be apportioned, and the apportioned payments which belong to the common part of the overlapping periods shall be taken together,

• (c) the foregoing references to payments include references to parts of payments which under subsection (5) of this section are treated as if made at a time subsequent to that at which they were made, and to the extent that a part of a payment so carried forward under subsection (5) of this section is not so allowable as a deduction by way of income tax relief, it may again be carried forward under subsection (5) of this section,

• (d) so much of any payment as is in respect of services or the use of assets (as defined in section 17 of this Act) or rates usually borne by the tenant shall be excluded, and in determining the amount to be so excluded provisions in any lease or agreement fixing the payments or parts of payments which are in respect of services or the use of assets may be overridden.

• (7) A payment made for a period all of which falls more than one year after the payment is made shall be treated for the purposes of this section as made for that period of one year beginning with the date on which the payment was made, and a payment for a period part of which falls after the end of that year shall be treated for those purposes as if a corresponding part of the payment was made for that year (and no part for any later period).

• (8) For the purpose of making a comparison under subsection (4) of this section between a payment consisting of rent under a lease (in this subsection referred to as " the actual lease "), or such payments taken together, and the commercial rent of the land, " commercial rent" shall mean the rent which might be expected to be paid under a lease of the land negotiated in the open market at the time when the actual lease was created, being a lease which is of the same duration as the actual lease, which is, as respects liability for maintenance and repairs, subject to the terms and conditions of the actual lease and which provides for rent payable at uniform intervals and—

• (a) at a uniform rate, or

• (b) if the rent payable under the actual lease is rent at a progressive rate (and such that the amount of rent payable for any year is never less than the amount payable for any previous year), a rent which progresses by gradations proportionate to those provided by the actual lease.

• (9) For the purpose of making a comparison under subsection (4) of this section between a payment which does not consist of rent under a lease (or such a payment taken together with other payments) and the commercial rent of the land, " commercial rent" shall mean the rent which might be expected to be paid under a tenant's repairing lease as defined in paragraph 19 of Schedule 4 to the Finance Act 1963 negotiated in the open market at the time when the transaction was effected under which the payment or payments became due, being—

• (a) where the period over which payments are to be made under that transaction is not less than 200 years, or the obligation to make such payments is perpetual, a lease for 200 years, and

• (b) where that period is less than 200 years, a lease which is of the same duration as that period.

• (10) In this section references to rent under a lease include references to rent which the person entitled to the lease is under Chapter II of Part II of the Finance Act 1963 treated, for any purpose, as paying in respect of land comprised in the lease, and such rent shall be treated for the purposes of this section as having been paid from day to day as it has become due.

• (11) For the purposes of this section the following persons shall be deemed to be associated with one another, that is—

• (a) the transferor in any such transaction as is described in subsection (1) or subsection (2) of this section, and the transferor in another such transaction, if those two persons are acting in concert, or if the two transactions are in any way reciprocal, and any person who is an associate of either of those associated transferors;

• (b) any two or more bodies corporate participating in, or incorporated for the purposes of, a scheme for the reconstruction of any body or bodies corporate or for the amalgamation of any two or more bodies corporate;

• (c) any persons who are associates as defined in Schedule 7 to this Act.

• (12) In this section—

• (a) " lease " includes an underlease, sublease or any tenancy or licence, and any agreement for a lease, underlease, sublease or tenancy or licence and, in the case of land outside the United Kingdom, any interest corresponding to a lease as so defined; and, in relation to such land, expressions in this section relating to interests in land and their disposition shall be construed accordingly; and

• (b) " rent" includes any payment made under a lease as so defined.

• (13) The kinds of deductions by way of income tax relief to which this section applies are as follows—

• (a) any of the kinds of deductions described in section 17 of this Act, and

• (b) a deduction in computing profits or gains chargeable under Case VIII of Schedule D allowable by virtue of Schedule 4 to the Finance Act 1963.

Tax treatment of receipts and outgoings on sale of land

20

• (1) Where by virtue of a contract for the sale of an estate or interest in land there falls to be apportioned between the parties a receipt or outgoing in respect of the estate or interest which becomes due after the making of the contract but before the time to which the apportionment falls to be made, and a part of the receipt is therefore receivable by the vendor in trust for the purchaser or, as the case may be, a part of the outgoing is paid by the vendor as trustee for the purchaser, the purchaser shall be treated for the purposes of tax under Case VIII of Schedule D as if that part had become receivable or payable on his behalf immediately after the time to which the apportionment falls to be made.

• (2) Where by virtue of such a contract there falls to be apportioned between the parties a receipt or outgoing in respect of the estate or interest which became due before the making of the contract, the parties shall be treated for the purposes of tax under Case VIII of Schedule D as if the contract had been entered into before the receipt or outgoing became due, and subsection (1) above shall apply accordingly.

• (3) Where on the sale of an estate or interest in land there is apportioned to the vendor a part of a receipt or outgoing in respect of the estate or interest which is to become receivable or be paid by the purchaser after the making of the apportionment, then for the purposes of tax under Case VIII of Schedule D—

• (a) when the receipt becomes due or, as the case may be, the outgoing is paid, the amount of it shall be treated as reduced by so much thereof as was apportioned to the vendor;

• (b) the part apportioned to the vendor shall be treated as if it were of the same nature as the receipt or outgoing and had become receivable, or had been paid, directly by him immediately before the time to which the apportionment is made and, where it is a part of an outgoing, had become due immediately before that time.

• (4) Any reference in subsection (1) or (2) above to a party to a contract shall include a person to whom the rights and obligations of that party under the contract have passed by assignment or otherwise.

• (5) This section shall apply as respects tax under Case VI of Schedule D in a case falling within section 15(4) (furnished lettings) of the Finance Act 1963 as it applies as respects tax under Case VIII of Schedule D in other cases.

Distribution of assets of body corporate carrying on mutual business

21

• (1) Where in the year 1964-65 or any subsequent year of assessment any person receives any money or money's worth—

• (a) forming part of the assets of a body corporate, other than assets representing capital, or

• (b) forming part of the consideration for the transfer of the assets of a body corporate, other than assets representing capital, as part of a scheme of amalgamation or reconstruction which involves the winding up of the body corporate, or

• (c) consisting of the consideration for a transfer or surrender of a right to receive anything falling under paragraph (a) or (b) above, being a receipt not giving rise to any charge to income tax on the recipient apart from this section,

and the body corporate has at any time carried on a trade which consists of or includes the conducting of any mutual business (whether confined to members of the body corporate or not), and is being or has been wound up or dissolved, the provisions of this section shall apply to the receipt.

• (2) If a transfer or surrender of a right under subsection (1)(c) of this section is not at arm's length, the person making the transfer or surrender shall, for the purposes of this section, be deemed then to have received consideration equal to the value of the right.

• (3) If in respect of a payment of any amount made to the body corporate for the purposes of its mutual business any deduction has been allowed for the purposes of income tax in computing the profits or gains or losses of a trade, then—

• (a) if at the time of the receipt the recipient is the person, or one of the persons, carrying on that trade, the amount or value of the receipt shall be treated for the purposes of income tax (and for the purposes of the profits tax) as a trading receipt of that trade, and

• (b) if at the time of the receipt the recipient is not the person, or one of the persons, carrying on that trade, but was the person, or one of the persons carrying on that trade when any payment was made to the body corporate for the purposes of its mutual business in respect of which a deduction was allowed for the purposes of income tax in computing the profits or gains or losses of the trade, the recipient shall, subject to the provisions of subsection (5) of this section, be charged under Case VI of Schedule D for the year of assessment in which the receipt falls on an amount equal to the amount or value of the receipt.

Paragraph (a) of this subsection applies notwithstanding that, as a result of a change in the persons carrying on the trade, the profits or gains are under section 19(1) of the Finance Act 1953 determined as if it had been permanently discontinued and a new trade set up and commenced.

• (4) Where an individual is chargeable to tax by virtue of subsection (3)(b) of this section and the profits or gains of the trade there mentioned fell to be treated as earned income for the purposes of the Income Tax Act 1952, the sums in respect of which he is so chargeable shall also be treated for those purposes as earned income.

• (5) If the trade mentioned in subsection (3)(b) of this section was permanently discontinued before the time of the receipt, then in computing the charge to tax under the said subsection (3)(b) there shall be deducted from the amount or value of the receipt—

• (a) any loss, expense or debit (not being a loss, expense or debit arising directly or indirectly from the discontinuance itself) which, if the trade had not been discontinued, would have been deducted in computing for tax purposes the profits or gains or losses of the person by whom it was carried on before the discontinuance, or would have been deducted from or set off against those profits as so computed, and

• (b) any allowance under Part X or Part XI of the Income Tax Act 1952 to which the person who carried on the trade was entitled immediately before the discontinuance and to which effect has not been given by way of relief before discontinuance.

Relief shall not be given under this subsection or under section 32(4) of the Finance Act 1960 (receipts accruing after discontinuance of trade) in respect of any loss, expense, debit or allowance if and so far as it has been so given by reference to another charge to tax under this section or the said section 32.

• (6) For the purposes of subsection (1) of this section assets representing capital consist of—

• (a) assets representing any loan or other capital subscribed, including income derived from any investment of any part of that capital, but not including profits from the employment of that capital for the purposes of the mutual business of the body corporate,

• (b) assets representing any profits or gains charged to tax as being profits or gains of any part of the trade carried on by the body corporate which does not consist of the conducting of any mutual business,

• (c) (so far as not comprised in the paragraphs above) assets representing taxed income from any investments.

• (7) In this section " mutual business " includes any business of mutual insurance or mutual trading.

• (8) Subsections (3), (4) and (5) of this section shall apply with any necessary modifications—

• (a) to a profession or vocation, and

• (b) to the occupation of woodlands the profits or gains of which are assessable under Schedule D,

as they apply to a trade.

• (9) The provisions of this section apply whether the time when the payment was made to the body corporate fell before or after the passing of this Act.

• (10) It is hereby declared that the description of trades in subsection (1) of this section does not include any trade all the profits or gains of which are chargeable to income tax and, in particular, does not include such a trade carried on by any registered industrial and provident society.

PART III — MISCELLANEOUS

Amendments of Sugar Act 1956

22

Exemption of service contracts from stamp duty

23

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Transfer etc. of Government stock entered in Dublin register

24

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

Exchequer payments to trustee savings banks for managing Government stock

25

Short title, construction, extent and repeal

26

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SCHEDULES 1—4

SCHEDULE 2

SCHEDULE 3

SCHEDULE 4

SCHEDULE 5

SCHEDULE 6

PART I — Purposes for which Regulations may be made under Section 6(5) of this Act

As to grant of relief under section 6(1), (2) or (4)

1

Regulating the approval of persons for purposes of section 6(1), (2) or (4) of this Act, whether individually or by reference to a class, and whether in relation to particular descriptions of oils or generally; enabling approval to be granted subject to conditions and providing for the conditions to be varied, or the approval revoked, for reasonable cause.

2

Enabling permission under section 6(1) of this Act to be granted subject to conditions as to the giving of security and otherwise, and providing that where permission is given thereunder in the case of any oils no allowance thereon shall be paid under section 206 of the Customs and Excise Act 1952.

3

Requiring claims for repayment under section 6(2) of this Act to be made at such times and in respect of such periods as are prescribed ; providing that no such claim shall lie where the amount to be paid is less than the prescribed minimum ; and preventing, where such a claim lies, the payment of drawback or of an allowance under the said section 206.

As to mixing of oils

4

Imposing restrictions, in lieu of those contained in section 208(1) of the Customs and Excise Act 1952, on the mixing with other oils of any rebated oils or oils delivered without payment of duty.

As to marking of oils

5

Prescribing the substances which are to be used as markers.

6

Providing that the presence of a marker shall be disregarded if the proportion in which it is present is less than that prescribed for the purposes of this paragraph.

7

Requiring as a condition of allowing rebate on, or delivery without payment of duty of, any oils (subject to any exceptions provided by or under the regulations) that there shall have been added to those oils, at such time, in such manner and in such proportions as may be prescribed, one or more prescribed markers, with or without a prescribed colouring substance (not being a prescribed marker), and that a declaration to that effect is furnished.

8

Prohibiting the addition to any oils of any prescribed marker or prescribed colouring substance except in such circumstances as may be prescribed.

9

Prohibiting the removal from any oils of any prescribed marker or prescribed colouring substance.

10

Prohibiting the addition to oils of any substance, not being a prescribed marker, which is calculated to impede the identification of a prescribed marker.

11

Regulating the storage or movement of prescribed markers.

12

Requiring any person who adds a prescribed marker to any oils to keep in such manner and to preserve for such period as may be prescribed such accounts and records in connection with his use of that marker as may be prescribed, and requiring the production of the accounts and records.

13

Requiring, in such circumstances or subject to such exceptions as may be prescribed, that any drum, storage tank, delivery pump or other container or outlet which contains any oils in which a prescribed marker is present shall be marked in the prescribed manner to indicate that the oils are not to be used as road fuel or for any other prohibited purpose.

14

Requiring any person who supplies any oils in which a prescribed marker is present to deliver to the recipient a document containing a statement in the prescribed form to the effect that the oils are not to be used as road fuel or for any other prohibited purpose.

15

Prohibiting the sale of any oils the colour of which would prevent any prescribed colouring substance from being readily visible if present therein.

16

Prohibiting the importation of oils in which any prescribed marker, or any other substance which is calculated to impede the identification of a prescribed marker, is present.

As to control of storage, supply etc. of oils, entry of premises, etc.

17

Regulating the storage or movement of oils.

18

Restricting the supplying of oils in respect of which rebate has been allowed and not repaid or on which duty has not been paid.

19

Requiring a person owning or possessing a vehicle to which section 200 of the Customs and Excise Act 1952 applies which is constructed or adapted to use heavy oils as fuel to keep such accounts and records in such manner as may be prescribed, and to preserve such books and documents relating to the supply of heavy oils to or by him, or the use of heavy oils by him, for such period as may be prescribed.

20

Requiring the production of books or documents relating to the supply or use of oils or the use of any vehicle.

21

Authorising the entry and inspection of premises, other than private dwelling houses, and the examination of vehicles, and authorising, or requiring the giving of facilities for, the inspection of oils found on any premises entered or on or in any vehicle and the taking of samples of any oils inspected.

Interpretation

22

In this Part of this Schedule—

• " oils " means hydrocarbon oils ;

• " prescribed " means prescribed by regulations made under section 6(5) of this Act;

and subsection (8)(a) of section 200 of the Customs and Excise Act 1952 shall apply for the purposes of paragraph 19 above as it applies for the purposes of that section.

PART II — Amendment of Section 200(3) and (4) of Customs and Excise Act 1952

23

In subsection (3) of the said section 200, for the words from " and if any heavy oils are sold" to the end of the subsection there shall be substituted the words " and any person who supplies heavy oils having reason to believe that they will be put to a particular use shall be liable to a penalty as aforesaid where that use would, if a payment under the last foregoing subsection were not made in respect of the oils, contravene that subsection:

24

In subsection (4) of that section—

• (a) for the word " sold" there shall be substituted the word " supplied "; and

• (b) after the word " subsection" there shall be inserted the words " or taken as fuel into a vehicle to which this section does not apply and remaining therein as part of the fuel supply of the vehicle when it becomes one to which this section applies ".

PART III — Restrictions on Use of Oils to which Section 6(1) or (4) of this Act applies

25

Except with the consent of the Commissioners, no oil in the case of which delivery without payment of duty has been permitted under section 6(1) of this Act shall be used otherwise than as mentioned in paragraph (a) thereof or be acquired or taken into any vehicle, appliance or storage tank for use otherwise than as so mentioned, and in giving their consent the Commissioners may impose such conditions as they think fit.

26

• (1) Any person who uses or acquires oil in contravention of paragraph 25 above, or is liable for oil being taken into a vehicle, appliance or storage tank in contravention of that paragraph, shall be liable to a penalty of three times the value of the oil or one hundred pounds whichever is the greater, and the Commissioners may recover from him an amount equal to the customs duty on like oils at the rate in force at the time of the contravention ; and any person who supplies oil having reason to believe that it will be used otherwise than as mentioned in section 6(1)(a) of this Act shall if that use without consent of the Commissioners would contravene paragraph 25 above, be liable to a penalty as aforesaid:

Provided that where the act in respect of which a person is liable to a penalty under this sub-paragraph was done (whether by him or any other person) with the intent by him that the restrictions imposed by paragraph 25 above should be contravened, he shall be liable to the said penalty, or to imprisonment for a term not exceeding two years, or to both.

• (2) A person shall be liable for oil being taken into a vehicle, appliance or storage tank in contravention of paragraph 25 above if he is at the time the person having the charge of the vehicle, appliance or storage tank or the owner thereof, except that if a person other than the owner is, or is for the time being, entitled to possession of it, that person and not the owner shall be liable.

27

Any oil acquired, taken into a vehicle, appliance or storage tank, or supplied as mentioned in paragraph 26(1) above shall be liable to forfeiture.

28

Paragraphs 25 to 27 above shall apply in relation to oil in the case of which rebate under section 6(4) of this Act has been allowed as if—

• (a) references to delivery permitted under section 6(1) of this Act referred to rebate allowed under the said section 6(4), and references to paragraph (a) of section 6(1) referred to section 6(4); and

• (b) the amount recoverable by the Commissioners under paragraph 26(1) were the amount of the rebate allowed.

PART IV — Sampling

29

• (1) Part II of Schedule 2 to the Finance Act 1960 shall be amended as follows.

• (2) For sub-paragraphs (a) and (b) of paragraph 1 there shall be substituted the following:—

(a) if he takes it from a motor vehicle, shall if practicable do so in the presence of a person appearing to him to be the owner or person for the time being in charge of the vehicle; (b) if he takes the sample on any premises but not from a motor vehicle, shall if practicable take it in the presence of a person appearing to him to be the occupier of the premises or for the time being in charge of the part of the premises from which it is taken

.

• (3) For paragraph 2(2)(a) there shall be substituted the following:—

(a) delivered one part to the person in whose presence the sample was taken in accordance with the foregoing paragraph, if he requires it;

.

• (4) After paragraph 6 there shall be inserted the following paragraph (which reproduces the effect of section 9(7) of the Finance Act 1960):—

(7) This Part of this Schedule shall have effect, in its application to a vehicle of which a person other than the owner is, or is for the time being, entitled to possession, as if for references to the owner there were substituted references to the person entitled to possession.

.

30

The said Part II, as so amended, shall have effect with respect to any sample of hydrocarbon oils taken in pursuance of regulations made under section 6(5) of this Act.

SCHEDULE 7

PART I

Meaning of " capital sum "

1

In section 17 of this Act (in this Schedule referred to as " the principal section ") " capital sum " means any sum of money, or any money's worth, except so far as it or any part of it is to be treated for the purposes of income tax as a receipt to be taken into account in computing the profits or gains or losses of a trade, profession or vocation, or profits or gains or losses arising from woodlands, or is, apart from the principal section, chargeable under Case VI of Schedule D.

Transactions amounting to the obtaining of a capital sum

2

• (1) References in the principal section to a sum obtained in respect of the lessee's interest in a lease of an asset, or in respect of any other interest in an asset include—

• (a) in the case of a lessee's interest, references to sums representing the consideration in money or money's worth obtained on a surrender of the rights to the lessor, or on an assignment of the lease, or on creating a sublease or any other interest out of the lease, and

• (b) references to any insurance moneys payable in respect of the asset, so far as payable to the owner of the interest in the asset.

• (2) Such references also include references to sums representing money or money's worth obtained by the person entitled to the interest by a transaction or series of transactions disposing of the asset, or of an interest in the asset, and in particular transactions which comprise arrangements under which the rights of the lessee under a lease of the asset are merged in any way with the rights of the lessor, or with any other rights as respects the asset, so far as the money or money's worth so obtained is attributable to the rights of the lessee under the lease.

Transactions not at arm's length

3

• (1) References in the principal section to sums obtained in respect of any interest in an asset include references to money or money's worth so obtained in any transaction (including a transaction of the kind described in paragraph 2 of this Schedule) by way of consideration received by a person who is an associate (as defined in this Schedule) of the person entitled to the interest in the asset.

• (2) If an interest in the asset is disposed of by any person to a person who is his associate (as defined in this Schedule), the person disposing of the interest shall (unless in fact he obtains a greater sum) be treated for the purposes of the principal section as having obtained in respect of the interest—

• (a) the value of the interest in the open market, or

• (b) the value of the interest to the person to whom it is. in effect, transferred,

whichever is the greater.

• (3) For the purposes of this paragraph a disposition may be direct or indirect and may be effected by any such transaction as is described in paragraph 2(2) of this Schedule.

Partnerships and joint interests

4

• (1) For the purposes of the principal section and this Schedule any sum obtained by persons carrying on a trade, profession or vocation in partnership in respect of an interest in an asset which is and continues to be used for the purposes of the trade, profession or vocation shall be regarded as apportionable between them in the shares in which they are then entitled to the profits of the trade, profession or vocation.

• (2) Subject to the foregoing sub-paragraph, for those purposes a sum obtained by persons jointly entitled to an interest in an asset shall be apportionable according to their respective interests in the rights.

• (3) For the said purposes, any payment in respect of which a deduction is allowable by way of income tax relief which is made by persons carrying on a trade, profession or vocation in partnership shall be apportioned in such manner as may be just.

• (4) Section 329(1) of the Income Tax Act 1952 (Commissioners having jurisdiction in questions of apportionment) shall apply for determining any question arising under this Schedule as to the manner in which any sum or payment is to be apportioned.

Meaning of " associate "

5

For the purposes of this Schedule, and in construing the expressions " associate " and " associated " in the principal section and this Schedule, the following persons shall be deemed to be associated with each other, that is to say.—

• (a) any individual and that individual's husband or wife, and any relative, or husband or wife of a relative, of that individual or of that individual's husband or wife (" relative" meaning for this purpose brother, sister, ancestor or lineal descendant);

• (b) any person in his capacity of trustee of a settlement and any individual who in relation to the settlement is a settlor, and any person associated with that individual (" settlement" and " settlor " having for this purpose the meanings assigned to them by section 403 of the Income Tax Act 1952);

• (c) any person and a body of persons of which that person, or persons associated with him, or that person and persons associated with him, has or have control;

• (d) any two or more bodies of persons associated with the same person by virtue of paragraph (c) above ;

• (e) in relation to a disposal by joint owners, the joint owners and any person associated with any of them.

Additional capital sum in respect of same interests

6

• (1) So far as in respect of a capital sum—

• (a) any part of a payment allowed as a deduction by way of income tax relief of a kind to which the principal section applies is taken into account in making an assessment under subsection (1) of the principal section, or

• (b) any part of a payment allowed as a deduction in computing profits or losses for the purposes of the profits tax is taken into account in treating income as arising under subsection (2) of the principal section for the purposes of the profits tax,

that part of the payment shall be left out of account in determining whether any and if so what amount should be assessed, or treated as arising as income chargeable to the profits tax, by reference to any other capital sum ; and the order in which this paragraph is applied shall be the order in which the capital sums are obtained.

• (2) In this paragraph references to any deduction allowable in computing the profits or losses of a trade or business include references to a deduction which would be so allowable but for the provisions of section 42(5) of the Finance Act 1938.

Consequential adjustments of income tax and the profits tax

7

• (1) There shall be made all such adjustments of income tax and of the profits tax, whether by way of making assessments or by repayment of tax, as are required after the making of any such payment as is described in subsection (1) or subsection (2) of the principal section to give effect to the charge under the said subsection (1) or, as the case may be, to charge income arising under the said subsection (2), in respect of a sum obtained before the making of the payment.

• (2) Notwithstanding anything in the Income Tax Acts or the enactments relating to the profits tax limiting the time within which an assessment may be made or a claim for relief may be admitted any such adjustment may be made, by making an assessment or otherwise, at any time not more than six years from the end of the year of assessment (or, in relation to the profits tax, from the end of the chargeable accounting period) in which the payment was made.

PART II

Hire-purchase agreements

8

• (1) If the lease constitutes a hire-purchase agreement, for the references in the provisos to subsections (1) and (2) of the principal section to the amount of the capital sum there shall, where that capital sum was obtained in respect of the lessee's interest in the lease constituting the hire-purchase agreement, be substituted references to the amount of the capital sum (adjusted, if necessary, under subsection (5) of the principal section) after deducting any capital expenditure which was incurred by the person obtaining the capital sum in providing the lessee's interest and which is, for capital allowance purposes, still unallowed at the time when the assignment or other transaction takes place in respect of which the capital sum is obtained.

• (2) In this paragraph " capital expenditure incurred by the person obtaining the capital sum in providing the lessee's interest" means—

• (a) so much of any payment made under the lease by the person obtaining the capital sum (or, where the capital sum was obtained by the personal representatives of a deceased person, so made by that deceased person) as is not a payment in respect of which a deduction is allowable by way of income tax relief which is one of the kinds listed in subsection (4) of the principal section, plus

• (b) where the lessee's interest was assigned to the person obtaining the capital sum, any capital payment made by that person as consideration for the assignment.

• (3) In this paragraph the reference to the amount of capital expenditure which is, for capital allowance purposes, still unallowed at the said time shall be construed as a reference to the amount of the capital expenditure after deducting any amount which, under section 297 of the Income Tax Act 1952 (definition of " expenditure unallowed " for purposes of capital allowances for machinery and plant), would be deductible in ascertaining as at that time the amount still unallowed of expenditure incurred by the said person in providing the leased asset.

• (4) If the amount to be deducted in pursuance of sub-paragraph (1) of this paragraph exceeds the amount of the capital sum from which it is to be deducted, no charge shall arise under subsection (1) or subsection (2) of the principal section in respect of the capital sum.

Disposition of part of rights under hire-purchase agreement

9

• (1) If the capital sum represents the consideration for part only of the lessee's interest in the lease which constitutes a hire-purchase agreement, the amount to be deducted under paragraph 8(1) of this Schedule shall be such proportion of the capital expenditure which is still unallowed as is reasonable having regard to the degree to which the capital expenditure has contributed to the value of what is disposed of in return for the capital sum.

• (2) If more than one capital sum is, or is to be regarded as, obtained by the same person in respect of the lessee's interest in the lease which constitutes a hire-purchase agreement, then, so far as in respect of one of those capital sums any deduction is made in respect of capital expenditure in pursuance of paragraph 8(1) of this Schedule, that capital expenditure shall be left out of account in applying paragraph 8 of this Schedule to any other such capital sum ; and the order in which this sub-paragraph is applied shall be the order in which the capital sums are obtained.

Meaning of " hire-purchase agreement"

10

• (1) In this Part of this Schedule " hire-purchase agreement" has the same meaning as in the Hire-Purchase Act 1938.

• (2) In Scotland, for the foregoing definition there shall be substituted the following definition—

• " hire-purchase agreement " means any contract, in whatsoever terms it may be expressed, whereby goods are taken on hire by one person from another person in consideration of periodical payments to be made by the first mentioned person to the other person, with an option to the first mentioned person to become the buyer of the goods.

SCHEDULE 8

THE FINANCE ACT 1942 — (5 & 6 Geo. 6. c. 21)

1

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

2

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

3

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

THE INCOME TAX ACT 1952 — (15 & 16 Geo. 6 & 1 Eliz. 2. c. 10)

4

For the words "Government stock registered or inscribed in the books of the Bank of Ireland in Dublin " wherever occurring in section 117 and paragraph 6 of Part I of Schedule 8, there shall be substituted the words " securities of the United Kingdom Government entered in the register of the Bank of Ireland in Dublin ".

5

In section 121, the definition of "Government stock registered or inscribed in the books of the Bank of Ireland in Dublin " shall be omitted.

6

In section 196(6), for the words "registered in the books of the Bank and includes ' inscribed'" there shall be substituted the words " entered in the register of the Bank ".

7

Paragraphs 4 to 6 above shall apply only in relation to years of assessment beginning not earlier than the coming into operation of the first regulations made after the passing of this Act under section 47 of the Finance Act 1942.

THE MISCELLANEOUS FINANCIAL PROVISIONS ACT 1955 — (4 & 5 Eliz. 2. c. 6)

8

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

9

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

THE STOCK TRANSFER ACT 1963 — (1963 c. 18)

10

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

SCHEDULE 9

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13

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

THE FINANCE ACT 1942 — (5 & 6 Geo. 6 c. 21)

4

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

THE MISCELLANEOUS FINANCIAL PROVISIONS ACT 1955 — (4 & 5 Eliz. 2 c. 6)

THE STOCK TRANSFER ACT 1963 — (1963 c. 18)

1

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

2

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

3

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

4

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

Editorial notes