Finance Act 1966

Part I — Customs and Excise

Reliefs, drawback, exemptions, etc.

Relief from duty on imported goods.

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Reliefs for shipbuilders in respect of certain duties.

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Drawback on tobacco.

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Exemption of E.F.T.A. goods from duties on hop oil and hop extracts.

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Removal of restriction on delivery of imported vodka for home use.

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As from 1st September 1966, section 109(1) of the Act of 1952 (which provides that no spirits shall be delivered for home use unless they have been warehoused for a period of at least three years) shall not apply to imported vodka consisting of spirits which have had a flavour communicated thereto or an ingredient or material mixed therewith.

Rebate of duty on heavy oils.

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Eligibility of imported goods for rates of revenue duties applicable to goods of Republic of Ireland.

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Vehicles excise duty.

Unladen weight of vehicles: special bodies.

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Export rebates.

Restriction on export rebates for goods consigned to Convention area.

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Hover vehicles and pipe-lines.

Customs procedures: hover vehicles and related matters.

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Pipe-lines.

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• (1) Goods shall not be imported or exported by means of a pipe-line that is not for the time being approved by the Commissioners for the purposes of this section, and uncleared goods shall not be moved by means of a pipe-line that is not for the time being so approved.

• (2) All goods imported by means of a pipe-line and chargeable with a duty of customs shall be entered for warehousing, and in the customs and excise Acts the expression " the importer " in relation to goods imported by means of a pipe-line shall include the owner of the pipe-line.

• (3) For the purposes of the customs and excise Acts—

• (a) goods imported by means of a pipe-line shall be treated as imported at the time when they are brought within the limits of a port or brought across the boundary into Northern Ireland, and

• (b) goods exported by means of a pipe-line shall be treated as exported at the time when they are charged into that pipe-line for exportation.

• (4) In the customs and excise Acts the expressions " shipping " and " loading " and cognate expressions, where used in relation to importation or exportation shall include, in relation to importation or exportation by means of a pipe-line, the conveyance of goods by means of the pipe-line and the charging and discharging of goods into and from the pipe-line, but subject to any necessary modifications; and any power of making regulations or other instruments relating to the importation or exportation of goods conferred by those Acts may be exercised so as to make provision for the importation or exportation of goods by those means which is different from the provision made for the importation or exportation of goods by other means.

• (5) For goods exported by means of a pipe-line the period for delivery of a specification of the goods under section 49 of the Act of 1952 shall be six days from the time when the goods are charged into the pipe-line for exportation or such longer period as the Commissioners may direct.

• (6) The Commissioners may give their approval under subsection (1) above for such period and subject to such conditions as they think fit and may at any time for reasonable cause—

• (a) vary the terms of their approval, and

• (b) (provided that they have given to the owner of the pipeline not less than three months' written notice of their intention so to do) revoke their approval.

Section 49 of the Pipe-lines Act 1962 shall apply to a notice required by this subsection to be served on the owner of a pipe-line as it applies to a document required by that Act to be so served.

• (7) A person who—

• (a) contravenes subsection (1) above, or contravenes or fails to comply with a condition imposed by the Commissioners under the last foregoing subsection, or

• (b) except with the authority of the proper officer or for just and sufficient cause, obtains access to goods which are in, or in course of conveyance by, an approved pipe-line,

shall be liable to a penalty of five hundred pounds or to imprisonment for a term not exceeding two years or to both and may be detained; and any goods in relation to which the offence was committed may be forfeited.

• (8) Where goods of any of the following descriptions—

• (a) goods which are chargeable with a duty which has not been paid,

• (b) goods on which duty has been repaid or remitted in whole or in part, and

• (c) goods on which drawback has been paid,

are moved by pipe-line, or notified to the proper officer as being goods to be moved by pipe-line, and are at any time thereafter found to be missing or deficient, then, unless it is shown to their satisfaction that the absence or deficiency can be accounted for by natural waste or other legitimate cause, the Commissioners may require the owner of the pipe-line or the proprietor of the goods to pay immediately in respect of the missing goods, or in respect of the whole or any part of the deficiency as they see fit, the amount of the duty unpaid or repaid thereon or, as the case may be, an amount equal to the drawback paid thereon; and any person who, on the written demand of an officer, refuses to pay any sum which he is required to pay under this subsection shall in addition be liable to a penalty of double that sum.

For the purposes of this subsection any absence or deficiency in the case of goods moved by a pipe-line used for the importation or exportation of goods shall be deemed to have taken place within the United Kingdom unless the contrary is shown; and the provisions of this subsection shall have effect without prejudice to any penalty or forfeiture incurred under any other provision of this section or elsewhere in the customs and excise Acts.

• (9) Section 82(3) of the Act of 1952 (protection for Commissioners and their officers from claims for loss or damage to goods in a warehouse, or for unlawful removal from a warehouse) shall have effect so as to protect the Commissioners and their officers, save in corresponding circumstances, from claims for loss or damage to goods in a pipe-line or for unlawful removal of goods from a pipe-line, references to a pipe-line, to goods in a pipeline and to the owner of the pipe-line being substituted for references respectively to a warehouse, the warehoused goods and to the occupier of the warehouse.

• (10) In this section—

• " pipe-line " has the meaning assigned thereto by section 65 of the Pipe-lines Act 1962,

• " owner ", in relation to a pipe-line, means (except in the case of a pipe-line vested in the Crown which in pursuance of arrangements in that behalf is operated by another) the person in whom the line is vested and, in the said excepted case, means the person operating the line, and

• " uncleared goods " means imported goods, whether or not chargeable with a duty of customs, which have not been cleared from customs charge, and in particular goods which are or are to be moved under section 22 of the Act of 1952, and dutiable goods moved from warehouse without payment of duty.

• (11) In the application of this section to Northern Ireland references to the Pipe-lines Act 1962 shall have effect as if that Act extended to Northern Ireland.

Duties relating to betting and gaming.

General betting duty.

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

• (6) The pool betting duty shall not be chargeable on any bet made as mentioned in subsection (1)(c) of this section on or after 24th October 1966, and accordingly from that date—

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

• (b) paragraph 4(a)(i) of Schedule 5 to the Betting, Gaming and Lotteries Act 1963 (which relates to the disposal of amounts staked by means of a totalisator on a dog racecourse) for the words “pool betting duty” there shall be substituted the words “general betting duty” ;

Gaming licence duty.

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Gaming machine licence duty.

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Additional or supplementary provisions as to duties on betting or gaming.

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

• (5) The supplemental provisions set out in Schedule 3 to this Act shall have effect with respect to the duties relating to betting and gaming.

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

Surcharges and rebates in respect of revenue duties.

Continuation of powers under s. 9 of Finance Act 1961.

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Part II

Charge of income tax for 1966-67.

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Surtax rates for 1965-66.

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Income tax for the year 1965-66 shall be charged, in the case of an individual whose total income exceeded £2,000, in respect of the excess at rates in the pound which respectively exceed the standard rate by the amounts by which the higher rates for the year 1964-65 exceeded the standard rate for that year.

Exemption from tax of social security benefit.

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Benefit under any Act of the present Session establishing a Ministry of Social Security and providing for benefits eligibility for which is to be determined by a Supplementary Benefits Commission established by the Act, or under any Act of the Parliament of Northern Ireland providing for corresponding benefits, shall not be regarded as income for any income tax purposes.

Exclusion from relief of interest on Post Office investment deposits.

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In section 9(1) of the Finance Act 1956 (relief from income tax on certain savings bank interest) the reference to deposits with the Post Office savings bank shall not include a reference to investment deposits as defined in section 1(2) of the Post Office Savings Bank Act 1966.

Personal reliefs for non-residents.

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• (1) This section has effect as respects the application of the proviso to section 227(2) of the Income Tax Act 1952 (under which certain non-residents are eligible for the personal reliefs from income tax subject to an adjustment made by reference to the amount of income tax payable on certain assumptions) to an individual whose income includes any dividends, interest, royalties or other profits (in this section referred to as income eligible for double taxation relief) which are chargeable to income tax but in respect of which relief (other than credit) is available under an Order in Council under section 347 of the Income Tax Act 1952, or under section 31 of this Act, so as to limit the rate of income tax so chargeable (but not so as to confer an exemption and make it income which is not subject to income tax charged in the United Kingdom).

• (2) Subject to subsection (3) below, for the purposes of the said proviso—

• (a) in computing the amount of the income tax payable by the individual the tax chargeable in respect of the income eligible for double taxation relief shall be disregarded,

• (b) in computing the amount of his income subject to income tax charged in the United Kingdom the income eligible for double taxation relief shall be disregarded, and

• (c) in computing his total income from all sources, including income which is not subject to income tax charged in the United Kingdom, income eligible for double taxation relief shall be included and the income tax which would be chargeable on that total income shall be computed without regard to the double taxation relief available in respect of the income eligible for double taxation relief,

and accordingly where this subsection applies the amount of the tax chargeable in respect of the income eligible for double taxation relief shall not be affected by the said section 227(2).

• (3) This section shall not operate so as to make the tax payable by an individual for a year of assessment higher than it would have been if the double taxation relief had not been available.

• (4) This section has effect as respects the year 1966-67 and subsequent years of assessment.

India, Pakistan and Burma pensions.

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• (1) Section 40(1)(a) of the Finance Act 1956 (which exempts from income tax a pension paid under the authority of the Pensions (India, Pakistan and Burma) Act 1955 if it is the income of a person not resident in the United Kingdom, but not the part of the pension paid by virtue of the Pensions (Increase) Act 1962 or earlier Pensions (Increase) Acts) shall have effect subject to the provisions of this section.

• (2) The said section 40(1) shall not apply to so much of any pension of the description in paragraph (a) thereof as is paid by virtue of the application to the pension of the Pensions (Increase) Act 1965 or of any Act passed after this Act for purposes corresponding to the purposes of the said Act of 1965.

Surtax on income under certain settlements: exceptions to s. 415(1) of Act of 1952.

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• (1) Notwithstanding section 12(1) of the Finance Act 1965 (which extends section 415(1) of the Income Tax Act 1952 so as to treat certain income arising under a settlement as being for surtax purposes the income of the settlor) the said section 415(1) shall not apply to income consisting of annual payments made under a partnership agreement to or for the benefit of a former member, or the widow or dependants of a deceased former member, of the partnership, being payments made under a liability incurred for full consideration.

• (2) Notwithstanding the said section 12(1), the said section 415(1) shall not apply to income consisting of annual payments made by an individual, in connection with the acquisition by him of the whole or part of a business—

• (a) to or for the benefit of the individual from whom it is acquired or, if he is dead, to or for the benefit of his widow or dependants, or

• (b) if the acquisition was from a partnership, to or for the benefit of a former member, or the widow or dependants of a deceased former member, of that or any preceding partnership, or to or for the benefit of an individual from whom the business or part was acquired by that or any preceding partnership or, if he is dead, to or for the benefit of the widow or dependants of such an individual,

being payments made under a liability incurred for full consideration.

• (3) Payments made in respect of any individual under a liability incurred in connection with an acquisition from a partnership shall only be excluded from the operation of the said section 415(1) by virtue of paragraph (b) of the last foregoing subsection if, and to the extent that, they are made in substitution for, or matched by reductions in, other payments which would themselves be excluded from its operation.

• (4) Where the right of a former member of a partnership to payments falling due not more than ten years after he ceased to be a member of that partnership has devolved on his death, subsections (1) and (2) above shall apply to the payments as they would apply if he had not died.

• (5) Notwithstanding the said section 12(1), the said section 415(1) shall not apply to income arising under a settlement made by one party to a marriage by way of provision for the other after the dissolution or annulment of the marriage, or while they are separated under an order of a court or under a separation agreement or in such circumstances that the separation is likely to be permanent, being income payable to or applicable for the benefit of that other party.

• (6) For the purposes of this section—

• (a) " former member ", in relation to a partnership, means an individual who has ceased to be a member of that partnership on retirement or death,

• (b) a partnership becomes a " preceding partnership " of another if it transfers its business or part of its business to another and one or more individuals are members of both, and any preceding partnership of the transferor by reference to any part of the business transferred shall also become a preceding partnership of the transferee.

• (7) This section shall be in substitution for section 12(3) of the Finance Act 1965, and shall have effect for the year 1965-66 as well as for later years of assessment.

Dividend increases etc. in 1965-66: exclusion of surtax relief under s. 238 of Act of 1952.

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• (1) Relief shall not be given under section 238 of the Income Tax Act 1952 (relief from surtax where income attributable to a period exceeding a year is received in a year) in respect of any dividends which apart from that section fall to be treated as income of the year 1965-66, being dividends paid by a company resident in the United Kingdom and not being preference dividends.

• (2) In this section—

• " company " includes any body corporate,

• " preference dividends " means dividends paid on shares which do not carry any right to dividends other than dividends at a rate per cent. of the nominal value of the shares which is fixed, or fluctuates only with the standard rate of income tax,

• " shares " includes stock.

Directors and employees of companies granted rights to acquire shares.

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• (1) Where on or after 3rd May 1966 a person realises a gain by the exercise, or by the assignment or release, of a right to acquire shares in a body corporate obtained by that person as a director or employee of that or any other body corporate he shall be chargeable to income tax under Schedule E on an amount equal to the amount of his gain as computed in accordance with this section.

• (2) Subject to subsection (8) below—

• (a) the gain realised by the exercise of any such right at any time shall be taken to be the difference between the amount that a person might reasonably expect to obtain from a sale in the open market at that time of the shares acquired and the amount or value of the consideration given whether for them or for the grant of the right, and

• (b) the gain realised by the assignment or release of any such right shall be taken to be the difference between the amount or value of the consideration for the assignment or release and the amount or value of the consideration given for the grant of the right,

(a just apportionment being made of any entire consideration given for the grant of the right to acquire those shares and other shares or otherwise for the grant of the right to acquire those shares and for something besides) :