Finance Act 1967

Part I — Customs and Excise

Termination of surcharge under Finance Act 1961 s. 9 and related increases in duties.

1

Provisions as to continental shelf.

2

Disclosure of information by Commissioners.

3

Amendments as to excise licences for certain trades.

4

Abolition of retailer's licences and club licences and consequential provisions.

5

• (1) As from 1st October 1967, an excise licence shall not be required for the sale by retail of intoxicating liquor or for the supply of such liquor in a registered club to members of that club and their guests...

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

• (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

• (3) In this section the expression “registered club” means a club ... which is a registered club within the meaning of the Licensing (Scotland) Act 1976.

Abolition of permits for spirits and tobacco and consequential provisions.

6

Pool betting duty.

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

• (8) Paragraph 13(f) of Schedule 2 to the Betting, Gaming and Lotteries Act 1963 (which requires the rules applying to any competition promoted by a registered pools promoter to be notified to the accountant appointed for the purpose by the registering authority before the first of the relevant sporting or other events takes place) shall have effect with the insertion after the word “notified” of the words “to the Commissioners of Customs and Excise and”; and if any such promoter is, under paragraph 29(2) of the said Schedule 2, guilty of an offence by reason of a failure to comply with the duty imposed on him by virtue of this subsection—

• (a) paragraph 29(3) of that Schedule (which empowers the registering authority to take proceedings for such an offence in England) shall not apply; but

• (b) sections 145 and 151 of the Customs and Excise Management Act 1979 (which relate respectively to the institution of proceedings and the application of penalties imposed and costs or, in Scotland, expenses awarded under the customs and excise Acts) shall apply in relation to that offence and to any fine imposed or costs or expenses awarded in connection therewith as if they were an offence or, as the case may be, a penalty imposed or costs or expenses awarded under the customs and excise Acts.

• (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Relief from purchase tax for certain imported goods.

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• (1) Where any goods or articles such as are mentioned in subsection (4) of section 21 of the Purchase Tax Act 1963 have been imported into the United Kingdom for a registered wholesale merchant as stock for his business or for a registered manufacturer as materials, the provisions of this section shall have effect for the purpose of giving relief from tax on any chargeable transaction in the United Kingdom after the importation of the goods or articles in lieu of the relief from tax on their importation which, but for the exception from chargeability to tax on importation contained in section 11 of that Act, would have been given under the said section 21.

• (2) If—

• (a) the importer makes application that relief be given from tax on the goods or articles on any such chargeable transaction; and

• (b) the Treasury are satisfied that, if the said exception had not been contained in the said section 11 and an application for relief had been made under subsection (1) of the said section 21, they would have given a direction under that subsection,

the Treasury may direct that tax shall not be payable on the goods or articles on any such transaction or, if it has already been paid, shall be repaid.

• (3) Subsections (2) and (3) of the said section 21 shall apply to any application or direction under subsection (2) of this section as they apply to any application or direction under subsection (1) of that section and as if the reference in the said subsection (3) to the tax of which the importer was relieved by a direction under the said subsection (1) included a reference to the tax from which relief was given by a direction under this section.

Purchase tax-vehicles acquired for export.

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• (1) If in the case of any vehicle in respect of which the tax which would otherwise be payable by the manufacturer is remitted under section 23(1) of the Purchase Tax Act 1963 (which relates to vehicles acquired for export)—

• (a) the vehicle is found in the United Kingdom after the date by which the Commissioners on granting the remission directed that it should be exported; or

• (b) any other condition imposed by the Commissioners under the said section 23(1) on granting the remission is not complied with,

and the presence of the vehicle in the United Kingdom after that date or the non-observance of that condition has not been authorised for the purposes of this section by the Commissioners, the tax which, but for the said section 23(1), would have been payable by the manufacturer shall become payable forthwith by the person by whom the vehicle was acquired from the manufacturer, or by any other person in whose possession the vehicle is found in the United Kingdom, and be recoverable as a debt due to Her Majesty unless, or except to the extent that, the Commissioners see fit to waive payment of the whole or part thereof, and the vehicle shall be liable to forfeiture under the Act of 1952.

• (2) Where a vehicle in respect of which tax has been remitted under the said section 23(1) has been exported but is subsequently brought back into the United Kingdom, then, without prejudice to subsection (1) of this section, the vehicle shall not when so brought back be treated for the purposes of section 11 of the said Act of 1963 as imported into the United Kingdom.

• (3) Section 23(2) of the said Act of 1963 (which imposes upon the manufacturer liability for tax in the event of non-observance of any conditions imposed under the said section 23(1)) shall cease to have effect.

• (4) This section shall come into force on such day as the Commissioners may by order made by statutory instrument appoint; and any such order shall be subject to annulment in pursuance of a resolution of the Commons House of Parliament.

Abolition of functions of Commissioners and officers of Customs and Excise with respect to grant of representation in the case of small estates.

10

Vehicles excise duty: increased penalties for evasion, and effect of transferring vehicle without licence.

11

• (1) The following provisions of the Vehicles (Excise) Act 1962—

• (a) section 7 (offence of using or keeping unlicensed vehicle),

• (b) section 10(4) (offence of failing to pay additional duty before using licensed vehicle so as to attract higher rate), and

• (c) section 12(9) (offence of exceeding number of vehicles authorised to be used by trade licence),

being provisions under which the person convicted is liable to an excise penalty of twenty pounds or, if greater, three times the duty there specified, shall be amended by substituting " fifty " for " twenty " and " five " for " three ".

This subsection shall not have effect in relation to offences committed before the passing of this Act.

• (2) Where a vehicle for which a licence is in force under that Act is transferred by the holder of the licence to another person, the licence shall be treated for the purposes of the said section 7 as no longer in force unless it is delivered to that other person with the vehicle.

Vehicles excise duty: additional liability for keeping unlicensed vehicle.

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• (1) Where a person convicted of an offence under section 7 of the Vehicles (Excise) Act 1962 (using or keeping an unlicensed vehicle) is the person by whom the vehicle in respect of which the offence was committed was kept at the time it was committed, the court shall, in addition to any penalty which it may impose under that section, order him to pay an amount calculated in accordance with subsections (2) to (4) below.

• (2) The said amount shall, subject to subsection (3) below, be an amount equal to one-twelfth of the annual rate of duty appropriate to the vehicle in question for each calendar month or part of a calendar month in the relevant period, and the relevant period shall be one ending with the date of the offence and beginning—

• (a) if the person convicted has before that date notified the county council of his acquisition of the vehicle in accordance with regulations under the said Act of 1962, with the date on which the notification was received by the council or, if later, with the expiry of the licence last in force for the vehicle, or

• (b) in any other case, with the expiry of the licence last in force for the vehicle before the date of the offence or, if there has not at any time before that date been a licence in force for the vehicle, with the date on which the vehicle was first kept by that person:

Provided that, where the person convicted has been ordered to pay an amount under this section on the occasion of a previous conviction in respect of the same vehicle, and the offence then charged was committed after the date specified above for the beginning of the relevant period, that period shall begin instead with the calendar month immediately following that in which the former offence was committed.

• (3) Where the person convicted proves—

• (a) that throughout any month or part of a month comprised in the relevant period the vehicle in question was not kept by him, or was neither used nor kept by him on a public road in Great Britain, or was not chargeable with duty, or

• (b) that he has paid duty in respect of the vehicle for any such month or part, whether or not on a licence,

the said amount shall be calculated as if that month or part were not comprised in the relevant period.

• (4) In relation to any month or part of a month comprised in the relevant period, the reference in subsection (2) above to the annual rate of duty appropriate to the vehicle in question is a reference to the annual rate applicable to it at the beginning of that month or part; and, except so far as it is proved to have fallen within some other class or description for the whole of any such month or part, a vehicle shall be taken for the purposes of this section to have belonged throughout the relevant period to that class or description of vehicle to which it belonged for the purposes of duty at the date of the offence or, if the prosecution so elect, the date when a licence for it was last issued.

• (5) Where, on a person's conviction of an offence under the said section 7, an order is made under Part I of the Criminal Justice Act 1948 placing him on probation or discharging him absolutely or conditionally, the foregoing provisions of this section shall apply as if the conviction were deemed to be a conviction for all purposes.

• (6) In the foregoing provisions of this section " duty " and " licence " mean respectively the duty chargeable under, and a licence issued under, the said Act of 1962 or any enactment repealed by that Act, and any reference to the expiry of a licence includes a reference to its surrender, and to its being treated as no longer in force for the purposes of the said section 7 by virtue of section 11(2) above; and, in the case of a conviction for a continuing offence, the offence shall be taken for the purposes of those provisions to have been committed on the date or latest date to which the conviction relates.

• (7) The foregoing provisions of this section shall have effect subject to the provisions (applying with the necessary modifications) of any enactment relating to the imposition of fines by magistrates' courts, other than one conferring a discretion as to their amount; and any sum payable by virtue of an order under this section shall be treated as a fine, and the order as a conviction, for the purposes of Part III of the Magistrates' Courts Act 1952 (including any enactment having effect as if contained in that Part) and of any other enactment relating to the recovery or application of sums ordered to be paid by magistrates' courts.

• (8) Any person who is alleged to have used a vehicle in contravention of the said section 7 shall, if required to do so by or on behalf of a chief officer of police or a county council, give such information as it is in his power to give as to the identity of the person by whom the vehicle was kept at the time, and a person failing to comply with a requirement under this subsection shall be guilty of an offence and liable on summary conviction to a fine not exceeding twenty pounds.

• (9) This section shall not have effect in relation to any offence committed before the passing of this Act.

• (10) In its application to Scotland, this section shall have effect as if for subsections (5) and (7) there were substituted the following subsections respectively:—

(5) Where a person is convicted on indictment of, or is charged before a court of summary jurisdiction with, an offence under the said section 7, and an order is made under Part I of the Criminal Justice (Scotland) Act 1949 discharging him absolutely or placing him on probation, the foregoing provisions of this section shall apply as if the conviction on indictment were a conviction for all purposes, or, as the case may be, the making of the order by the court of summary jurisdiction were a conviction.

(7) The foregoing provisions of this section shall have effect subject to the provisions (applying with the necessary modifications) of any enactment relating to the imposition of fines by courts of summary jurisdiction, other than one conferring a discretion as to their amount; and any sum payable by virtue of an order under this section shall be treated as a fine, and the order as a conviction, for the purposes of any enactment relating to the recovery or application of sums ordered to be paid by courts of summary jurisdiction.

PART II — Income Tax

Charge of income tax for 1967-68.

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Income tax for the year 1967-68 shall be charged at the standard rate of 8s. 3d. in the pound, and in the case of an individual whose total income exceeds £2,000 at such higher rates in respect of the excess as Parliament may hereafter determine.

Surtax rates for 1966-67.

14

Income tax for the year 1966-67 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 1965-66, without the increase made by the next following section, exceeded the standard rate for that year (and so that the surtax rates applied by this section are the same as those applied successively for the years 1951-52 to 1964- 65).

Increase of surtax rates for 1965-66.

15

• (1) Section 18 of the Finance Act 1966 (surtax rates for 1965- 66) shall have effect as if each of the surtax rates applied by that section (that is to say, each of the amounts specified in the second column of the table in section 16(1) of the Finance Act 1951, being the surtax rates applied successively for the years 1951-52 to 1964-65) were increased by ten per cent.

• (2) The surtax charged by any assessment for the year 1965-66 made before 1st September 1967 and by reference to the rates applied by the said section 18 as originally enacted shall, unless by that date a further assessment has been made in respect of the tax attributable to subsection (1) above, be treated as from that date as varied in accordance with that subsection by virtue of this Act and without more.

• (3) In relation to so much of any surtax for the year 1965-66 as is attributable to subsection (1) above—

• (a) section 229(1) of the Income Tax Act 1952 (due date for payment of surtax by individuals), and section 249(4)(a) of that Act (date for recourse to company in respect of company surtax which a member has failed to pay) shall have effect as if for the references to 1st January (that is to say, 1st January 1967) there were substituted references to 1st September 1967, and

• (b) paragraph (b) of the said section 249(4) (date for recourse to member where company fails to pay) shall have effect as if for the reference to 2nd January (that is to say, 2nd January 1967) there were substituted a reference to 2nd September 1967.

• (4) The due date for payment of so much of any surtax for the year 1965-66 as is attributable to subsection (1) above shall also be taken to be 1st September 1967, instead of 1st January 1967, for the purposes of section 58(1) of the Finance Act 1960 (interest on tax recovered to make good loss due to taxpayer's fault).

• (5) For the purposes of section 495(3) of the Income Tax Act 1952 (interest on overdue tax charged by any assessment not to be payable unless the tax exceeds one thousand pounds) the tax charged by any assessment by virtue of subsection (2) above shall be treated as if it had been charged by an assessment separately made.

• (6) Sections 359 and 360 of the said Act of 1952 (recovery of tax attributable to wife's income) shall have effect in relation to the tax charged by any assessment by virtue of subsection (2) above as if it had been charged by an assessment separately made, as if that assessment had been made before the service of any notice for the year 1965-66 under subsection (1) of the said section 360, and with any other necessary modifications.

• (7) Section 236 of the said Act of 1952 (relief where surtax payer dies in year of assessment for which surtax rates are higher than for previous year) shall, as respects surtax for the year 1965-66, apply to a person who died after the end of that year but before 21st July 1966 as it applies to a person who died in that year.

• (8) Where surtax for the year 1965-66 has been assessed on any person in the name of a company which is dissolved before the end of September 1967 (and whether before or after the passing of this Act) and, the assessment having been made by reference to the rates applied for that year by section 18 of the Finance Act 1966 as originally enacted, a notice of charge under section 249(4) of the said Act of 1952 is served on that person for the additional tax attributable to subsection (1) above, the tax to which the notice relates shall become payable by that person, without any election under the said section 249(4), on whichever of the following is the latest, that is to say, 1st September 1967, the day after the service of the notice, and the day after the dissolution of the company.

• (9) Section 21 of the Finance Act 1965 (under which the rate of capital gains tax may depend on the rates of income tax, including surtax) shall have effect as if the rates of surtax for the year 1965-66 had been those applied by the said section 18 as originally enacted.

Alterations in reliefs.

16

• (1) In section 13 of the Finance Act 1957 (relief for persons over sixty-five with small incomes), as amended by section 10(6) of the Finance Act 1965, for the references to £390 and £625 (the income limits for exemption) there shall be substituted references to £401 and £643 ; and (as regards the marginal relief) for the reference to £160 (the addition to the income limit) there shall be substituted a reference to £180.

• (2) In section 216(1) of the Income Tax Act 1952 (relief for dependent relative), as amended by section 10(3) of the Finance Act 1965, for the reference to £210 (lower income limit of dependent relative) there shall be substituted a reference—

• (a) for the year 1967-68, to £221,

• (b) for subsequent years of assessment, to £235,

and, subject to the next following subsection, for the reference to £285 (the higher income limit) there shall be substituted a reference, for the year 1967-68, to £296, and for subsequent years of assessment, to £310.

• (3) Where the claimant under section 216 of the Income Tax Act 1952 is a woman other than a married woman living with her husband,—

• (a) for the references in subsection (1) of that section to £75 there shall be substituted references to £110, and

• (b) for the reference in that subsection (limit on dependent relative's total income) to £285 there shall be substituted a reference to, for the year 1967-68, £331, and for subsequent years of assessment, £345.

• (4) Where, without subsection (3) above, the claimant's relief would fall to be reduced by any proportion under subsection (2) of the said section 216 (dependent relative jointly maintained by two or more claimants) any increase in the claimant's relief attributable to subsection (3) above shall be reduced by the same proportion; and accordingly the said subsection (2) shall be read without regard to the amendments made by subsection (3) of this section in subsection (1) of the said section 216.

• (5) In section 17(2) of the Finance Act 1960 (additional relief for widows and others in respect of children) for the reference to £40 there shall be substituted a reference to £75, and section 218 of the Income Tax Act 1952 (which, in cases all of which are within subsection (1) of the said section 17, affords alternative relief of the same amount as that afforded by the said section 17 as amended by this section) shall cease to have effect, except so far as any provisions of that section are applied for the purposes of the said section 17.

• (6) This section shall not be deemed to have required any change in the amounts deducted or repaid under section 157 (pay as you earn) of the Income Tax Act 1952 before 22nd June 1967.

Relief where copyright sold after ten years or more.

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• (1) Where not less than ten years after the first publication of the work the author of a literary, dramatic, musical or artistic work assigns the copyright therein wholly or partially, or grants any interest in the copyright by licence, and—

• (a) the consideration for the assignment or grant consists wholly or partially of a lump sum payment the whole amount of which would, but for this section, be included in computing the amount of his profits or gains for a single year of assessment, and

• (b) the copyright or interest is not assigned or granted for a period of less than two years,

he shall be entitled to claim that effect shall be given to the following provisions of this section in connection with that payment, and section 9 of the Income Tax Management Act 1964 shall apply to the claim.

• (2) Except where the copyright or interest is assigned or granted for a period of less than six years, the amount of the payment shall for income tax purposes be treated as becoming receivable in six equal instalments at yearly intervals, the first of which becomes receivable on the date on which the payment actually became receivable.

• (3) Where the copyright or interest is assigned or granted for a period of less than six years, the payment shall for income tax purposes be treated as becoming receivable in a number of equal instalments at yearly intervals the first of which becomes receivable on the date when the payment actually became receivable, the number being the number of whole years in that period.

• (4) Subject to subsection (5) below, if the author dies, any instalment which under this section would, but for the death, be treated as becoming receivable after the death shall for income tax purposes be treated as becoming receivable on the date when the last instalment before the death is to be treated as becoming receivable.

• (5) If the personal representatives so elect—

• (a) the total amount of income tax (including surtax) which would have been payable by the deceased or out of his estate in respect of the payment if the copyright or interest had been assigned or granted for a period beginning with the date when the first instalment is treated as becoming receivable and ending with the day before the death shall be computed, and

• (b) the income tax (including surtax) payable out of the estate by reason of the provisions of subsection (4) above shall be reduced so as not to exceed the amount at (a) above.

The references in this subsection to the income tax (including surtax) payable by a person include, in cases where the income of a wife is deemed to be income of the husband, references to the income tax (including surtax) payable by his wife or her husband, as the case may be.

• (6) If the payment would, apart from this section, have been taken into account in assessing the profits or gains of a profession or vocation, and the profession or vocation is permanently discontinued (otherwise than on death) after the date on which the payment actually became receivable, any instalment which under this section would, but for the discontinuance, be treated as receivable on a date after the discontinuance shall for income tax purposes be treated as becoming receivable when the last instalment before the discontinuance is to be treated as becoming receivable, unless the author elects to be treated (for all purposes) as if the copyright or interest had been assigned or granted for a period beginning with the date when the first instalment is treated as becoming receivable and ending with the day before the discontinuance.

• (7) Notice of any election under subsection (5) or subsection (6) above shall be served on the inspector within two years of the death, or as the case may be of the discontinuance.

• (8) Where, but for this section, the payment would be included in computing any profits or gains chargeable to tax under Case VI of Schedule D, and any amount would be deductible from that payment in computing those profits or gains (whether under the general provisions relating to Case VI or under section 32(4) of the Finance Act 1960 (post-cessation receipts)), the amount which, under this section, is to be treated as receivable in instalments shall be the amount of the payment after that deduction, and effect shall not be given to that deduction in any other way.

• (9) A claim cannot be made under this section in respect of a payment if a prior claim has been made under section 471 of the Income Tax Act 1952 (relief by spreading payment backwards) as respects that payment, and a claim cannot be made under the said section 471 in respect of a payment if a prior claim has been made under this section as respects that payment.

• (10) Where it is necessary, in order to give effect to a claim or election under this section, or as a result of the claim or election, to make any adjustment by way of an assessment on any person, the assessment shall not be out of time if it is made within one year of the final determination of the claim, or as the case may be within one year from the giving of notice of the election.

• (11) In this section—

• " author " includes a joint author,

• " lump sum payment " includes an advance on account of royalties which is not returnable,

and the reference to the first publication of a work is a reference to the first occasion on which the work or a reproduction of it is published, performed or exhibited.

• (12) This section shall apply to payments falling to be included in computing profits or gains for the year 1967-68 or any subsequent year of assessment.

Lloyd's and other underwriters.

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• (1) Arrangements under Schedule 21 to the Income Tax Act 1952 (special reserve funds for underwriters) may authorise the making of payments pursuant to paragraph 7(1) of that Schedule (withdrawals from special reserve funds into-premiums trust fund to meet a loss) on a provisional basis before-the amount of the loss has been finally ascertained and certified by the inspector.

• (2) The amount so withdrawn shall not exceed such proportion of the estimated loss as may be specified in the arrangements.

• (3) When the amount of the loss has been certified by the-inspector such adjustments shall be made by repayment to the underwriter's special reserve fund or funds, or by further withdrawal of sums for payment into the underwriter's premiums, trust fund, as will secure that the net amount withdrawn from the underwriter's special reserve fund or funds in respect of the-loss is that required pursuant to paragraph 7(1) of the said Schedule 21; and no tax consequences shall ensue on the withdrawal of sums in respect of a loss until the amount of the-loss has been so certified and any such adjustments have been made.

• (4) This section shall be construed as one with the said, Schedule 21.

PART III — Corporation Tax and Income Tax

Charge of corporation tax for financial year 1966.

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• (1) Corporation tax shall be charged for the financial year 1966 at the rate of 40 per cent.

• (2) It is hereby declared that where an Act charges corporation tax for any financial year the Corporation Tax Acts apply, without any express provision, for that year accordingly.

Group relief.

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• (1) Relief for trading losses and other amounts eligible for relief from corporation tax may in accordance with Schedule 10 to this Act be surrendered by a company (called " the surrendering company ") which is a member of a group of companies and claimed by another company (called " the claimant company ") which is a member of the same group by way of a new relief from corporation tax to be called group relief.

• (2) Group relief shall also be available in accordance with Schedule 10 to this Act—

• (a) where the surrendering company is a trading company which is owned by a consortium and which is not a subsidiary of any company, and the claimant company is a member of the consortium, or

• (b) where the surrendering company is a trading company—

• (i) which is a ninety per cent. subsidiary of a holding company which is owned by a consortium, and

• (ii) which is not a subsidiary of a company other than the holding company,

and the claimant company is a member of the consortium, or

• (c) where the surrendering company is a holding company which is owned by a consortium and which is not a subsidiary of any company, and the claimant company is a member of the consortium:

Provided that no claim may be made by a member of a consortium if a profit on a sale of the share capital of the surrendering or holding company which that member owns would be treated as a trading receipt of that member.

• (3) Subject to Schedule 10 to this Act, two or more claimant companies may make claims relating to the same surrendering company, and to the same accounting period of that surrendering company.

• (4) A payment for group relief—

• (a) shall not be taken into account in computing profits or losses of either company for corporation tax purposes, and

• (b) shall not for any of the purposes of the Corporation Tax Acts be regarded as a distribution or a charge on income,

and in this subsection " payment for group relief " means a payment made by the claimant company to the surrendering company in pursuance of an agreement between them as respects an amount surrendered by way of group relief, being a payment not exceeding that amount.

• (5) Section 20 of the Finance Act 1953 (subvention payments) as applied to corporation tax by paragraph 10 of Schedule 15 to the Finance Act 1965 shall not have effect in respect of the deficit of any accounting period ending after the passing of this Act.

• (6) For the purposes of this section and Schedule 10 to this Act—

• (a) two companies shall be deemed to be members of a group of companies if one is the subsidiary of the other or both are subsidiaries of a third company,

• (b) " holding company " means a company the business of which consists wholly or mainly in the holding of shares or securities of companies which are its ninety per cent. subsidiaries, and which are trading companies,

• (c) " subsidiary " has the meaning assigned to it for certain purposes of the profits tax by section 42 of the Finance Act 1938, and subsections (2) and (3) of that section shall apply as they applied for the purposes of that section, except that in the application of that section any share capital of a registered industrial and provident society shall be treated as within the definition of ordinary share capital,

• (d) " trading company " means a company whose business consists wholly or mainly of the carrying on of a trade or trades.

• (7) References in this section and the said Schedule to a company apply only to bodies corporate resident in the United Kingdom; and in determining for the purposes of this section and that Schedule whether one company is a subsidiary of another, the other company shall be treated as not being the owner—

• (a) of any share capital which it owns directly in a body corporate if a profit on a sale of the shares would be treated as a trading receipt of its trade, or

• (b) of any share capital which it owns indirectly, and which is owned directly by a body corporate for which a profit on the sale of the shares would be a trading receipt, or

• (c) of any share capital which it owns directly or indirectly in a body corporate not resident in the United Kingdom.

• (8) For the said purposes—

• (a) a company shall be deemed to be a ninety per cent. subsidiary of another company if not less than ninety per cent. of its ordinary share capital is directly owned by that other company,

• (b) a company is owned by a consortium if all of the ordinary share capital of that company is directly owned between them by five or fewer companies, and those companies are called the members of the consortium,

• (c) a member's share in a consortium shall be the percentage of the ordinary share capital of the surrendering company, or as the case may be of the holding company through which the surrendering company is owned, which is owned by that member in the relevant accounting period of the surrendering company, and if that percentage has fluctuated in the accounting period, the average percentage over the period shall be taken,

and in this subsection references to ownership and to ordinary share capital shall be construed in accordance with section 42(3) of the Finance Act 1938.

Capital allowances.

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• (1) The rate of any initial allowance falling to be made under section 17 of the Finance Act 1956 (dredging) in respect of expenditure to which section 15 of the Finance Act 1958 applies shall be three-twentieths except where reduced to one-twentieth under section 21(4)(b) of the Finance Act 1959 (initial allowance in addition to investment allowance), and the amendment of the said section 17 made by paragraph 10(1) of Schedule 14 to the Finance Act 1965 (which mentions only the rate of one-twentieth) shall be deemed always to have had effect accordingly.

• (2) In subsection (6) of section 56 of the Finance Act 1965 (set-off of capital allowances against total profits chargeable to corporation tax) the reference to an allowance to be made for an accounting period does not include any amount carried forward from a previous accounting period under subsection (5) of that section, and so much of the said subsection (5) as requires an amount so carried forward from one accounting period to another to be treated as the amount of a corresponding allowance for the later period shall not affect the said subsection (6).

The said section 56 of the Finance Act 1965 shall be deemed always to have had effect as amended by this subsection.

• (3) The repeals set out in Part IV of Schedule 13 to the Finance Act 1966 (abolition of investment allowances) shall be deemed never to have extended to paragraph 6 or paragraph 7 of Schedule 2 to the Finance Act 1954 (which amend sections 292 and 296 of the Income Tax Act 1952 in connection with cases where no initial allowance is made in respect of machinery or plant, whether or not in consequence of the making of an investment allowance), or to so much of section 16(8) of that Act of 1954 as relates to those paragraphs.

• (4) For the avoidance of doubt it is hereby declared—

• (a) that section 270(6) of the Income Tax Act 1952 (classes of income against which allowances in respect of industrial buildings or structures may be made) applies to allowances under section 274 of that Act (temporary disuse of industrial buildings or structures),

• (b) that the reference in section 286 of that Act (allowances for machinery or plant for part of a year of assessment) to a writing down (or annual) allowance computed in accordance with the preceding provisions of Chapter II of Part X of that Act includes, where relevant, a reference to an allowance computed in accordance with those provisions and section 14 of the Finance Act 1965 (new ships),

• (c) that by virtue of section 298(2) of the Income Tax Act 1952 references in Acts passed after that Act to writing down (or annual) allowances in respect of machinery or plant include, except where otherwise expressly provided or where the context otherwise requires, references to allowances under subsection (1) of the said section 298 (allowances for lessors of machinery or plant), and

• (d) that section 279(2) of the Income Tax Act 1952 (which relates to expenditure incurred by a person for the purposes of a trade before he begins to carry it on) applies, where relevant, for the construction of references to the date when expenditure was incurred in subsections (1) and (3) of section 13 of the Finance Act 1965 (withdrawal of initial allowances for cars in respect of expenditure incurred after 6th April 1965).

Farming and market gardening: restriction of relief for losses and capital allowances.

22

• (1) Any loss incurred in a trade of farming or market gardening shall be excluded from section 341 of the Income Tax Act 1952 (set-off of losses and capital allowances against total income) if in each of the prior five years a loss was incurred in carrying on that trade, and where a loss is so excluded any related capital allowance shall also be excluded from the said section 341.

• (2) Any loss incurred in any accounting period by a company in carrying on a trade of farming or market gardening shall be excluded from section 58(2) of the Finance Act 1965 (set-off of losses against total profits) if a loss, computed without regard to capital allowances, was incurred in carrying on that trade in that accounting period, and in each of the chargeable periods wholly or partly comprised in the prior five years.

• (3) Subsections (1) and (2) above shall not restrict relief for any loss or for any capital allowance, if it is shown by the claimant that the whole of his farming or market gardening activities in the year next following the prior five years are of such a nature, and carried on in such a way, as would have justified a reasonable expectation of the realisation of profits in the future if they had been undertaken by a competent farmer or market gardener, but that if that farmer or market gardener had undertaken those activities at the beginning of the prior period of loss he could not reasonably have expected the activities to become profitable until after the end of the year next following the prior period of loss.

• (4) Subsections (1) and (2) above shall not restrict relief where the carrying on of the trade forms part of, and is ancillary to, a larger trading undertaking.

• (5) In this section—

• " basis year " in relation to any capital allowance shall be construed in accordance with section 18(2) of the Finance Act 1962;

• " chargeable period ", in relation to a company, means any accounting period, or any basis period ending before its first accounting period, " basis period " having the meaning given in section 325 of the Income Tax Act 1952;

• " prior five years "— in relation to a loss incurred in a year of assessment, means the last five years of assessment before that year; in relation to a loss incurred in a company's accounting period, means the last five years before the beginning of the accounting period;

• " prior period of loss " means the prior five years except that if losses were incurred in the trade in successive years of assessment or chargeable periods amounting in all to a period longer than five years (and ending when the prior five years end), it means that longer period, and in applying this definition to a chargeable period of a company " losses " means losses computed without regard to capital allowances;

• " farming " and " market gardening " shall be construed in accordance with the definitions of those terms in section 526 of the Income Tax Act 1952, but as if those definitions were not restricted to activities in the United Kingdom,

and the reference in this section to section 341 of the Income Tax Act 1952 includes a reference to that section as extended by section 15(3) of the Finance Act 1953 (set-off of losses and capital allowances against total income of following year).

• (6) For the purposes of this section a capital allowance is related to a loss incurred in a trade if it falls to be made in taxing that trade and its basis year is the year of assessment in which the loss was incurred.

• (7) In ascertaining for the purposes of this section whether a loss was incurred in any part of the prior five years, or earlier, the rules applicable to Case I of Schedule D shall be applied, and in this section " loss computed without regard to capital allowances " means, in relation to a chargeable period of a company, a loss so ascertained but so that, notwithstanding section 56(2) of the Finance Act 1965, no account shall be taken of any allowance or charge under Part X or Part XI of the Income Tax Act 1952 (capital allowances).

• (8) Subsections (1) and (2) above shall not restrict relief for any loss or capital allowance if the trade was set up and commenced within the prior five years, and for the purposes of this subsection a trade shall be treated as discontinued, and a new trade set up, in any event which under any of the provisions of the Income Tax Acts or the Corporation Tax Acts is to be treated as equivalent to the permanent discontinuance or setting up of a trade:

Provided that a trade shall not be treated as discontinued if under section 61(2) of the Finance Act 1965 or section 17 of the Finance Act 1954 (company reconstructions without change of ownership) it is not to be treated as discontinued for the purpose of capital allowances and charges.

• (9) Where at any time before or after the passing of this Act there has been a change in the persons engaged in carrying on a trade this section shall, notwithstanding subsection (8) above, apply to any person who was engaged in carrying on the trade immediately before and immediately after the change as if the trade were the same before and after without any discontinuance, and as if—

• (a) a husband and his wife were the same person,

• (b) a husband or his wife were the same person as any company of which either the husband or the wife has control, or of which the two of them have control,

and accordingly relief from income tax or from corporation tax may be restricted under this section by reference to losses some of which are incurred in years of assessment and some, computed without regard to capital allowances, are incurred in a company's chargeable periods.

In this subsection " control " has the meaning given by paragraph 3 of Schedule 18 to the Finance Act 1965.

• (10) This section shall not apply to restrict relief in respect of a loss incurred in, or any capital allowance the basis year for which is, a year of assessment before 1967-68, or a loss incurred in a company's accounting period beginning before 1st April 1967 (but can apply to a company to prevent a loss from being set off against profits of any such accounting period).

Tax-free income of banking businesses, etc., carried on by non-residents.

23

• (1) This section has effect where paragraphs (a) and (b) of section 436(2) of the Income Tax Act 1952 (interest on tax-free Treasury securities excluded from computation of profits, or profits of annuity business) apply to a business for any accounting period or year of assessment.

• (2) Up to the amount determined under this section (called the amount ineligible for relief) interest on money borrowed for the purposes of the business—

• (a) shall be excluded in any computation under the Corporation Tax Acts or the Income Tax Acts of the profits (or loss) arising from the business or, where subsection (5) below applies, arising from any annuity business forming part of the life assurance business, and

• (b) shall be excluded from the definition of " charges on income " in section 52(2) of the Finance Act 1965.

• (3) In determining the amount ineligible for relief, account shall be taken of all money borrowed for the purposes of the business which is outstanding in the accounting or basis period, up to the total cost of the tax-free Treasury securities held for the purpose of the business in that period:

Provided that where the person carrying on the business is a company, account shall not be taken of any borrowed money carrying interest which, apart from subsection (2) above, does not fall to be included in the computations under paragraph (a) of that subsection, and is not to be treated as a charge on income for the purposes of the Corporation Tax Acts.

• (4) Subject to subsection (5) below, the amount ineligible for relief shall be equal to a year's interest on the amount of money borrowed which is to be taken into account under subsection (3) above at a rate equal to the average rate of interest in the accounting or basis period on money borrowed for the purposes of the business, except that in the case of a period of less than twelve months, interest shall be taken for that shorter period instead of for a year.

• (5) Where relief for expenses of management is to be granted to an assurance company for any accounting period, and that relief falls to be reduced under section 436(3)(b) of the Income Tax Act 1952 (by applying the fraction which is investment income of the life assurance fund other than income from tax-free Treasury securities divided by that total investment income) the amount ineligible for relief shall be a fraction of the amount of interest in the accounting period on money borrowed for the purposes of the business, and that fraction shall be the fraction which is income from tax-free Treasury securities divided by total investment income of the life assurance fund (that is to say one minus the fraction to be applied under the said section 436(3)(b)).

• (6) In this section " tax-free Treasury securities " means securities issued by the Treasury with a condition regulating the treatment of the interest thereon for income tax or corporation tax purposes such that interest on the securities is excluded in computing the income or profits.

• (7) For the purposes of this section the cost of a holding of tax-free Treasury securities which has fluctuated in the accounting or basis period shall be the average cost of acquisition of the initial holding, and of any subsequent acquisitions in the accounting or basis period, applied to the average amount of the holding in the accounting or basis period, and this subsection shall be applied separately to securities of different classes.

• (8) In this section " accounting or basis period " means the company's accounting period or the period by reference to which the profits or gains arising in the year of assessment are to be computed.

• (9) In section 436(2) of the Income Tax Act 1952 the references to expenses shall not include a reference to interest on borrowed money, and the words " any interest on money borrowed for the purpose of acquiring the securities " and the word " other " (which are superseded by this section) shall cease to have effect.

• (10) This section shall be construed as one with the said section 436.

• (11) This section shall apply for income tax purposes for the year 1967-68 and subsequent years of assessment, and, without prejudice to section 53(2) of the Finance Act 1965 (which applies income tax law for corporation tax), shall apply for corporation tax purposes to accounting periods ending on or after 6th April 1967.

Amendments of Corporation Tax Acts.

24

Schedule 11 to this Act, which contains amendments of the Corporation Tax Acts relating to life assurance business, company distributions, close companies, companies which are wound up and the collection of income tax on payments made by companies and other matters dealt with in Schedule 12 to the Finance Act 1965, shall have effect.

PART IV — Selective Employment Tax

Additional provision for refunds of, and other provisions as to, selective employment tax.

25

• (1) Where the employer in respect of one or more employments of an employed person has paid selective employment tax in respect of that person for any contribution week beginning on or after 4th September 1967 in which that person either worked in the employment or employments in question for an aggregate of less than twenty-one hours or did no work in the employment or employments in question, then, except where—

• (a) the employed person was treated for the purpose of the tax as a boy or girl under the age of eighteen ; or

• (b) any contract in pursuance of which he worked in that employment or any of those employments, or the holding of any office constituting that employment or one of those employments, normally involved that person's working in the employment or employments in question for an aggregate of twenty-one or more hours weekly,

and subject to paragraphs 2, 3 and 5 of Schedule 12 to this Act, the Minister of Social Security (hereafter in this section and in that Schedule referred to as " the Minister ") shall make to that employer in respect of that person and that week a payment of an amount equal to half the tax paid; and for the purposes of this subsection—

• (i) in the case of any employment in which any of the employed person's remuneration was calculated by reference to an hourly rate in respect of each hour for which he worked or was treated as working in that employment, there shall be taken into account as his hours of work in that employment those hours, and those hours only, for which he was paid remuneration calculated wholly or partly by reference to such a rate;

• (ii) in the case of any other employment, there shall be taken into account as part of that person's hours of work in that employment any intervals allowed for meals and rest;

• (iii) a person employed in any contribution week in different employments by different employers who are associated companies shall, except as the Minister may in any particular case or class of cases otherwise direct, be treated as employed in that week in both or all of those employments by the employer by whom the tax in respect of that person for that week was paid.

• (2) Where an employer has paid selective employment tax in respect of an employed person for a continuous period of more than thirteen contribution weeks during which that person has been employed by him wholly outside both the United Kingdom and any area for the time being designated under section 1(7) of the Continental Shelf Act 1964, then, subject to paragraphs 2, 4 and 5 of Schedule 12 to this Act, in respect of each of those contribution weeks which, not being earlier than the fourteenth of them, began on or after 4th September 1967, the Minister shall make to that employer a payment of an amount equal to the tax paid in respect of that person for that week; and for the purposes of this subsection—

• (a) an employed person may be treated as having been employed wholly as aforesaid during any period notwithstanding that he has within that period been present in the United Kingdom or any such area as aforesaid if he has not at any time during that period been so present for a period of consecutive days which includes more than twenty-one disqualifying days, that is to say, days which are neither days in a week left out of account by virtue of paragraph (b) of this subsection nor other days on which either he was incapable of work by reason of some specific disease or bodily or mental disablement or he was on leave, whether paid or unpaid, but—

• (i) for the purposes of this paragraph a day on which that person would not in the normal course have worked in his employment and on which he did not so work shall be treated as a day of leave if, but only if, it is a day in a period of seven consecutive days of leave; and

• (ii) the employer shall not be entitled in respect of that person to a payment under this subsection in respect of any contribution week which contains one or more of those disqualifying days other than a day or days on which he did no work in his employment;

• (b) in determining whether any contribution weeks form a continuous period, there shall be left out of account any such week for which tax was not paid by reason of the employed person's being either incapable of work as aforesaid or on unpaid leave, whether that person was in or outside the United Kingdom or any such area as aforesaid during that week ;

• (c) a person employed in different contribution weeks forming a continuous period by different employers who are associated companies shall, except as the Minister may in any particular case or class of cases otherwise direct, be treated as respects any contribution week in that period as if he had been employed in, and tax in respect of him had been paid for, all previous contribution weeks in that period by the employer by whom the tax in respect of him was paid for the contribution week in question.

• (3) The supplementary and additional provisions contained in Schedule 12 to this Act shall have effect for the purposes of this section and the other enactments relating to selective employment tax.

Regional employment premium.

26

• (1) Where, in the case of a person in an employment to which section 1 of the principal Act applies in respect of whom a payment under that section falls to be made to the employer, the establishment in or from which that employment is carried out is situated wholly within a development area, then, subject to subsections (2), (4) and (5) of this section, the amount of that payment shall, in respect of any contribution week beginning on or after 4th September 1967, be increased—

• (a) if that person was treated for the purpose of selective employment tax for that week as a man over the age of eighteen, by thirty shillings ; or

• (b) if that person was treated for that purpose as a woman over the age of eighteen, by fifteen shillings; or

• (c) if that person was treated for that purpose as a boy under the age of eighteen, by fifteen shillings; or

• (d) if that person was treated for that purpose as a girl under the age of eighteen, by nine shillings and sixpence.

• (2) Where in any contribution week the person aforesaid was employed by the employer in question in an employment to which section 1 of the principal Act applies, but—

• (a) he worked in that employment for an aggregate of less than twenty-one hours, or he did no work in that employment; and

• (b) that employment was not in pursuance of a contract or as the holder of an office which normally involved that person's working in that employment for an aggregate of twenty-one or more hours weekly,

the amount of any increase in respect of that person and that week by virtue of subsection (1) of this section, instead of being that for the time being specified in paragraph (a), (b), (c) or (d), as the case may be, of that subsection, shall be one half of the amount for the time being so specified; and paragraphs (i) and (ii) of section 25(1) of this Act shall apply for the purposes of this subsection as they apply for the purposes of the said section 25(1).

• (3) In section 3(2)(a) of the principal Act (which provides for the making to certain employers who are public bodies of payments corresponding to the payments made to other employers under section 1 of that Act), the reference to the appropriate additions specified in paragraphs (a) to (d) of section 1(1) of that Act shall, in relation to persons employed in any such part of the undertaking of an employer to whom the said section 3 applies as is specified in Part III of Schedule 1 to that Act who are so employed at or from places Situated wholly within development areas, be construed as including a reference to the appropriate increases for the time being specified in paragraphs (a) to (d) of subsection (1) or in subsection (2) of this section.

• (4) The Minister of Labour shall not be required by virtue of subsection (1) of this section to increase any payment to an employer under section 1 of the principal Act in respect of any person and any contribution week unless the employer produces such records as that Minister may reasonably require—

• (a) of the number of hours worked by that person in that week; and

• (b) of the number of hours of work in a week normally involved for that person in consequence of the terms of any contract or by reason of any office held by him.

• (5) The Treasury may by order made by statutory instrument—

• (a) substitute for all or any of the amounts specified in subsection (1)(a) to (d) of this section such other amount or amounts as may be specified in the order;

• (b) in a case where increases by virtue of this section have been paid in connection with any establishment but cease to be payable by reason of a change in the development areas, provide for increases to continue to be paid by virtue of this section in connection with that establishment for such period as may be specified in the order and of such amount or amounts as may be so specified either in relation to the whole of that period or in relation to different parts of that period ;

and any such order may be made either in relation to all development areas or in relation only to such development areas or parts of development areas as are specified in the order, and may vary or revoke any previous order under this subsection ; but no such order shall be made unless a draft thereof has been approved by resolution of each House of Parliament.

• (6) In this section—

• (a) the expression " development area " means an area for the time being specified as a development area under section 15(2) of the Industrial Development Act 1966, and includes any such locality outside that area as is specified in section 15(6) of that Act;

• (b) the expression " the principal Act " means the Selective Employment Payments Act 1966.

• (7) If any enactment of the Parliament of Northern Ireland makes provision with respect to Northern Ireland which appears to the Treasury to correspond to the provision made with respect to development areas by this section, there shall from time to time be paid out of the Consolidated Fund of the United Kingdom into the Exchequer of Northern Ireland such sums towards the expenditure incurred in making payments under that enactment as the Treasury, after consultation with the Ministry of Finance for Northern Ireland, may see fit to direct.

Part V — Stamp Duties

Conveyances and transfers on sale: reduction of duty, and amendment of provisions for exemption.

27

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

• (2) Section 42 of the Finance Act 1930 (which exempts from duty conveyances and transfers complying with subsection (2) of that section, that is to say, between companies with limited liability, where one owns ninety per cent. of the issued share capital f the other or a third owns ninety per cent. of the issued share capital of each) shall be amended as respects instruments executed on or after the said 1st August by substituting for the said subsection (2) the following subsections—

(2) This section applies to any instrument as respects which it is shown to the satisfaction of the Commissioners that the effect thereof is to convey or transfer a beneficial interest in property from one body corporate to another, and that the bodies in question are associated, that is to say, one is beneficial owner of not less than ninety per cent. of the issued share capital of the other, or a third such body is beneficial owner of not less than ninety per cent. of the issued share capital of each. (3) The ownership referred to in subsection (2) above is ownership either directly or through another body corporate or other bodies corporate, or partly directly and partly through another body corporate or other bodies corporate, and Part I of Schedule 4 to the (determination of amount of capital held through other bodies corporate) shall apply for the purposes of this section with the substitution of references to issued share capital for references to ordinary share capital.

• (3) The said section 42 shall not apply to any instrument executed on or after the said 1st August unless it is also shown to the satisfaction of the Commissioners that the instrument was not executed in pursuance of or in connection with an arrangement whereunder—

• (a) the consideration, or any part of the consideration, for the conveyance or transfer was to be provided or received, directly or indirectly, by a person other than a body corporate which at the time of the execution of the instrument was associated within the meaning of the said section 42 with either the transferor or the transferee (meaning, respectively, the body from whom and the body to whom the beneficial interest was conveyed or transferred), or

• (b) the said interest was previously conveyed or transferred, directly or indirectly, by such a person, or

• (c) the transferor and the transferee were to cease to be associated within the meaning of the said section 42 by reason of the transferor or a third body corporate ceasing to be the transferee’s parent (within the meaning of the said section 42);

and, without prejudice to the generality of paragraph (a) above, an arrangement shall be treated as within that paragraph if it is one whereunder the transferor or the transferee, or a body corporate associated with either as there mentioned, was to be enabled to provide any of the consideration, or was to part with any of it, by or in consequence of the carrying out of a transaction or transactions involving, or any of them involving, a payment or other disposition by a person other than a body corporate so associated.

This subsection shall, as respects instruments executed on or after the said 1st August, have effect in substitution for section 50 of the Finance Act 1938.

Loan capital: increase of duty, and amendments as to exemptions and reliefs.

28

Local authorities: exemption of loan capital and securities, and of transfers of their stock.

29

Exemption for bearer instruments relating to stock in foreign currencies.

30

Stamping of foreign bills of exchange.

31

Part VI — Miscellaneous

Capital gains.

32

Chargeable gains: exclusion of development value of land in Great Britain.

33

• (1) Subject to subsection (3) below, in computing for the purposes of Part III of the Finance Act 1965 the amount of any gain accruing to a person on a disposal of land on or after 6th April 1967 it shall be assumed—

• (a) that his acquisition of the land was for a consideration of an amount equal to the current use value of the land at the time when he acquired it, and

• (b) that his disposal of the land was for a consideration of an amount equal to the current use value of the land at the time of the disposal:

Provided that this subsection shall not apply to a disposal if immediately before the time of the disposal the market value of the land, including in the case of a part disposal, the land which remains undisposed of, does not exceed the current use value of that land.

• (2) Schedule 14 to this Act shall have effect for interpreting and supplementing this section, which is there referred to as the principal section.

• (3) If the person making a disposal so elects, Part III of the Finance Act 1965 shall apply in relation to that disposal as if the preceding subsections of this section, and the said Schedule, had not been enacted, and had not affected any prior disposal or other transaction or the apportionment of expenditure on any prior disposal.

An election under this subsection shall be made by notice in writing to the inspector given within two years from the end of the year of assessment in which the disposal is made or such further time as the Board may by notice in writing allow, and " year of assessment " here means, for corporation tax as well as for capital gains tax, a year beginning on 6th April.

• (4) It is hereby declared that a payment of betterment levy is not a sum allowable as a deduction in the computation under Part III of the Finance Act 1965 of a gain accruing on a disposal of land or of any other asset.

• (5) If in computing a gain accruing on a disposal of land to which subsection (1) above applies, or would apply but for an election under this section, the expenditure allowable as a deduction would otherwise include any expenditure incurred before 6th April 1965, it shall be assumed in relation to the disposal that the land was sold by the person making the disposal, and immediately re-acquired by him, on 6th April 1965 and that the gain accruing on any previous part disposal was computed on the same footing.

• (6) Where subsection (1) above is displaced by an election under this section, subsection (5) above shall have effect in substitution for sub-paragraphs (1), (2) and (3) of paragraph 23 of Schedule 6 to the Finance Act 1965 (assumed sale and re-acquisition at market value), but subject to sub-paragraph (4) of that paragraph, construing references to sub-paragraph (2) of that paragraph as references to subsection (5) above, and the sale and re-acquisition under subsection (5) above shall be deemed to be at market value.

• (7) For the purposes of subsection (1) above a disposal shall be regarded as made on or after 6th April 1967 if the conveyance or other instrument giving effect to the disposal is executed on or after that date, and subsection (1) above shall not apply to a conveyance which is a disposition within paragraph 1 of Schedule 9 to the Land Commission Act 1967 (which exempts from betterment levy a purchase made by an authority possessing compulsory purchase powers where the notice to treat was before the first appointed day).

• (8) All such adjustments shall be made, whether by way of discharge or repayment of tax, or the making of assessments or otherwise, as are required to give effect to the provisions of this section and of the said Schedule to this Act.

• (9) This section and the said Schedule to this Act shall not apply to land outside Great Britain.

Provisions consequential on introduction of betterment levy (including repeal of mineral rights duty).

34

• (1) Schedule 15 to this Act (allowance in respect of betterment levy for purposes of charge to tax under Case VIII or Case VI of Schedule D, and relief in respect of betterment levy from estate duty on gifts inter vivos, etc.) shall have effect.

• (2) The mineral rights duty imposed by section 20 of the Finance (1909-10) Act 1910 shall not be charged for the financial year beginning on 1st April 1967 or for any subsequent financial year.

Life policies carrying rights not in money.

35

Basis for determining unilateral relief from double taxation.

36

Grants for giving up agricultural land.

37

Central African Pension Fund 39. Overseas Service Pensions Fund.

38

Overseas Service Pensions Fund.

39

• (1) A pension paid out of the Overseas Service Pensions Fund shall not be liable to charge to income tax if it is the income of a person who, on a claim to the Board for relief under this subsection, satisfies the Board that he is not resident in the United Kingdom.

Section 9 of the Income Tax Management Act 1964 shall apply to any claim under this subsection.

• (2) In respect of income derived from investments or deposits of that Fund the Board shall, on a claim being made to them for the purpose, give by way of repayment such relief from income tax as is necessary to secure that the income is exempt to the like extent (if any) as if it were income of a person not domiciled, ordinarily resident or resident in the United Kingdom.

This subsection shall have effect as respects the year 1966-67 as well as subsequent years of assessment.

• (3) Sections 36(2) of the Finance Act 1965 and 15(3) of the Finance Act 1962 (exemptions from the capital gains tax, and the tax on gains under Case VII of Schedule D, for funds whose income is exempt under certain enactments) shall each have effect as if subsection (2) above were included among the enactments there referred to.

• (4) In this section " the Overseas Service Pensions Fund " means the Fund established under that name pursuant to section 7(1) of the Overseas Aid Act 1966, and " pension " includes a gratuity or any sum payable on or in respect of death or ill-health, and a return of contributions with or without interest thereon or any other addition thereto.

Interest on unpaid tax.

40

• (1) The rate of interest prescribed by—

• (a) section 495(1) of the Income Tax Act 1952 (interest on overdue tax),

• (b) section 58(1) of the Finance Act 1960 (interest on tax recovered to make good loss due to taxpayer's default),

• (c) section 8 of the Finance (No. 2) Act 1947 (interest on unpaid profits tax and excess profits tax), and

• (d) paragraph 10(1) of Schedule 7 to the Finance Act 1960 (interest on profits tax recovered to make good loss due to taxpayer's default),

shall, subject to the next following subsection, be 4 per cent. per annum (instead of 3 per cent. per annum).

• (2) The Treasury may, by order in a statutory instrument, subject to annulment in pursuance of a resolution of the Commons House of Parliament, from time to time increase or decrease the rate of interest prescribed by subsection (1) above, either for the purposes of all the enactments mentioned in that subsection, or so as to prescribe different rates for different purposes.

• (3) Subsection (1) above shall apply to interest for any period beginning on or after 19th April 1967 whether or not interest runs from before that date; and any variation of the rate of interest prescribed under subsection (2) above shall apply to interest for periods beginning on or after the date when the order is expressed to come into force, whether or not interest runs from before that date.

• (4) Interest charged under the said section 495(1) or the said section 58(1) shall be treated for the purposes—

• (a) of sections 74, 76, 78 and 79 of the Income Tax Act 1952 and of section 8 of the Income Tax Management Act 1964 (recovery of tax by distress or in court proceedings), and

• (b) of section 35(2)(g)(i) of the Crown Proceedings Act 1947 (rules of court to impose restrictions on set-off and counterclaim where the proceedings, or set-off or counterclaim, relate to taxes) and of any rules of court (including county court rules) for England and Wales or Northern Ireland, made before or after the passing of this Act, which impose such a restriction, and

• (c) of section 35(2)(b) of the said Act of 1947 as set out in section 50 of that Act (which imposes corresponding restrictions in Scotland),

as if it were tax charged and due and payable under the assessment to which it relates.

• (5) In section 495(3)(b) of the Income Tax Act 1952 (exemption for interest not exceeding one pound) five pounds shall be substituted for one pound as respects tax becoming due and payable on or after 19th April 1967.

• (6) Without prejudice to the general interpretative provisions of this Act, this section applies to the enactments mentioned in subsection (1) above as extended by any other enactment, and in particular—

• (a) it applies to sections 495(1) of the Income Tax Act 1952 and section 58(1) of the Finance Act 1960 as extended to capital gains tax and corporation tax, and

• (b) it applies to section 8 of the Finance (No. 2) Act 1947 as extended to the excess profits levy.

Provisional collection of taxes.

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• (1) The Provisional Collection of Taxes Act 1913, section 265 of the Customs and Excise Act 1952 (security for new duties) and section 49(6) of the Finance Act 1965 (assessment of corporation tax before passing of annual Act) shall apply to resolutions of the House of Commons and not to resolutions of the Committee of Ways and Means, and accordingly shall have effect subject to the repeals in Part IX of Schedule 16 to this Act.

• (2) A resolution having statutory effect under section 1 of the Provisional Collection of Taxes Act 1913 shall cease to have statutory effect unless within the next twenty-five days on which the House sits after the day on which the resolution is passed—

• (a) a Bill varying or renewing the tax is read a second time by the House of Commons, or

• (b) a Bill is amended by the House of Commons so as to include provision for the variation or renewal of the tax.

Proviso (a) to section 1(1) of the said Act of 1913 (which required a Bill varying or renewing the tax to have been read a second time within twenty sitting days after the resolution of the Committee of Ways and Means is agreed to by the House) shall cease to have effect, and the said section 1(1) shall be construed as one with this subsection.

• (3) The period for which a resolution shall have statutory force under section 1 of the Provisional Collection of Taxes Act 1913 shall, if the resolution is passed in March or April in any year, expire with 5th August in the same calendar year, and section 1(2) of the said Act shall have effect subject to this subsection.

• (4) Section 1 of the Provisional Collection of Taxes Act 1913 shall apply to a resolution of the House of Commons providing for the repeal or abolition of an existing tax (within the meaning of that Act) as it applies to such a resolution providing for the variation of any existing tax; and in relation to a resolution to which this subsection applies, the references in subsection (2) above and in proviso (b) to the said section 1(1) to the variation of the tax by a Bill or an Act shall be construed as references to its repeal or abolition by, as the case may require, a Bill or an Act.

• (5) Section 49(6) of the Finance Act 1965 shall apply to a resolution passed in March or April in any year as if for the period of four months from the passing of the resolution referred to in that subsection (as a period within which an assessment may be made by virtue of the resolution) there were substituted a reference to a period beginning with the passing of the resolution and ending with 5th August in the same calendar year.

• (6) In subsection (1) of section 265 of the Customs and Excise Act 1952 (which restricts that section to new duties of customs or excise in respect of any goods) the words " in respect of any goods " shall cease to have effect.

• (7) This and the next following section shall come into force on such date, not earlier than 1st September 1967, as may be appointed by the Treasury by order in a statutory instrument.

• (8) This and the next following section shall not affect the Provisional Collection of Taxes Act 1913 as that Act applies to the House of Commons of the Parliament of Northern Ireland.

Collection of taxes before passing of ways and means resolutions.

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Quorum of Special Commissioners in tax cases.

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Loans to Government of Northern Ireland.

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Citation, interpretation, construction, extent and repeals.

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• (1) This Act may be cited as the Finance Act 1967.

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

• (3) In this Act—

• (a) Part I (except sections 8 to 12 and Schedules 7 and 8) shall be construed as one with the Customs and Excise Management Act 1979,

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (g) Part V shall be construed as one with the Stamp Act 1891, and

• (h) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

• (5) The following provisions of this Act, namely, section 5(1) so far as it relates to the Licensing (Scotland) Acts 1959 and 1962 and Schedule 8, shall be included in the enactments which may be cited together as the Licensing (Scotland) Acts 1959 to 1967.

• (6) 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.

• (7) Except as otherwise expressly provided, 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.

• (8) The enactments mentioned in Schedule 16 to this Act are hereby repealed to the extent mentioned in the third column of that Schedule, but subject to any provision in relation thereto made at the end of any Part of that Schedule.

SCHEDULE 1—

SCHEDULE 2—

SCHEDULES 3, 4—

SCHEDULE 4

SCHEDULE 5—

Hydrocarbon oils—revised definition of light oils

1

As from 1st October 1967, for the definition of " light oils " in section 195(1) of the Act of 1952 there shall be substituted the following definition—

• " light oils " means hydrocarbon oils— of which not less than ninety per cent. by volume distils at a temperature not exceeding two hundred and ten degrees centigrade ; or which give off an inflammable vapour at a temperature of less than twenty-three degrees centigrade when tested in the manner prescribed by the Acts relating to petroleum.

Drawback on exportation, etc., of beer

2

The provisions of section 137 of the Act of 1952 as to the allowance of drawback on the exportation, removal to the Isle of Man or shipment as stores by any person of such beer as is mentioned in paragraph (a) or paragraph (b) of subsection (1) of that section shall apply to any such beer which it is shown to the satisfaction of the Commissioners is being exported, or removed or shipped as aforesaid, as an ingredient of other goods.

Remission of duty on goods spoilt or destroyed, etc.

3

The provisions of section 263(3) of the Act of 1952 (which relates to the remission or repayment of duty on certain materials destroyed, spoilt or otherwise unfit for use) shall apply to any worts or beer which have been destroyed or become spoilt or otherwise unfit for use by unavoidable accident while on the entered premises of a brewer for sale notwithstanding that they were not manufactured by that brewer; and accordingly in the said section 263(3) the words " manufacturered by that trader " shall cease to have effect.

Remission or repayment of excise duty on beer used for purposes of research or experiment

4

• (1) Where it is proved to the satisfaction of the Commissioners that any beer chargeable with the duty of excise is to be used only for the purposes of research or of experiments in brewing, the Commissioners may, if they think fit and subject to such conditions as they see fit to impose, remit or repay the excise duty chargeable on that beer.

• (2) If any person contravenes or fails to comply with any condition imposed under sub-paragraph (1) of this paragraph he shall be liable, in addition to any other penalty he may have incurred, to a penalty of fifty pounds.

• (3) In section 125(3) of the Act of 1952 (which provides that a licence to brew beer shall not be required for the brewing of beer only for certain purposes) after the word " employment " there shall be inserted the words " or for the brewing of beer (with the authority of the Commissioners and subject to compliance with such conditions as they see fit to impose) solely for the purposes of research or of experiments in brewing ".

SCHEDULE 6—

A. The Customs and Excise Act 1952 (15 & 16 Geo. 6 & 1 Eliz. 2 c. 44)

1

In section 117(3), for the words " retailer's on-licence " there shall be substituted the words " justices' on-licence ".

2

In section 160(2), for the words " the premises in respect of which he holds his retailer's licence " there shall be substituted the words " any premises at which he sells spirits by retail ".

3

In section 161(1)—

• (a) for the words " this Act " there shall be substituted the words " this or some other Act ";

• (b) for the words " a licence to sell spirits " there shall be substituted the words " a licence as a dealer in spirits or a justices' licence authorising him to sell spirits ".

4

For section 162(4) there shall be substituted the following subsection:—

(4) Nothing in this section shall apply to any liquor which is prepared— (a) on any premises in respect of which a justices' on-licence is in force ; or (b) in any registered club ; or (c) in any theatre, or on board any aircraft, vessel or vehicle, in the case of which, by virtue of section 199(c) or (d) of the Licensing Act 1964 or, in Scotland, by virtue of section 198(b) or (d) of the Licensing (Scotland) Act 1959, a justices' licence is not required, for immediate consumption on those premises, in that club, at that theatre, or on board that aircraft, vessel or vehicle, as the case may be.

5

In section 248, at the end there shall be added the following subsection—

(3) Subsection (1) of this section shall apply to any of the following in or from which intoxicating liquor is sold by retail, namely, any road or rail vehicle, vessel, aircraft, hover vehicle or structure, as it applies to premises; and in this subsection the expression " hover vehicle " means a vehicle designed to be supported on a cushion of air.

6

In section 307(1), in the paragraph beginning " excise trader ", at the end there shall be added the words " and includes a registered club ".

7

In section 307(1), after the paragraph which, as amended, begins " justices' certificate " there shall be inserted the following paragraph:—

• " justices' licence " and " justices' on-licence "— in the application of this Act to England and Wales have the meanings respectively assigned by sections 1(1) and 1(2)(a) of the Licensing Act 1964 and in both cases include a canteen licence granted under Part X and an occasional licence granted under section 180 of that Act; in the application of this Act to Scotland mean respectively— a certificate granted under section 32(1) of the Licensing (Scotland) Act 1959 ; and any such certificate as aforesaid, not being an off-sale certificate as defined in section 32(2)(c) of the said Act of 1959 ; and in this paragraph any reference to a certificate granted under section 32(1) of the said Act of 1959 includes a reference to any special permission granted to the holder of such a certificate under section 60 of that Act, a reference to a licence granted under Part III of that Act (which relates to seamen's canteens), and a reference to a special permission granted under section 18 of the Licensing (Scotland) Act 1962 ; in the application of this Act to Northern Ireland mean a licence or justices' certificate corresponding to the relevant licence such as is mentioned in paragraph (a) of this definition.

8

In section 307(1), for the paragraph beginning " registered club " there shall be substituted the following paragraph:—

• " registered club " means a club which is for the time being registered within the meaning of the Licensing Act 1964 or which is for the time being a registered club within the meaning of the Licensing (Scotland) Act 1959 or which is for the time being a registered club within the meaning of the Registration of Clubs Acts (Northern Ireland) 1904 to 1966.

9

In section 307(1), for the paragraph beginning " retailer " there shall be substituted the following paragraph :—

• " retailer " means— in relation to intoxicating liquor, a person who sells such liquor by retail; in relation to methylated spirits, a person holding a licence under section 117 of this Act.

B. The Finance Act 1959 (7 & 8 Eliz. 2. c. 58)

10

In section 3, for so much of subsection (4) as precedes the table set out therein there shall be substituted the following—

(4) A dealer shall not be entitled to relief from duty under subsection (2) or subsection (3) of section 169 of the Customs and Excise Act 1952 unless his trade is discontinued within nine months after the commencement of the licence year; and notwithstanding anything in subsection (5) of that section the relief shall consist of such proportion of the full amount of duty for the year as is specified in the following table in relation to the month during which the trade is discontinued, that is to say—

C. The Finance Act 1960 (8 & 9 Eliz. 2. c. 44)

11

In section 3(1)(a), for the words " under a retailer's licence " there shall be substituted the words " by retail ".

D. Application to Northern Ireland

12

For the avoidance of doubt it is hereby declared that the provisions of this Schedule other than paragraphs 1 and 10 thereof extend to Northern Ireland but, so far as they relate to matters with respect to which the Parliament of Northern Ireland has power to make laws, shall be deemed for the purposes of section 6 of the Government of Ireland Act 1920 to have been passed before the day appointed for the purposes of that section.

SCHEDULE 7

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5

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6

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7

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8

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9

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10

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12

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13

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14

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18

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19

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20

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21

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22

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23

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Transitional provision

24

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SCHEDULE 8

A. The Licensing (Scotland) Act 1959 (7 & 8 Eliz. 2. c. 51)

1

At the end of section 57, there shall be added the following proviso:—

Provided also that the holder of an off-sale certificate may not sell spirits or wine (including British wine within the meaning of the Customs and Excise Act 1952) in open vessels ; and any such holder who does so shall be liable on a first conviction to a fine not exceeding ten pounds, and on a subsequent conviction to a fine not exceeding twenty pounds.

2

In section 66(1), for the words " a kind of retailer's on-licence other than that requested by the applicant " there shall be substituted the words " the types of liquor (including, if the court thinks fit, types of liquor other than those in respect of which the application for the licence was made) which may be sold under the licence. ".

3

In section 68(1), for the words " licences " and " those licences " there shall be substituted respectively the words " licence " and " that licence ".

4

In section 69, for paragraphs (b) and (c) there shall be substituted the following—