Finance Act 1970

Part I — Customs and Excise

Alteration of general betting duty and repeal of betting premises licence duty

1

Gaming licence duty

2

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

• (9) Part II of Schedule 1 to this Act shall have effect for supplementing the provisions of this section (in that Schedule called “the principal section").

• (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Gaming machines

3

Tobacco substitutes

4

Miscellaneous amendments of law relating to customs and excise

5

Angostura bitters

6

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

• (2) Angostura bitters shall be deemed not to be spirits for the purposes of—

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

• (b) the Licensing (Scotland) Act 1976... and any other enactment (whether passed before or after the commencement of this Act) in which “spirits” has the same meaning as in that Act;

and accordingly angostura bitters shall be treated as a non-intoxicating drink for the purposes of the enactments specified in paragraph (b) above.

Decimal currency: customs and excise

7

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

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

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

• (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Hover vehicles: relief from duty on oils

8

Amendments relating to vehicles excise duty etc.

9

Continuation of powers under section 9 of Finance Act 1961

10

Part II — Income Tax and Corporation Tax

Chapter I — General

Charge of income tax for 1970-71

11–14

Surtax rates for 1969-70

12

• (1) Subject to subsection (2) below, income tax for the year 1969-70 shall be charged, in the case of an individual whose total income exceeded £2,500, at a rate, for every £1 of each part specified in the following Table of the excess of that income over £2,000, equal to the standard rate for that year plus the additional rate so specified for that part.

Part of excess	Additional rate
The first £500	10%
The next £500	12.5%
The next £1,000	17.5%
The next £1,000	22.5%
The next £1,000	27.5%
The next £2,000	32.5%
The next £2,000	37.5%
The next £2,000	42.5%
The next £3,000	47.5%
The remainder	50%

• (2) An individual whose total income for the year 1969-70 did not exceed £2,681 shall be entitled to have the surtax chargeable by virtue of subsection (1) above reduced to an amount equal to 40 per cent, of the difference between his total income and £2,500.

• (3) By reason of subsection (1) above, in section 2(1) of the Income Tax Act 1952 (effect, for years preceding 1970-71, of Act charging tax at a standard rate and, in the case of an individual whose total income exceeds a stated amount, at a higher rate or rates in respect of any part or parts of his income in excess of that amount), the words " in excess of that amount" shall be omitted.

Charge of corporation tax for financial year 1969

13

Corporation, tax shall be charged for the financial year 1969 at the rate of 45 per cent.

Alterations of personal reliefs

14

• (1) For the year 1970-71 and subsequent years of assessment, Chapter II of Part I of the Taxes Act (personal reliefs) shall have effect subject to the following amendments: —

• (a) in section 8 (married and single relief)—

• (i) in subsection (1)(a) (married), for the reference to £375 there shall be substituted a reference to £465,

• (ii) in subsection (1)(b) (single), for the reference to £255 there shall be substituted a reference to £325,

• (iii) in subsection (2) (wife's earned income relief), for the reference to £255 there shall be substituted a reference to £325, and

• (iv) in subsection (3) (amount of married relief in year of marriage), for the words "reduced by £10 for each month of the year ending before the date of the marriage " there shall be substituted " reduced, for each month of that year ending before the date of the marriage, by one-twelfth of the amount by which it exceeds the sum specified in paragraph (b) of that subsection ".

• (b) section 22 (reduced rate relief) shall cease to have effect, and, in section 5 (introductory), for the reference to sections 6 to 22 there shall be substituted a reference to sections 6 to 21;

• (c) in section 7 (relief for persons over 65 with small incomes)—

• (i) for the references to £425 and £680 (income limits for exemption) there shall be substituted references to £475 and £740,

• (ii) for the reference to £265 (the excess over those limits beyond which relief by reduction of tax is excluded) there shall be substituted a reference to £255, and

• (iii) for the reference to nine-twentieths (the fraction governing relief by reduction of tax) there shall be substituted a reference to 50 per cent.;

• (d) in section 6(2) (relief for small incomes), for the reference to £710 (the income limit for marginal relief) there shall be substituted a reference to £750, and for the reference to one-half (the fraction governing marginal relief) there shall be substituted a reference to 55 per cent.;

• (e) in section 16 (relief for dependent relative), for the reference in subsection (1) to £245 (lower income limit of dependent relative) there shall be substituted a reference to £260, for the references in subsections (1) and (2) to £320 (the normal higher income limit) there shall be substituted references to £335, and for the reference in subsection (2) to £355 (the higher income limit where the claimant is a woman other than a married woman living with her husband) there shall be substituted a reference to £370 ; and

• (f) in section 14(1)(a) (additional relief for widows and others in respect of children: relief excluded in the case of a woman who is not a widow unless in full time occupation or totally incapacitated), the words from " except that it does not apply " to " physical or mental infirmity " shall be omitted.

• (2) The amounts of tax deductible or repayable under section 204 of the Taxes Act (pay as you earn) before 6th July 1970 shall be deemed not to have been affected by the provisions of subsection (1) above other than paragraph (e), but this subsection shall not prevent any necessary correction being made on or after that day by adjusting subsequent deductions or repayments under that section, or, if need be, by an assessment.

Increase in initial allowances for industrial buildings

15

Public transport undertakings

16

Interest relief: loans for purchase or improvement of land

17

Miscellaneous amendments of income tax and corporation tax law

18

Schedule 4 to this Act (which contains amendments of the Taxes Act and of the Capital Allowances Act 1968) shall have effect.

Chapter II

Conditions for approval of schemes

19–26

Discretionary approval

20

• (1) The Board may, if they think fit, having regard to the facts of a particular case, and subject to such conditions, if any, as they think proper to attach to the approval, approve a retirement benefits scheme for the purposes of this Chapter notwithstanding that it does not satisfy one or more of the prescribed conditions.

• (2) The Board may in particular approve by virtue of this section a scheme—

• (a) which exceeds the limits imposed by the prescribed conditions as respects benefits for less than 40 years' service, or

• (b) which exceeds the limits imposed by the prescribed conditions as respects benefits payable on the death of the employee, and in particular which provides a pension for the employee's widow, or

• (c) which provides for the return in certain contingencies of employees' contributions, or

• (d) which relates to a trade or undertaking carried on only partly in the United Kingdom, and by a person not resident in the United Kingdom.

• (3) In applying this section to an existing scheme the Board shall exercise their discretion, in such cases as appear to them appropriate, so as—

• (a) to preserve benefits earned or rights arising out of service before approval under this Chapter or before the date on which section 23 of this Act comes into force, whichever is the earlier, and

• (b) to preserve any rights to death-in-service benefits conferred by rules of the scheme in force on 26th February 1970.

Certain approved schemes: exemptions and reliefs

21

• (1) This section has effect as respects—

• (a) any approved scheme which is shown to the satisfaction of the Board to be established under irrevocable trusts, or

• (b) any other approved scheme as respects which the Board, having regard to any special circumstances, direct that this section shall apply,

and any scheme which is for the time being within paragraph (a) or (b) above is in this Chapter referred to as an " exempt approved scheme ".

• (2) Exemption from income tax shall, on a claim being made in that behalf, be allowed in respect of income derived from investments or deposits if, or to such extent as the Board are satisfied that, it is income from investments or deposits held for the purposes of the scheme.

• (3) Any sum paid by an employer by way of contribution under the scheme shall for the purposes of Case I or II of Schedule D, and of the provisions of Chapter I of Part )(II of the Taxes Act relating to expenses of management, be allowed to be deduoted as an expense, or expense of management, incurred in the chargeable period in which the sum is paid:

Provided that—

• (a) the amount of an employer's contributions which may be so deducted shall not exceed the amount contributed by him under the scheme in respect of employees in a trade or undertaking in respect of the profits of which the employer is assessable to tax (that is to say United Kingdom income tax or corporation tax),

• (b) a sum not paid by way of an ordinary annual contribution shall for the purposes of this subsection be treated, as the Board may direct, either as an expense incurred in the chargeable period in which the sum is paid, or as an expense to be spread over such period of years as the Board think proper.

• (4) Any ordinary annual contribution paid under the scheme by an employee shall, in assessing tax under Schedule E, be allowed to be deducted as an expense incurred in the year of assessment in which the contribution is paid.

• (5) Relief shall not be given under section 19 or 20 of the Taxes Act (life assurance premiums and other payments) in respect of any payment in respect of which an allowance can be made under subsection (4) above.

• (6) There shall be exempt from tax chargeable under Case VII of Schedule D any gain accruing to a person from his acquisition and disposal of investments if, or to such extent as the Board are satisfied that, the investments are or were held by him or on his behalf for the purposes of the scheme.

• (7) For the purposes of capital gains tax a gain shall not be a chargeable gain where it accrues to a person on his disposal of investments if, or to such extent as the Board are satisfied that, those investments were held by him or on his behalf for the purposes of the scheme.

• (8) Nothing in this section shall be construed as affording relief in respect of any sums to be brought into account under section 314 of the Taxes Act (pension business of insurance companies).

• (9) This section has effect only as respects income arising or gains accruing or contributions paid at a time when the scheme is an exempt approved scheme.

• (10) Neither section 208 nor 209 of the Taxes Act (relief for superannuation funds and statutory pension schemes) shall apply as respects an exempt approved scheme, and the said section 208 shall cease to have effect on 6th April 1972 or such later date as the Treasury may by order in a statutory instrument made before 6th April 1972 appoint.

• (11) Neither subsection (1) nor subsection (2) of section 220 of the Taxes Act (which will be superseded by section 23 of this Act) shall apply to an approved scheme.

Certain statutory schemes: exemptions and reliefs

22

• (1) This section has effect as respects any statutory scheme established under a public general Act.

• (2) Any contribution paid under the scheme by any officer or employee shall, in assessing tax under Schedule E, be allowed to be deducted as an expense incurred in the chargeable period for which the contribution is paid and relief shall not be given under section 19 or 20 of the Taxes Act in respect of any contribution allowable as a deduction under this subsection.

• (3) This section has effect subject to section 210 of the Taxes Act (disallowance of contributions for widows' and other pensions).

• (4) This section shall come into force on such date as the Treasury may by order in a statutory instrument appoint.

Taxation in respect of certain schemes

23

• (1) Subject to the provisions of this Chapter, where, pursuant to a retirement benefits scheme, the employer in any year of assessment pays a sum with a view to the provision of any relevant benefits for any employee of that employer, then (whether or not the accrual of the benefits is dependent on any contingency)—

• (a) the sum paid, if not otherwise chargeable to income tax as income of the employee, shall be deemed for all the purposes of the Income Tax Acts to be income of that employee for that year of assessment and assessable to tax under Schedule E, and

• (b) where the payment is made under such an insurance or contract as is mentioned in section 19 of the Taxes Act, relief, if not otherwise allowable, shall be given to that employee under the said section 19 in respect of the payment to the extent, if any, to which such relief would have been allowable to him if the payment had been made by him and the insurance or contract under which the payment is made had been made with him.

• (2) Subject to the provisions of this Chapter, where—

• (a) the circumstances in which any relevant benefits under a retirement benefits scheme are to accrue are not such as will render the benefits assessable to income tax under Schedule E as emoluments of the employee in respect of whom the benefits are paid, and

• (b) the provision of those benefits is not, or is not fully, secured by the payment of sums by the employer with a view to the provision of those benefits,

then (whether or not the accrual of the benefits is dependent on any contingency) an amount equal to the cost, estimated in accordance with subsection (3) below, of securing the provision by a third person of the benefits or, as the case may be, of the benefits so far as not already secured by the payment of such sums as are mentioned in subsection (1) above, shall be deemed for all purposes of the Income Tax Acts to be income of the employee for the year or years of assessment specified in the said subsection (3) and assessable to income tax under Schedule E.

• (3) The cost referred to in subsection (2) above shall be estimated either—

• (a) as an annual sum payable in each year of assessment in which the scheme in question is in force or the employee is serving, up to and including the year of assessment in which the benefits accrue or there ceases to be any possibility of the accrual thereof, or

• (b) as a single sum payable in the year of assessment in which falls the date when the employee acquired the right to the relevant benefits, or the date when he acquired the right to any increase in the relevant benefits,

as may be more appropriate in the circumstances of the case.

• (4) Where the employer pays any sum as mentioned in subsection (1) above in relation to more than one employee, the sum so paid shall, for the purpose of that subsection, be apportioned among those employees by reference to the separate sums which would have had to be paid to secure the separate benefits to be provided for them respectively, and the part of the sum apportioned to each of them shall be deemed for that purpose to have been paid separately in relation to that one of them.

• (5) Any reference in this section to the provision for an employee of relevant benefits includes a reference to the provision of benefits payable to that employee's wife or widow, children, dependants or personal representatives.

• (6) This section shall come into force on 6th April 1972 or such later date as the Treasury may appoint by order in a statutory instrument made before 6th April 1972, and shall so come into force both for schemes set up before the date so appointed and schemes set up later.

Exceptions from charge to tax under last preceding section

24

• (1) Neither subsection (1) nor subsection (2) of the last preceding section shall apply where the retirement benefits scheme in question is—

• (a) an approved scheme, or

• (b) a statutory scheme, or

• (c) a scheme set up by a Government outside the United Kingdom for the benefit, or primarily for the benefit, of its employees.

• (2) Neither subsection (1) nor subsection (2) of the last preceding section shall apply for any year of assessment where, apart from those subsections, the employee is not assessable to tax for that year under Case I or II of Schedule E in respect of the emoluments of his employment.