Finance Act 1973

• (3) If, at any time within the period of five years beginning with the occurrence of a chargeable transaction which is an exempt transaction falling within paragraph (a)(i) of sub-paragraph (1) above, the acquiring company—

• (a) ceases to retain at least 75 per cent, of the issued share capital of the acquired company, or

• (b) disposes of any of the shares in the acquired company which it held immediately after the occurrence of the chargeable transaction,

duty shall then become chargeable, and shall be payable in accordance with sub-paragraph (4) below ; but for the purpose of determining whether paragraph (a) or paragraph (b) above applies, any disposal of shares shall be disregarded if it is effected—

• (i) by a transfer forming part of a chargeable transaction which is itself an exempt transaction by virtue of any provision of sub-paragraph (1) above, or

• (ii) in the course of the winding-up of the acquiring company.

• (4) If sub-paragraph (3) above applies, then, within one month of the date on which the holding of share capital referred to in paragraph (a) of that sub-paragraph first falls below 75 per cent, or, as the case may be, the date of the first disposal of any of the shares referred to in paragraph (b) of that sub-paragraph (in this paragraph referred to as "the date of charge"), there shall be paid to the Commissioners duty corresponding to the stamp duty which would have been charged under subsection (5) of section 47 of this Act on the relevant document if the chargeable transaction had not been an exempt transaction.

• (5) If sub-paragraph (4) above applies, subsection (7) of section 47 of this Act shall apply—

• (a) as if the chargeable transaction had never been an exempt transaction; and

• (b) as if for the reference in that subsection to the date of the transaction there were substituted a reference to the date of charge;

and, in addition, interest on the duty payable under that sub-paragraph at the rate of 5 per cent, per annum from the date when the chargeable transaction occurred to the date of charge shall be a debt due to Her Majesty from the acquiring company.

PART IV — Supplementary Provisions

11

Where, in pursuance of a compromise or arrangement falling within section 206 of the Companies Act 1948 or otherwise, shares in a capital company are allotted to any persons in consideration of either the surrender by them or the cancellation of their shares in another company, then, for the purposes of Parts I to III above, the shares so surrendered or cancelled shall be treated as being acquired by the capital company in exchange for the shares so allotted and, accordingly, as being assets contributed by those persons.

12

If, on the occasion of a chargeable transaction falling within any of sub-paragraphs (a) to (c) of paragraph 1 above, any person undertakes to contribute assets of any kind to a capital company at some future time, whether certain or uncertain, then—

• (a) for the purposes of the application of paragraph 4 above in relation to that chargeable transaction, the giving of the undertaking shall not be treated as the contribution of an asset to the capital company ; and

• (b) if, apart from this sub-paragraph, the making of a contribution to the assets of the capital company concerned in pursuance of the undertaking would not be a chargeable transaction, it shall be deemed for the purposes of section 47 of this Act and this Schedule to be a chargeable transaction falling within paragraph 1(c) above.

13

To the extent that the conveyance or transfer of assets to a capital company forms part of a chargeable transaction falling within sub-paragraph (a) or sub-paragraph (b) of paragraph 1 above and is made in consideration of the issue of shares in the company, no stamp duty shall be chargeable under the heading " Conveyance or Transfer on sale" in Schedule 1 to the Stamp Act 1891 on any instrument giving effect to the conveyance or transfer except in so far as the consideration is referable to the conveyance or transfer of—

• (a) stock or securities, or

• (b) the whole or any part of an undertaking, or

• (c) any estate or interest in land.

PART V — Consequential Amendments

14

In subsection (4) of section 58 of the Companies Act 1948 (issue of shares in pursuance of that subsection to the nominal amount of redeemed preference shares not to be an increase in share capital for purposes of enactments relating to stamp duty) for the words from " the share capital" to " pursuance of this subsection " there shall be substituted the words " for the purposes of section 47 of the Finance Act 1973 the issue of shares in pursuance of this subsection shall constitute a chargeable transaction if, and only if, the actual value of the shares so issued exceeds the value of the preference shares at the date of their redemption, and, where the issue of the shares does constitute a chargeable transaction for the purposes of that section, the amount on which stamp duty on the relevant document relating to that transaction is chargeable under subsection (5) of that section shall be the difference between—

• (a) the amount on which that duty would be so chargeable if no preference shares had been or were about to be redeemed; and

• (b) the value of the preference shares at the date of their redemption."

15

In subsection (2) of section 40 of the Iron and Steel Act 1967 (no stamp duty chargeable in certain cases where a company is formed by the British Steel Corporation or the amount of the nominal share capital of a subsidiary of the Corporation is increased) the words " to be ", in both places where they occur, and the words " nominal share", in the first place where they occur, shall be omitted and for the words from " on so much " to the end of the subsection there shall be substituted the words " under section 47 of the Finance Act 1973 on any document relating to a chargeable transaction consisting of the formation of the company or the increase of capital except to the extent to which, in the opinion of the Treasury, the transaction goes beyond what is necessary for achieving that purpose ".

16

In subsection (2) of section 160 of the Transport Act 1968 (no stamp duty chargeable in certain cases) for paragraphs (a) and (b) there shall be substituted the words " under section 47 of the Finance Act 1973 in respect of the amount which is to form the capital of a company or in respect of any increase in the capital of a company ".

17

In subsection (2) of section 22 of the Atomic Energy Authority Act 1971 (no stamp duty chargeable in respect of any increase in nominal share capital of Nuclear Fuels Company or Radiochemical Company which is effected for purpose of issuing shares to Atomic Energy Authority) for the words "section 112 of the Stamp Act 1891 " there shall be substituted the words " section 47 of the Finance Act 1973 " and the words " nominal share " shall be omitted.

18

In subsection (3) of section 33 of the Gas Act 1972 (no stamp duty chargeable in certain cases where a subsidiary is formed by the British Gas Corporation or the amount of the nominal share capital of a subsidiary is increased) the words " to be ", in both places where they occur, and the words " nominal share ", in the first place where they occur, shall be omitted and for the words from " on so much " to the end of the subsection there shall be substituted the words " under section 47 of the Finance Act 1973 on any document relating to a chargeable transaction consisting of the formation of the subsidiary or the increase of capital except to the extent to which, in the opinion of the Treasury the transaction goes beyond what is necessary for achieving that purpose.

SCHEDULE 20

1

In this Schedule "the principal section" means section 51 of this Act.

2

So far as the principal section relates to a determination falling within paragraph (a) of subsection (1) thereof, the principal section applies in the case of deaths on or after 6th July 1973.

3

So far as the principal section relates to a determination falling within paragraph (b) of subsection (1) thereof, the principal section applies, subject to paragraph 7 below, on the disposal of any asset on or after 6th July 1973.

4

Subject to paragraphs 5 and 6 below, if the market value of an asset or any part of it at the time of its acquisition is material to the computation of any chargeable gain accruing on a disposal of the asset on or after 6th July 1973 then, notwithstanding that the acquisition may have occured before that date or that the market value at that time may have been fixed for the purposes of a contemporaneous disposal, subsection (3) of the principal section shall apply for the purposes of the determination of the market value of the asset or, as the case may be, that part of it at the time of its acquisition

5

• (1) This paragraph applies if, in a case where the market value of an asset at the time of its acquisition is material as mentioned in paragraph 4 above.—

• (a) the acquisition took place on the occasion of a death occurring after 30th March 1971 and before 6th July 1973, and

• (b) by virtue of section 26 of the Finance Act 1965, the principal value of the asset for the purposes of estate duty on that death would, apart from this paragraph, be taken to be the market value of the asset at the date of 'the death for the purposes of Part III of that Act.

• (2) If the principal value referred to in sub-paragraph (1)(b) above falls to be determined as mentioned in section 55 of the Finance Act 1940 or section 15 of the Finance (No. 2) Act (Northern Ireland) 1946 (certain controlling shareholdings to be valued on an assets basis), nothing in the principal section shall affect the operation of section 26 of the Finance Act 1965 for the purpose of determining the market value of the asset at the date of the death.

• (3) If sub-paragraph (2) above does not apply, section 26 of the Finance Act 1965 shall not apply as mentioned in sub-paragraph (1)(b) above and the market value of the asset on its acquisition at the date of the death shall be determined in accordance with section 44 of that Act and paragraph 4 above.

6

• (1) In any case where—

• (a) before 6th July 1973 there has been a part disposal of an asset to which the principal section applies (in this paragraph referred to as " the earlier disposal "), and

• (b) by virtue of any enactment, the acquisition of the asset or any part of it was deemed to be for a consideration equal to its market value, and

• (c) on or after 6th July 1973 there is a disposal (including a part disposal) of the property which remained undisposed of immediately before that date (in this paragraph referred to as " the later disposal "),

sub-paragraph (2) below shall apply in computing any chargeable gain accruing on the later disposal (but not so as to affect the amount of any chargeable gain accruing on the earlier disposal).

• (2) Where this sub-paragraph applies, the apportionment made by virtue of paragraph 7 of Schedule 6 to the Finance Act 1965 on the occasion of the earlier disposal shall be recalculated on the basis that subsection (3) of the principal section was in force at the time, and applied for the purposes, of the determination of—

• (a) the market value referred to in sub-paragraph (1)(b) above ; and

• (b) the market value of the property which remained undisposed of after the earlier disposal; and

• (c) if the consideration for the earlier disposal was, by virtue of any enactment, deemed to be equal to the market value of the property disposed of, that market value.

7

In any case where—

• (a) before 6th July 1973 there has been a disposal of an asset to which the principal section applies, and

• (b) immediately before that date the amount of any gain or loss accruing on the disposal has not been finally determined for the purposes of Part III of the Finance Act 1965, and

• (c) the application of this paragraph would result in a smaller gain or a greater loss accruing on the disposal than if this paragraph did not apply,

then, notwithstanding that any market value material to the determination referred to in paragraph (b) above may have been fixed for the purposes of any acquisition which was contemporaneous with the disposal, this Schedule shall have effect as if for any reference in paragraphs 3, 4 and 6 above to 6th July 1973 there were substituted a reference to the date of the disposal.

8

If, apart from this paragraph, section 26(3) of the Finance Act 1965, as originally enacted (market value determined for capital gains tax purposes on a death to be treated as principal value for estate duty purposes), would apply in a case where, by virtue of paragraph 4, paragraph 6 or paragraph 7 above, subsection (3) of the principal section applies for the purposes of the determination of the market value (for the purposes of tax on chargeable gains) of an asset on the date of a death occurring on or before 30th March 1971, the said section 26(3) shall not apply and the principal value of the asset for the purposes of estate duty on that death shall be determined as if that section had not been enacted.

SCHEDULE 21

1

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

2

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

3

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

4

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

5

In section 21 of the Taxes Management Act 1970—

• (a) the words “or dealing broker”, wherever they occur, and the definition of “dealing broker” in subsection (7) shall be omitted; and

• (b) for the definitions of “broker” and “jobber” in subsection (7) there shall be substituted the following:—

“broker” means a member of The Stock Exchange who carries on his business in the United Kingdom and is not a jobber; “jobber” means a member of The Stock Exchange who is recognised by the Council thereof as carrying on the business of a jobber and carries on that business in the United Kingdom

.

6

In section 472(2) of the Taxes Act—

• (a) for paragraph (b) there shall be substituted the following paragraph :—

(b) is a member of The Stock Exchange who is recognised by the Council thereof as carrying on the business of a jobber

; and

• (b) paragraph (c) and the words from " and, in the case " to the end shall be omitted.

7

In section 475(3) and (5) of the Taxes Act for the words " quoted in the official list of the London Stock Exchange " there shall be substituted the words " listed in The Stock Exchange Daily Official List ".

8

In section 477 of the Taxes Act—

• (a) the words " or dealing broker ", in both places where they occur in subsection (3), and the definition of "dealing broker " in subsection (6) shall be omitted ; and

• (b) for the definitions of " broker " and " jobber " in subsection (6) there shall be substituted the following :—

• ' broker ' means a member of The Stock Exchange who carries on his business in the United Kingdom and is not a jobber;
• ' jobber ' means a member of The Stock Exchange who is recognised by the Council thereof as carrying on the business of a jobber

.

9

In section 535(1) of the Taxes Act for the words from " has the same meaning " to the end of paragraph (a) there shall be substituted the words

means— (a) The Stock Exchange, and

.

SCHEDULE 22

PART I — Revenue Duties

PART II — INCOME TAX AND CORPORATION TAX

PART III — UNDERWRITERS

PART IV — THE STOCK EXCHANGE

Part V — Stamp Duty

PARTS I AND II

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

4

10

33

General Commissioners’ divisions.

39

45

47

52

SCHEDULE 5.

4A

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

7A

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

8A

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

SCHEDULE 16A

Preliminary

1

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

Returns by agent

2

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

Payments on account of tax

3

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

Determinations by inspector

4

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

Appeals

5

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

Modification of determinations pending appeal

6

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

Apportionments of syndicate profit or loss

7

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

Individual members: effect of determinations

8

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

Assessment of individual members: time limits

9

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

Suppleptiental: penalties

10

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

Supplemental: interest

11

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

6

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

These repeals have effect for the year 1973-74 and subsequent years of assessment and, so far as they relate to proviso (a) of paragraph 7(2) and paragraph 11(2)(a)(iii), also for the year 1972-73.

1

Subject to paragraphs 2 and 3 below, these repeals have effect on and after 1st August 1973 but do not apply in relation to any case where stamp duty may be chargeable after that date in accordance with subsection (1) of section 49 of this Act.

2

In so far as they relate to duty chargeable—

• (a) by virtue of the heading “Marketable Security” in Schedule 1 to the Stamp Act 1891, and

• (b) under section 8 of the Finance Act 1899 (on loan capital), these repeals shall be deemed to have had effect on and after 1st January 1973.

3

These repeals are without prejudice to subsections (3)(a) and (9) of section 49 of this Act.

Editorial notes

These repeals have effect for the year 1973-74 and subsequent years of assessment and, so far as they relate to proviso (a) of paragraph 7(2) and paragraph 11(2)(a)(iii), also for the year 1972-73.

These repeals have effect for the year 1973-74 and subsequent years of assessment and, so far as they relate to proviso (a) of paragraph 7(2) and paragraph 11(2)(a)(iii), also for the year 1972-73.