Finance Act 1975

• (1) Where a disposition made for a consideration in money or money's worth is a transfer of value and any payments made or assets transferred by the transferor in pursuance of the disposition are made or transferred more than one year after the disposition is made, tax (if any) shall be charged as if—

• (a) any payment made or asset transferred in pursuance of the disposition were made or transferred in pursuance of a separate disposition made, without consideration, at the time the payment is made or the asset is transferred ; and

• (b) the amount of the payment made or the value of the asset transferred in pursuance of each of those separate dispositions were the chargeable portion of the payment or asset.

• (2) For the purposes of this section the chargeable portion of any payment made or any asset transferred at any time shall be such portion of its value at that time as is found by applying to it the fraction of which—

• (a) the numerator is the value actually transferred by the disposition first mentioned in subsection (1) above (calculated as if no tax were payable on it); and

• (b) the denominator is the value, at the time of that disposition, of the aggregate of the payments made or to be made and assets transferred or to be transferred by the transferor in pursuance of it.

Free loans etc.

41

• (1) Where a person, otherwise than in a transaction at arm's length between persons not connected with each other, allows another the use of money or other property without consideration in money or money's worth or for a consideration less than could reasonably be expected in such a transaction, he shall be treated as making a transfer of value in every chargeable period in which he allows that use; and—

• (a) the value transferred thereby shall be the difference between the amount of the consideration (if any) for that period and that of the consideration that might be so expected; and

• (b) the transfer shall be treated as being made at the end of the chargeable period or, if earlier, at the time when that use comes to an end ; and

• (c) the transfer shall be treated as made out of the transferor's income.

• (2) In this section " chargeable period ", in relation to any use, means the period beginning when the use is begun and ending with 5th April next following, and every subsequent period of twelve months ending with 5th April, but no period beginning before 6th April 1976 shall be a chargeable period.

Annuity purchased in conjunction with life policy

42

• (1) Where—

• (a) a policy of life insurance is issued in respect of an insurance made on or after 27th March 1974 or is on or after that date varied or substituted for an earlier policy; and

• (b) at the time the insurance is made or at any earlier or later date an annuity on the life of the insured is purchased; and

• (c) the benefit of the policy is vested in a person other than the person who purchased the annuity;

then, unless it is shown that the purchase of the annuity and the making of the insurance (or, as the case may be, the substitution or variation) were not associated operations, the person who purchased the annuity shall be treated as having made a transfer of value by a disposition made at the time the benefit of the policy became so vested (to the exclusion of any transfer of value which, apart from this section, he might have made as a result of the vesting or of the purchase and the vesting being associated operations).

• (2) The value transferred by that transfer of value shall be equal to whichever of the following is less, namely.—

• (a) the aggregate of—

• (i) the value of the consideration given for the annuity; and

• (ii) any premium paid or other consideration given under the policy on or before the transfer; and

• (b) the value of the greatest benefit capable of being conferred at any time by the policy, calculated as if that time were the date of the transfer.

• (3) The preceding provisions of this section shall apply, with the necessary modifications, where a contract for an annuity payable on a person's death is on or after 27th March 1974 made or varied or substituted for or replaced by such a contract or a policy of life insurance as they apply where a policy of life insurance is issued, varied or substituted as mentioned in subsection (1) above.

Miscellaneous

Chargeable transfers affecting more than one property

43

• (1) Where the value transferred by a chargeable transfer is determined by reference to the values of more than one property the tax chargeable on the value transferred shall be attributed to the respective values in the proportions which they bear to their aggregate, but subject to any provision reducing the amount of tax attributable to the value of any particular property.

• (2) Where the value transferred by more than one chargeable transfer made by the same person on the same day depends on the order in which the transfers are made, they shall be treated as made in the order which results in the lowest value chargeable.

Associated operations

44

• (1) In this Part of this Act " associated operations " means, subject to subsection (2) below, any two or more operations of any kind, being—

• (a) operations which affect the same property, or one of which affects some property and the other or others of which affect property which represents, whether directly or indirectly, that property, or income arising from that property, or any property representing accumulations of any such income; or

• (b) any two operations of which one is effected with reference to the other, or with a view to enabling the other to be effected or facilitating its being effected, and any further operation having a like relation to any of those two, and so on;

whether those operations are effected by the same person or different persons, and whether or not they are simultaneous ; and " operation " includes an omission.

• (2) The granting of a lease for full consideration in money or money's worth shall not be taken to be associated with any operation effected more than three years after the grant, and no operation effected on or after 27th March 1974 shall be taken to be associated with an operation effected before that date.

• (3) Where a transfer of value is made by associated operations carried out at different times it shall be treated as made at the time of the last of them; but where any one or more of the earlier operations also constitute a transfer of value made by the same transferor, the value transferred by the earlier operations shall be treated as reducing the value transferred by all the operations taken together, except to the extent that the transfer constituted by the earlier operations but not that made by all the operations taken together is exempt under paragraph 1 of Schedule 6 to this Act.

Persons treated as domiciled in the United Kingdom

45

• (1) Except as otherwise provided, a person not domiciled in the United Kingdom at any time (in this section referred to as " the relevant time ") shall be treated for the purposes of this Part of this Act as domiciled in the United Kingdom at the relevant time if—

• (a) he was domiciled in the United Kingdom on or after 10th December 1974 and within the three years immediately preceding the relevant time; or

• (b) he was resident in the United Kingdom on or after 10th December 1974 and in not less than seventeen of the twenty years of assessment ending with the year of assessment in which the relevant time falls ; or

• (c) he has, since 10th December 1974, become and has remained domiciled in the Islands and, immediately before becoming domiciled there, he was domiciled in the United Kingdom.

• (2) For the purposes of subsection (1)(b) above the question whether a person was resident in the United Kingdom in any year of assessment shall be determined as for the purposes of income tax, but without regard to any dwelling-house available in the United Kingdom for his use.

• (3) In this section " the Islands " means the Channel Islands and the Isle of Man.

Disposition for maintenance of family

Dispositions for maintenance of family

46

• (1) A disposition is not a transfer of value if it is made by one party to a marriage in favour of the other party or of a child of either party and is—

• (a) for the maintenance of the other party, or

• (b) for the maintenance, education or training of the child for a period ending not later than the year in which he attains the age of eighteen or, after attaining that age, ceases to undergo full-time education or training.

• (2) A disposition is not a transfer of value if it is made in favour of a child who is not in the care of a parent of his and is for his maintenance, education or training for a period ending not later than the year in which—

• (a) he attains the age of eighteen ; or

• (b) after attaining that age he ceases to undergo full-time education or training;

but paragraph (b) above applies only if before attaining that age the child has for substantial periods been in the care of the person making the disposition.

• (3) A disposition is not a transfer of value if it is made in favour of a dependent relative of the person making the disposition and is a reasonable provision for his care or maintenance.

• (4) A disposition is not a transfer of value if it is made in favour ©f an illegitimate child of the person making the disposition and is for the maintenance, education or training of the child for a period ending not later than the year in which he attains the age of eighteen or, after attaining that age, ceases to undergo full-time education or training.

• (5) Where a disposition satisfies the conditions of the preceding provisions of this section to a limited extent only so much of it as satisfies them and so much of it as does not satisfy them shall be treated as separate dispositions; and where a disposition satisfying those conditions is a disposal of an interest in possession in settled property, the interest shall not, by virtue of paragraph 4(1) of Schedule 5 to this Act, be treated for the purposes of that Schedule as coming to an end.

• (6) In this section—

• " child " includes a step-child and an adopted child and " parent " shall be construed accordingly ;

• " dependent relative " means, in relation to any person, a relative of his, or of his spouse, who is incapacitated by old age or infirmity from maintaining himself, or the mother of that person, or of his spouse, if the mother is widowed or living apart from her husband, or, in consequence of dissolution or annulment of marriage, a single woman ;

• " marriage", in relation to a disposition made on the occasion of the dissolution or annulment of a marriage, and in relation to a disposition varying a disposition so made, includes a former marriage ; and

• " year " means any period of twelve months ending with 5th April.

Deeds of family arrangement, etc.

47

• (1) So far as a deed of family arrangement or similar instrument which is made not more than two years after the death of any person varies the dispositions (whether effected by will or under the law relating to intestacy) of the property of which he was competent to dispose.—

• (a) the variation shall not be a transfer of value ; and

• (b) this Part of this Act shall apply as if the variation had been effected by the deceased.

• (2) Where a legacy or any interest in a deceased person's estate is disclaimed within two years of his death and the disclaimer is not made for a consideration in money or money's worth, the disclaimer is not a transfer of value.

• (3) An election by a surviving spouse under section 47A of the Administration of Estates Act 1925 (redemption of life interest in residuary estate) is not a transfer of value ; and where such an election is made this Part of this Act shall have effect as if the surviving spouse, instead of being entitled to the life interest, had been entitled to a sum equal to the capital value mentioned in that section.

• (4) Where a person becomes entitled to an interest in settled property but disclaims the interest, then, if the disclaimer is not made for a consideration in money or money's worth, this Part of this Act shall apply as if he had not become entitled to the interest.

• (5) In relation to a death occurring before the passing of this Act but not before 10th December 1972 subsection (1) above shall have effect as if the reference to a deed of family arrangement or similar instrument made not more than two years after the death were a reference to such a deed or instrument made not more than two years after the passing of this Act.

Estate duty and obsolete death duties

Interest on repayment of estate duty and on instalments of duty

48

• (1) In relation to any period falling after 12th November 1974 any sums repayable as sums paid in excess of estate duty or interest on estate duty shall carry interest at the rate applicable under section 178 of the Finance Act 1989.

• (2) Interest paid to any person under this section shall not be income of that person for any tax purposes.

• (3) Subject to the following provisions of this section, where estate duty charged on a death occurring after 12th November 1974 is payable by instalments under section 62 of the Finance Act 1971 or section 3 of the Finance Act (Northern Ireland) 1971—

• (a) as being charged in respect of property falling within paragraph (a) or (b) of subsection (2) of that section ; or

• (b) as being attributable to the net value of a business or an interest in a business ;

it shall, for the purpose of any interest to be added to each instalment, be treated as carrying interest from the date at which the instalment is payable.

• (4) Subsection (3) above does not apply to estate duty payable in respect of shares or securities of a company falling within paragraph (a) of subsection (5) below unless it also falls within paragraph (b) or (c) of that subsection.

• (5) The companies referred to in subsection (4) above are—

• (a) any company whose business consists wholly or mainly of one or more of the following, that is to say, dealing in securities, stocks or shares, land or buildings, or making or holding investments ;

• (b) any company whose business consists wholly or mainly in being a holding company (within the meaning of section 154 of the Companies Act 1948) of one or more companies not falling within paragraph (a) above ; and

• (c) any company whose business is that of a jobber (as defined in section 477 of the Taxes Act) or discount house, and is carried on in the United Kingdom.

• (6) Subsection (3) above does not apply to estate duty charged in respect of property which, by reason of an interest which came to an end, or a gift which was made, before 13th November 1974, passes on death by virtue of section 2(1)(b)(i) or section 2(1)(c) of the Finance Act 1894.

• (7) Subsection (3) above applies only to the extent that the principal value in respect of which the duty is payable as mentioned therein does not exceed £250,000 ; and any excess shall be attributed to duty in respect of the shares, securities, business or interest concerned in proportion to their respective values.

Abolition of estate duty and transitional provisions

49

• (1) Estate duty shall not be levied on the principal value of any property passing on a death occurring after the passing of this Act ; and the enactments relating to estate duty shall have effect in relation to a death occurring before the passing of this Act but after 12th November 1974 subject to the amendments specified in Schedule 11 to this Act.

• (2) Part II of Schedule 8 to this Act shall have effect for making, in relation to deaths occurring after 12th November 1974, provisions with respect to estate duty similar to those made with respect to capital transfer tax by Part I of that Schedule.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) Where estate duty is under section 61(5) of the Finance (1909-10) Act 1910 payable on the net moneys received from the sale of timber, trees or wood when felled or cut during the period referred to therein and that period has not ended before the passing of this Act, that period shall end immediately after the first transfer of value made after the passing of this Act in which the value transferred is, or is determined by reference to, the value of the land concerned, other than a transfer exempt by virtue of paragraph 1 of Schedule 6 to this Act.

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

Final abolition of obsolete death duties

50

• (1) After the passing of this Act no person shall in any case be required to account for or pay, and the Board shall not in any case charge, levy, recover or collect—

• (a) any duty described in Schedule 1 to the Finance Act 1894 ;

• (b) any duty imposed on a representation or inventory by any Act in force before the Customs and Inland Revenue Act 1881 ;

• (c) any legacy duty, succession duty or settlement estate duty ;

(including in each case any duty which is then outstanding).

• (2) This section does not affect any right to repayment of or to any allowance in respect of any sum paid before the passing of this Act on account of any such duty.

Supplemental

Interpretation of Part III

51

Consequential amendments and repeals

52

• (1) In consequence of the preceding provisions of this Part of this Act the enactments mentioned in Schedule 12 to this Act shall have effect subject to the amendments specified therein.

• (2) The enactments mentioned in Part I of Schedule 13 to this Act are hereby repealed, to the extent specified in the third column of that Part—

• (a) in relation to deaths occurring after the passing of this Act; and

• (b) so far as they relate to the duties mentioned in section 50 of this Act, in relation to any death.

• (3) The repeal by this section of any enactment relating to a duty mentioned in section 50 of this Act shall not affect its operation for the purposes of any such right to repayment or allowance as is referred to in subsection (2) of that section.

PART IV — MISCELLANEOUS AND GENERAL

Recipient bodies referred to in Finance Act 1972, s. 119

53

Appeals on questions of value of unquoted shares or of securities

54

Local loans

55

Signature of certain requisitions and requests of the Treasury

56

Appointment of General Commissioners in Scotland, and amendment of declaration to be made by certain officers

57

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

Amendments of Vehicles (Excise) Act (Northern Ireland) 1972

58

Citation, interpretation, construction and repeals

59

• (1) This Act may be cited as the Finance Act 1975.

• (2) In this Act “the Taxes Act” means the Income and Corporation Tax Act 1970.

• (3) In this Act—

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

• (b) Part II, so far as it relates to income tax, shall be construed as one with the Income Tax Acts and, so far as it relates to corporation tax, shall be construed as one with the Corporation Tax Acts.

• (4) Except so far as the context otherwise requires, any reference in this Act to any enactment shall be construed as a reference to that enactment as amended, and as including a reference to that enactment as applied, by or under any other enactment, including this Act.

• (5) The enactments mentioned in Schedule 13 to this Act are hereby repealed to the extent specified in the third column of that Schedule, but subject to any provision at the end of any Part of that Schedule.

SCHEDULE 1

1

Any body by whom a policy to which section 7 or 8 of this Act applies has been issued shall, within thirty days of the end of the period ending with 31st March 1976 and of every subsequent period of twelve months make a return to the collector of the sums which, in that period, have become payable by it under either of those sections.

2

• (1) Any sum which is to be included in a return made under paragraph 1 above shall be due at the time by which the return is to be made and shall be paid without being demanded.

• (2) Where any sum which was or ought to have been included in such a return is not paid by the end of the period for which the return was to be made it may be recovered by an assessment as if it were income tax for the year of assessment in which that period ends; and where it appears to the inspector that a sum which ought to have been so included had not been included or that a return is not correct he may make such an assessment to the best of his judgment.

• (3) All the provisions of the Income Tax Acts relating to the assessment and collection of tax, interest on unpaid tax, appeals and penalties shall, with the necessary modifications, apply in relation to sums due under this paragraph ; and for the purposes of those provisions so far as they relate to interest on unpaid tax, a sum assessed in pursuance of this paragraph shall be treated as having been payable when it would have been payable had it been included in a return under paragraph 1 above.

• (4) Where, on an appeal against an assessment made in pursuance of this paragraph, it is determined that a greater sum has been assessed than was payable, the excess, if paid, shall be repaid.

3

Where a body has paid a sum which is payable under section 7 or 8 of this Act it shall give within thirty days to the person by whom the sum is, under section 9(4) of this Act, treated as received a statement specifying that sum and showing how it has been arrived at.

4

• (1) The Board or an inspector may, by notice in writing served on the body by whom a policy to which section 7 or 8 of this Act applies has been issued, require the body, within such time, not being less than thirty days, as may be specified in the notice—

• (a) to furnish such particulars; or

• (b) to make available for inspection by an officer authorised by the Board such books and other documents in the possession or under the control of the body ;

as the Board or officer may reasonably require for the purposes of those sections or this Schedule.

• (2) In section 98 of the Taxes Management Act 1970 (penalty for failure to furnish information) there shall be added in the first column of the Table the words " paragraph 4 of Schedule 1 to the Finance Act 1975 ".

SCHEDULE 2

PART I — Qualifying Policies—Certification

1

• (1) A policy of life insurance issued in respect of an insurance made on or after such day as the Treasury may by order made by statutory instrument appoint (in this Schedule referred to as "the appointed day ") or varied on or after the appointed day shall not be a qualifying policy within the meaning of Schedule 1 unless—

• (a) it is certified as such by the Board ; or

• (b) it conforms with a form which, at the time the policy is issued or varied, is either—

• (i) a standard form certified by the Board as a standard form of qualifying policy ; or

• (ii) a form varying from a standard form so certified in no other respect than by making such additions thereto as are, at the time the policy is issued, certified by the Board as compatible with a qualifying policy when made to that standard form and satisfy any conditions subject to which they are so certified ;

and any certificate issued in pursuance of paragraph (a) above shall be conclusive evidence that the policy is a qualifying policy within the meaning of that Schedule.

• (2) In issuing a certificate in pursuance of sub-paragraph (1) above the Board may disregard any provision of the policy, standard form or addition which appears to them insignificant.

• (3) Where the Board refuse to certify a policy as being a qualifying policy within the meaning of Schedule 1, the person to whom it is issued may appeal to the General Commissioners or, if he so elects, to the Special Commissioners.

• (4) The preceding provisions of this paragraph do not apply in relation to such a policy as is mentioned in paragraph 3 of Schedule 1 (friendly societies policies).

2

• (1) In paragraph 11(1) of Schedule 1—

• (a) for the words " which is in its opinion" there shall be substituted the words " which is certified by the Board as being ",

• (b) after the words " Part I of this Schedule " there shall be added the words " or which conforms with such a form as is mentioned in paragraph 1(1)(6) of Schedule 2 to the Finance Act 1975 and is in the opinion of the body issuing it a qualifying policy ".

• (c) after the words "allocated to the policy" there shall be inserted the words " the reference number of the relevant Inland Revenue certificate (if any " )".

• (2) In paragraph 11(2) of Schedule 1 for the words " and is in the opinion of the body by whom it was issued a qualifying policy after the variation " there shall be substituted the words " and, after the variation, it either is certified by the Board as a qualifying policy or conforms with such a form as is referred to in sub-paragraph (1) above and is in the opinion of the body by whom it was issued a qualifying policy ".

• (3) In paragraph 11(3) of Schedule 1 for "£26" there shall be substituted " £52 ".

PART II — Amendment of Qualifying Conditions

3

• (1) The following provisions of this paragraph shall have effect for determining for the purposes of Schedule 1 and this Schedule whether a policy has been varied or whether a policy which confers on the person to whom it is issued an option to have another policy substituted for it or to have any of its terms changed is a qualifying policy.

• (2) If the policy is one issued in respect of an insurance made before the appointed day—

• (a) any such option shall, until it is exercised, be disregarded in determining whether the policy is a qualifying policy ; and

• (b) any change in the terms of the policy which is made in pursuance of such an option shall be deemed to be a variation of the policy.

• (3) If the policy is one issued in respect of an insurance made on or after the appointed day, the policy shall not be a qualifying policy unless it satisfies the conditions applicable to it under Schedule 1 before any such option is exercised and—

• (a) each policy that might be substituted for it in pursuance of such an option would satisfy those conditions under the rules of paragraph 9 of that Schedule ; and

• (b) the policy would continue to satisfy those conditions under the rules of that paragraph as applied by paragraph 10 of that Schedule if each or any of the changes capable of being made in pursuance of such an option had been made and were treated as a variation ;

and it shall not be treated as being varied by reason only of any change made in pursuance of such an option.

4

• (1) In relation to any policy issued in respect of an insurance made on or after the appointed day paragraphs 1 and 2 of Schedule 1 shall have effect subject to the following provisions of this paragraph.

• (2) In paragraph for the words " sub-paragraphs (2) to (4)" there shall be substituted the words " sub-paragraphs (2) to (4A) ".

• (3) In paragraph 1 the following shall be inserted after sub-paragraph (4) :—

(4A) Except where— (a) the capital sum referred to in sub-paragraph (1) above is payable only in the circumstances mentioned in sub-paragraph (3) or (4) above, and (b) the policy does not provide for any payment on the surrender in whole or in part of the rights conferred by it, and (c) the specified term mentioned in sub-paragraph (3) or, as the case may be, (4) above ends at or before the time when the person whose life is insured attains the age of seventy-five years, the capital sum, so far as payable on death, must not be less than 75 per cent, of the total premiums that would be payable if the death occurred at the age of seventy-five years, the age being, if the sum is payable on the death of the first to die of two persons, that of the older of them, if on the death of the survivor of them, that of the younger of them, and, in any other case, that of the person on whose death it is payable; and if the policy does not secure a capital sum in the event of death occurring before the age of sixteen or some lower age, it must not provide for the payment in that event of an amount exceeding the total premiums previously paid under it.

• (4) In determining, for the purposes of sub-paragraph (3) above, whether a capital sum is less than 75 per cent, of the total premiums, any amount included in the premiums by reason of their being payable otherwise than annually shall be disregarded, and if the policy is issued in the course of an industrial assurance business as defined in section 1(2) of the Industrial Assurance Act 1923 or of the Industrial Assurance Act (Northern Ireland) 1924, 10 per cent, of the premiums payable under the policy shall be treated as so included.

• (5) In paragraph 1(5) for the words " carries a guaranteed surrender value " there shall be substituted the words " provides for a payment on the surrender in whole or in part of the rights conferred by the policy ".

• (6) In paragraph 1(7) after the words " by reason of that event" there shall be inserted the words " but where what is so payable is either an amount consisting of one sum or an amount made up of two or more sums, the 75 per cent, mentioned in sub-paragraph (4A) above shall be compared with the smaller or smallest amount so payable ".

• (7) In paragraph 2(1)(d)(i) for the words " three-quarters" there shall be substituted the words " 75 per cent. " and after the words " otherwise than annually " there shall be inserted the words " except that if, at the beginning of that term, the age of the person concerned exceeds fifty-five years, the capital sum so guaranteed may, for each year of the excess, be less by 2 per cent, of that total than 75 per cent, thereof, the person concerned being, if the capital sum is payable on the death of the first to die of two persons, the older of them, if on the death of the survivor of them, the younger of them and, in any other case, the person on whose death it is payable. "

• (8) In paragraph 2(1)(e) after the words "except by surrender" there shall be inserted the words " in whole or in part of the rights conferred by the policy ".

5

Where the new policy referred to in paragraph 9 of Schedule 1 is one issued on or after the appointed day then, in determining under sub-paragraph (2) of that paragraph whether that policy would or would not (apart from that paragraph) be a qualifying policy there shall be left out of account so much of the first premium payable thereunder as is accounted for by the value of the old policy.

PART III — Relief under Section 19 or 20

6

• (1) In section 21—

• (a) subsection (2) shall be omitted ;

• (b) in subsection (3) for the words " those mentioned in subsection (2) above" there shall be substituted the words " capital sums on death ";

• (c) in subsection (4) for the words "subsections (2) and (3)" (in both places) there shall be substituted the words " subsection. (3) "; and

• (d) in subsection (5) the words "or of 7 per cent" shall be omitted.

• (2) This paragraph has effect for the year 1976-77 and subsequent years of assessment

7

• (1) Where a policy issued in the course of an industrial assurance business, as defined in section 1(2) of the Industrial Assurance Act 1923 or of the Industrial Assurance Act (Northern Ireland) 1924, is not a qualifying policy by virtue of paragraph 1 or 2 of Schedule 1 but is a policy with respect to which the conditions in paragraphs (b) and (c) of sub-paragraph (1) of paragraph 4 of Schedule 1 are satisfied, it shall be a qualifying policy whether or not the conditions of paragraphs (a) and (d)(iii) of that sub-paragraph are satisfied with respect to it; but where they are not satisfied relief under section 19 in respect of premiums paid under the policy shall be given only on such amount (if any) as would have been the amount of the premiums had those conditions been satisfied.

• (2) This paragraph has effect in relation to any policy issued in respect of an insurance made after the appointed day.

PART IV — Charges in connection with Policies of Life Insurance, Contracts for Life Annuities and Capital Redemption Policies

8

This Part of this Schedule shall have effect in relation to any event happening in any year (as defined in paragraph 9(9) below) which falls wholly after the passing of this Act, but without prejudice to the operation in relation to earlier events of paragraphs 10(1), 12(2), 16 and 17 below.

9

• (1) In section 394(1)(a)—

• (a) in sub-paragraph (iii) the words " or in part" and in sub-paragraph (iv) the words " or of any share therein " shall be omitted ; and

• (b) after sub-paragraph (iv) there shall be added—

(v) an excess of the reckonable aggregate value mentioned in sub-paragraph (6) of paragraph 9 of Schedule 2 to the Finance Act 1975 over the allowable aggregate amount mentioned in sub-paragraph (7) of that paragraph, being an excess occurring at the end of any year (as defined in sub-paragraph (9) of that paragraph), except, if it ends with another chargeable event, the final year; and

• (2) In section 394(1)(b)(ii) after the word " assignment " there shall be added the words " or such an excess as is mentioned in paragraph (a)(v) above " and after the word " effected " there shall be inserted the words " or occurs ".

• (3) In section 396(1) the words " or in part", where they first occur, and the words " or of any share therein " shall be omitted and after the words " of those rights " there shall be inserted the words " or an excess of the reckonable aggregate value mentioned in sub-paragraph (6) of paragraph 9 of Schedule 2 to the Finance Act 1975 over the allowable aggregate amount mentioned in sub-paragraph (7) of that paragraph, being an excess occurring at the end of any year (as defined in sub-paragraph (9) of that paragraph), except, if it ends with another chargeable event, the final year ".

• (4) In section 398(1)—

• (a) the words "or in part" and the words "or of any share therein " shall be omitted ; and

• (b) at the end of paragraph (iii) there shall be inserted

and (iv) an excess of the reckonable aggregate value mentioned in sub-paragraph (6) of paragraph 9 of Schedule 2 to the Finance Act 1975 over the allowable aggregate amount mentioned in sub-paragraph (7) of that paragraph, being an excess occurring at the end of any year (as defined in sub-paragraph (9) of that paragraph), except, if it ends with another chargeable event, the final year

,

• (5) For the purposes of sections 394, 396 and 398 as amended by the preceding sub-paragraphs there shall be calculated as at the end of each year, but subject to sub-paragraph (8) below.—

• (a) the value, as at the time of surrender or assignment, of any part of or share in the rights conferred by the policy or contract which has been assigned or surrendered up to the end of the year ; and

• (b) the appropriate portion of any payment made up to the end of the year by way of premium or as a lump sum consideration;

and the appropriate portion of any payment shall be one-twentieth for the year in which it is made, increased by a further one-twentieth for each of the subsequent nineteen years, but subject to sub-paragraph (8) below.

• (6) The reckonable aggregate value referred to in those sections shall be—

• (a) the sum of the values calculated under sub-paragraph (5) above; less

• (b) the sum of the values so calculated for a previous year and brought into account on the previous happening of a chargeable event.

• (7) The allowable aggregate amount referred to in those sections shall be—

• (a) the aggregate of the appropriate portions calculated under sub-paragraph (5) above ; less

• (b) the aggregate of the appropriate portions so calculated for a previous year and brought into account on the previous happening of a chargeable event.

• (8) In making the calculations required by sub-paragraph (5) above there shall be excluded—

• (a) from the value mentioned in paragraph (a) thereof, the value of any part of or share in the rights conferred by the policy or contract which has been assigned or surrendered before the commencement of the first year which falls wholly after the passing of this Act; and

• (b) from the appropriate portion mentioned in paragraph (b) thereof, the one-twentieth mentioned therein for any year before that first year.

• (9) In this paragraph "year" means the twelve months beginning with the making of the insurance or contract and any subsequent period of twelve months ; except that—

• (a) death, the maturity of the policy or the surrender of the whole of the rights conferred by the policy or contract shall be treated as ending the final year; and

• (b) if the final year would by virtue of paragraph (a) above begin and end in the same year of assessment, the final year and the year preceding it shall together be one year.

10

• (1) At the end of section 394(4) there shall be added the words " and are not at the time of the event held by the original beneficial owner. "

• (2) In section 394(5) the words from " and references " to the end and, in section 395(4), the words from "and any sum paid" to " under the policy " shall be omitted.

• (3) Sub-paragraph (1) above applies in relation to any event happening on or after 10th December 1974.

11

• (1) In section 395(1)—

• (a) in paragraph (a) for the words from " over" to the end there shall be substituted the words " over the sum of the following—

• (i) the total amount previously paid under the policy by way of premiums ; and

• (ii) the total amount treated as a gain by virtue of paragraph (d) below on the previous happening of chargeable events ".

• (b) in paragraph (b) the words "or in part" shall be omitted and for the words from the first " over " to the end there shall be substituted the words " over the sum of the following—

• (i) the total amount previously paid under the policy by way of premiums ; and

• (ii) the total amount treated as a gain by virtue of paragraph (d) below on the previous happening of chargeable events ";

• (c) for paragraph (c) there shall be substituted the following—

(c) if the event is an assignment, the excess (if any) of the amount or value of the consideration, plus the amount or value of any relevant capital payments or of any previously assigned share in the rights conferred by the policy, over the sum of the following— (i) the total amount previously paid under the policy by way of premiums ; and (ii) the total amount treated as a gain by virtue of paragraph (d) below on the previous happening of chargeable events

;

• (d) after paragraph (c) there shall be added the following paragraph—

(d) if the event is the occurrence of such an excess as is mentioned in section 394(l)(v) above, the amount of the excess.

• (2) After section 395(3) there shall be inserted the following subsection—

(3A) Where there is an assignment, otherwise than for money or money's worth, of all the rights conferred by the policy the calculations required to be made by paragraph 9 of Schedule 2 to the Finance Act 1975 shall be made, in the first instance, without regard to any surrender or assignment of part of or a share in those rights which takes place after the assignment, and any gain treated as arising under subsection (1)(d) above on the calculation so made shall be treated as arising to the assignor.

12

• (1) At the end of section 396(1) there shall be added the words " and where the terms of the contract provide for the payment of a capital sum on death and the contract was made on or after 10th December 1974, the death shall be treated for the purposes of this section and section 397 below as a surrender in whole of the rights conferred by the contract. "

• (2) At the end of section 396(2) there shall be added the words " and are not at the time of the event held by the original beneficial owner ".

• (3) Sub-paragraph (2) above applies in relation to any event happening on or after 10th December 1974.

13

• (1) In section 397(1)—

• (a) in paragraph (a) the words " or in part" shall be omitted, after the words " payable by reason of the event " there shall be inserted the words " plus the amount or value of any relevant capital payments ", and after the word " over " there shall be inserted the words " the sum of the following " and for sub-paragraph (ii) and the word " or " preceding it there shall be substituted

and (ii) the total amount treated as a gain by virtue of paragraph (c) below on the previous happening of chargeable events

;

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

(b) if the event is an assignment, the excess (if any) of the amount or value of the consideration, plus the amount or value of any relevant capital payments or of any previously assigned share in the rights conferred by the contract, over the sum of the following— (i) the amount specified in subsection (l)(a)(i) above ; and (ii) any amount treated as a gain by virtue of paragraph (c) below on the previous happenings of chargeable events

;

• (c) after paragraph (b) there shall be added the following paragraph—

(c) if the event is the occurrence of such an excess as is mentioned in section 396(1) above, the amount of the excess.

• (2) At the end of section 397(2) there shall be added the words 'and subsection (3A) of that section shall apply for the purposes of this section with the substitution of references to the contract for references to the policy'.

• (3) At the end of section 397 there shall be added the following subsection—

(3) In this section "relevant capital payments" means, in relation to any contract, any sum or other benefit of a capital nature paid or conferred under the contract before the happening of the chargeable event.

14

In section 398(1) at the end of sub-paragraph (i), there shall be added the words " except where the sums payable on maturity are annual payments chargeable to tax under Schedule D ".

15

For the purposes of sections 394 to 402 and of this Schedule the falling due of a sum payable in pursuance of a right conferred by a policy or contract to participate in profits shall be treated as the surrender of rights conferred by the policy or contract

16

• (1) Where—

• (a) under section 399, a gain arising in connection with a policy or contract would be treated as forming part of an individual's total income ; and

• (b) the policy was issued in respect of an insurance made after 26th March 1974 or the contract was made after that date and;

• (c) any sum is at any time after the making of the insurance or contract lent to or at the direction of that individual by or by arrangement with the body issuing the policy or, as the case may be, the body with which the contract was made;

then, subject to sub-paragraph (3) below, the same results shall follow under sections 7 to 9 of this Act, this Schedule and sections 394 to 402, as if at the time the sum was lent there had been a surrender of part of the rights conferred by the policy or contract and the sum had been paid as consideration for the surrender (and if the policy is one falling within subsection (2) of section 394, those results shall follow under section 8 of this Act, whether or not a gain would be treated as arising on the surrender).

• (2) If the whole or any part of the sum is repaid the repayment shall be treated, for the purpose of computing any gain arising on the happening, at the end of the final year, of a chargeable event, as a payment of a premium or lump sum consideration.

• (3) The preceding provisions of this paragraph do not apply in relation to a policy if—

• (a) it is a qualifying policy within the meaning of Schedule 1 ; and

• (b) either interest at a commercial rate is payable on the sum lent or the sum is lent to a full-time employee of the body issuing the policy for the purpose of assisting him in the purchase or improvement of a dwelling used or to be used as his only or main residence.

• (4) In this paragraph "final year" has the same meaning as in paragraph 9 above.

17

Where, under section 397, a gain is to be treated as arising in connection with a contract for a life annuity made after 26th March 1974—

• (a) section 399 shall have effect, in relation to the gain, as if subsection (4) were omitted ; and

• (b) the gain shall be chargeable to tax under Case VI of Schedule D; but

• (c) any relief under section 400 shall be computed as if this paragraph had not been enacted.

18

Where a chargeable event on the happening of which an amount is included in an individual's total income by virtue of Section 399(1)(a) follows the happening of another chargeable event in relation to the same policy or contract, and each of the events is such an excess as is mentioned in section 394(1)(a)(v), 396(1) or 398(1)(iv), subsection (3) of section 400 (top slicing relief) shall have effect in relation to that amount as if the number of complete years referred to in it were the number of complete years elapsing between that other event (or, if more than one, the last of diem) and the first-mentioned event.

19

• (1) Where such an excess as is mentioned in paragraph (a) or (b) of section 395(1) or paragraph (a) of section 397(1) would be treated as a gain arising in connection with a policy or contract and would form part of an individual's total income for the year of assessment in which the final year ends, a corresponding deficiency occurring at the end of the final year shall be allowable as a deduction from his total income for that year of assessment, so far as it does not exceed the total amount treated as a gain by virtue of section 395(1)(d) or 397(1)(c) on the previous happenings of chargeable events.

• (2) In this paragraph " final year " has the same meaning as in paragraph 9 above.

20

• (1) Section 402 shall have effect subject to the following provisions of this paragraph.

• (2) Where the chargeable event is an assignment of all the rights conferred by the policy or contract the certificate shall also specify any such excess as is mentioned in section 394(1)(a)(v), 396(1) or 398(l)(iv) which has occurred since the relevant date, the date on which it occurred and the value of the part of or share in the rights which have been surrendered or assigned since the relevant date.

• (3) Where the chargeable event is the occurrence of such an excess as is mentioned in section 394(1)(a)(v), 396(1) or 398(1)(iv), section 402 shall apply with the omission of subsection (2)(b) and the certificate shall also specify the value of the part of or share in the rights surrendered or assigned in any year since the relevant date and the amounts paid by way of premiums in any year since the relevant date.

• (4) In this paragraph "year" has the meaning assigned to it by paragraph 9(9) above and " the relevant date ", in relation to any certificate, means the date of the chargeable event in respect of which the last certificate under section 402 was delivered or, if none was delivered, the commencement of the policy or contract.

SCHEDULE 3

1

• (1) In any case where a company's 1973 accounting period does not coincide with a period of account or with two or more consecutive periods of account, the company's 1973 increase in stock value shall be determined for the purposes of the principal section not in accordance with subsection (1) of that section but by reference to a period (in this Schedule referred to as "the 1973 reference period") determined in accordance with this paragraph.

• (2) In any case where the beginning of a company's 1973 accounting period does not coincide with the beginning of a period of account, the 1973 reference period shall begin at the beginning of the period of account Which is current at the beginning of the company's 1973 accounting period.

• (3) In any case where the end of a company's 1973 accounting period does not coincide with the end of a period of account, the 1973 reference period shall end at the end of the period of account which is current at the end of the company's 1973 accounting period.

• (4) In any case where sub-paragraph (2) above does not apply the 1973 reference period shall begin at the beginning of the company's 1973 accounting period and in any case where sub-paragraph (3) above does not apply the 1973 reference period Shall end at the end of the company's 1973 accounting period.

2

• (1) In any case where paragraph 1(1) applies, a company's 1973 increase in stock value shall be determined for the purposes of the principal section by the formula:—

$$A(C−O)N$ where— " A " is the number of months in the company's 1973 accounting period or 12, whichever is the less ; " C " is the value of the company's trading stock at the end of the 1973 reference period ; " O " is the value of the company's trading stock at the beginning of the 1973 reference period ; and " N " is the number of months in the 1973 reference period.$

• (2) In any case where a company's 1973 increase in stock value falls to be determined in accordance with sub-paragraph (1) above, any reference in subsections (3) to (5) of the principal section or in the following provisions of this Schedule—

• (a) to the company's closing stock value shall be construed as a reference to the value of the company's trading stock at the end of the 1973 reference period; and

• (b) to the company's trading income for its 1973 accounting period shall be construed as a reference to that fraction of its trading income for the 1973 reference period of which the numerator is A and the denominator is N, as defined in sub-paragraph (1) above.

• (3) For the purposes of sub-paragraph (2)(b) above, the company's trading income for the 1973 reference period shall be the aggregate of its trading income for each of the accounting periods comprised in the 1973 reference period.

3

In any case where a company's 1973 accounting period comprises more than 12 months and paragraph 1 above does not apply, then, for the purposes of the principal section.—

• (a) the company's 1973 increase in stock value, as determined in accordance with subsection (1) of that section, and

• (b) the company's trading income for its 1973 accounting period,

shall each be reduced by multiplying them by the fraction of which the numerator is 12 and the denominator is the number of months in the company's 1973 accounting period.

4

• (1) The provisions of this paragraph shall have effect for the purposes of the principal section and the preceding provisions of this Schedule in any case where—

• (a) one or more companies (in this paragraph referred to as " the transferee company or companies ") forming part of a group of companies acquires or acquire trading stock from one or more other companies (in this paragraph referred to as "the transferor company or companies") forming part of the same group ; and

• (b) the acquisition occurs during the 1973 accounting period of the transferee company or companies or, if paragraph 1(1) above applies in relation to that company or those companies, during the 1973 reference period; and

• (c) the acquisition referred to in paragraph (a) above takes place in consequence or as part of a reconstruction, reorganisation, change in trading arrangements or other scheme which is carried out by companies forming part of the group of companies concerned and which results in a reduction in the trading stock held by one or more of those companies and a corresponding increase in the trading stock held by the other or others.

• (2) If a claim for relief under the principal section is made by the transferee company or the transferor company or, as the case may be, by any of the transferee companies or transferor companies, then the company claiming relief and all other companies which—

• (a) are either transferee companies or transferor companies, and

• (b) have the same 1973 accounting period as the company claiming relief,

shall be treated as one company for the purpose of determining the aggregate of the relief to which they are entitled under the principal section:

Provided that if paragraph 1(1) above applies in relation to the company claiming relief, another company shall not be treated as falling within paragraph (b) above unless paragraph 1(1) above also applies in relation to that other company and both that company and the company claiming relief have the same 1973 reference period.

• (3) For the purpose specified in sub-paragraph (2) above, any reference in the principal section or in the preceding provisions of this Schedule to the value of a company's stock at any time or to its trading income for any period shall be construed as a reference to the aggregate of the values of stocks at that time or, as the case may be, the aggregate of the trading incomes for that period, of all the companies which, for that purpose, are treated as one by virtue of that sub-paragraph.

• (4) Where the aggregate of the relief to which two or more companies are entitled under the principal section has been determined in accordance with sub-paragraphs (2) and (3) above, the relief shall be apportioned between them so that the relief to which any one of them is so entitled bears to the relief to which the other or others is or are so entitled the same proportion as the closing stock value of that one of them bears to the closing stock value or values of the other or others.

• (5) For the purposes of this paragraph, companies shall be treated as forming part of a group of companies if and only if they would be deemed to be members of the group for the purposes of section 258 of the Taxes Act (group relief).

5

• (1) A company shall not be entitled to relief under the principal section if its 1973 accounting period or, if that period consists of more than one accounting period, any of those accounting periods ends by virtue of the company—

• (a) ceasing to trade or to be, in respect of the trade concerned or of all the trades carried on by the company, within the charge to corporation tax ; or

• (b) ceasing to be resident in the United Kingdom ; or

• (c) ceasing to be within the charge to corporation tax.

• (2) In any case where a company's 1973 increase in stock value falls to be determined in accordance with paragraph 2(1) above, sub-paragraph (1) above shall have effect as if the reference therein to the company's 1973 accounting period or the accounting periods of which it consists were a reference to any of the accounting periods comprised in the company's 1973 reference period.

6

• (1) Subject to the following provisions of this paragraph, where a company claims relief under the principal section and, immediately before the beginning of its 1973 accounting period, the company was not carrying on the trade to which the claim relates then, unless—

• (a) the company acquired the initial trading stock of that trade on a sale or transfer from another person on that person's ceasing to carry on that trade, and

• (b) the stock so acquired is, or is included in, the company's trading stock as valued at the beginning of its 1973 accounting period,

the company shall be treated for the purposes of the principal section and the preceding provisions of this Schedule as having at the beginning of its 1973 accounting period trading stock of such value as appears to the inspector to be reasonable and just.

• (2) In determining, for the purposes specified in sub-paragraph (1) above, the value of trading stock to be attributed to a company at the beginning of its 1973 accounting period, the inspector shall have regard to all the relevant circumstances of the case and, in particular.—

• (a) to movements during the company's 1973 accounting period in the costs of items of a kind comprised in the company's trading stock during that period ; and

• (b) to changes during that period in the volume of the trade in question carried on by the company.

• (3) Any Commissioners dealing with an appeal from the decision of an inspector on a claim in a case where, in accordance with sub-paragraph (1) above, the inspector has attributed to a company at the beginning of its 1973 accounting period trading stock of a particular value shall, in hearing and determining the appeal, in so far as it relates to the value of the trading stock to be so attributed, determine such value as appears to them to be reasonable and just, having regard to those factors to which the inspector is required to have regard by virtue of sub-paragraph (2) above.

• (4) In any case where paragraph 1(1) above applies to a company's 1973 accounting period, for any reference in sub-paragraphs (1) to (3) above to that accounting period there shall be substituted a reference to the 1973 reference period.

7

• (1) In this Schedule " the principal section " means section 18 of this Act and " 1973 accounting period", " trading stock" and " trading income " have the same meaning as in the principal section.

• (2) In any case where a company's 1973 accounting period or the 1973 reference period consists of a number of complete months and a fraction of a month, any reference in the preceding provisions of this Schedule to the number of months in the period shall be construed as including that fraction of a month (and in any case where any such period is less than one month any such reference shall be construed as a reference to that fraction of a month of which the period consists).

• (3) Subsection (11) of the principal section shall apply for the purposes of this Schedule as it applies for the purposes of the principal section.

SCHEDULE 4

Management of tax

1

The tax shall be under the care and management of the Board.

Accounts by persons liable for tax

2

• (1) Subject to the following provisions of this paragraph, the personal representatives of a deceased person and every person who—

• (a) is liable as transferor for tax on the value transferred by a chargeable transfer, or would be so liable if tax were chargeable on that value, or

• (b) is liable as trustee of a settlement for tax on the value transferred by a transfer of value made after 26th March 1974, or would be so liable if tax were chargeable on that value;

shall deliver to the Board an account specifying to the best of his knowledge and belief all relevant property and the value of that property.

• (2) Where the account is to be delivered by personal representatives (but not where it is to be delivered by a person who is an executor of the deceased only in respect of settled land in England and Wales) the relevant property is all property which formed part of the deceased's estate immediately before his death; but—

• (a) if the personal representatives, after making the fullest enquiries that are reasonably practicable in the circumstances, are unable to ascertain the exact value of any particular property, their account shall in the first instance be sufficient as regards that property if it contains a statement to that effect, a provisional estimate of the value of the property and an undertaking to deliver a further account of it as soon as its value is ascertained ; and

• (b) the Board may from time to time give such general or special directions as they think fit for restricting the property to be specified in pursuance of this sub-paragraph by any class of personal representatives.

• (3) Where sub-paragraph (2) above does not apply the relevant property is any property to the value of which the tax is or would be attributable.

• (4) Except in the case of an account to be delivered by personal representatives, a person shall not be required to deliver an account under this paragraph with respect to any property if a full and proper account of that property, specifying its value, has already been delivered to the Board by some other person who is or would be liable for the tax attributable to the value of the property, unless that other person is or would be liable with him jointly as trustee.

• (5) An account under the preceding provisions of this paragraph shall be delivered—

• (a) in the case of an account to be delivered by personal representatives, before the expiration of the period of twelve months from the end of the month in which the death occurs, or, if it expires later, the period of three months beginning with the date on which the personal representatives first act as such ; and

• (b) in the case of an account to be delivered by any other person, before the expiration of the period of twelve months from the end of the month in which the transfer is made or, if it expires later, the period of three months beginning with the date on which he first becomes liable for tax.

• (6) In the case of a transfer of value made more than six months before the passing of this Act, sub-paragraph (5)(b) above shall have effect with the substitution of a reference to the period of six months from the passing of this Act for the reference to a period of twelve months.

• (7) A person liable for tax under section 32 or 34 of this Act or under paragraph 2 of Schedule 9 to this Act shall deliver an account under this paragraph before the expiration of the period of six months from the end of the month in which the event by reason of which the tax is chargeable occurs.

Corrective and supplementary accounts

3

If a person who has delivered an account under paragraph 2 above discovers at any time that the account is defective in a material respect by reason of anything contained in or omitted from it he shall, within six months of that time, deliver to the Board a further account containing such information as may be necessary to remedy the defect

Returns by certain persons acting for settlors

4

• (1) Subject to sub-paragraph (2) below, where any person, in the course of a trade or profession carried on by him, other than the profession of a barrister, has been concerned with the making, after 26th March 1974, of a settlement and knows or has reason to believe—

• (a) that the settlor was domiciled in the United Kingdom, and

• (b) that the trustees of the settlement are not or will not be resident in the United Kingdom ;

he shall, within three months of the making of the settlement or, if it was made before the passing of this Act, within three months of the passing of this Act, make a return to the Board stating the names and addresses of the settlor and of the trustees of the settlement.

• (2) A person shall not be required to make a return under this paragraph in relation to—

• (a) any settlement made by will, or

• (b) any other settlement, if such a return in relation to that settlement has already been made by another person or if an account has been delivered in relation to it under paragraph 2 above.

• (3) Paragraph 12(5) of Schedule 5 to this Act applies for the purposes of this paragraph.

Power to require information

5

• (1) The Board may by notice in writing require any person to furnish them within such time, not being less than thirty days, as may be specified in the notice with such information as the Board may require for the purposes of this Part of this Act.

• (2) A notice under this paragraph may be combined with one relating to income tax.

• (3) A barrister or solicitor shall not be obliged in pursuance of a notice under this paragraph to disclose, without his client's consent. any information with respect to which a claim to professional privilege could be maintained ; except that—

• (a) a solicitor may be so obliged to disclose the name and address of his client; and

• (b) if his client is resident outside the United Kingdom and carries on outside the United Kingdom a business which includes the provision for persons in the United Kingdom of services or facilities relating to the formation of companies outside the United Kingdom, the making of settlements outside the United Kingdom, or the securing of control over, or the management or administration of, such companies or settlements, a solicitor may also be so obliged to disclose the names and addresses of persons in the United Kingdom for whom such services or facilities have been provided in the course of that business.

Notice of determination of relevant matters

6

• (1) Where it appears to the Board that a transfer of value has been made or where a claim under this Part of this Act is made to the Board in connection with a transfer of value, the Board may give notice in writing to any person who appears to the Board to be the transferor or the claimant or to be liable for any of the tax chargeable on the value transferred, stating that they have determined the matters specified in the notice.

• (2) The matters that may be specified in a notice under this paragraph in relation to any transfer of value are all or any of the following:—

• (a) the date of the transfer ;

• (b) the value transferred and the value of any property to which the value transferred is wholly or partly attributable ;

• (c) the transferor;

• (d) the tax chargeable (if any) and the persons who are liable for the whole or part of it;

• (e) the amount of any payment made in excess of the tax for which a person is liable and the date from which and the rate at which tax or any repayment of tax overpaid carries interest; and

• (f) any other matter that appears to the Board to be relevant for the purposes of this Part of this Act.

• (3) A determination for the purposes of a notice under this paragraph of any fact relating to a transfer of value—

• (a) shall, if that fact has been stated in an account or return under this Schedule and the Board are satisfied that the account or return is correct, be made by the Board in accordance with that account or return; but

• (b) may, in any other case, be made by the Board to the best of their judgment.

• (4) A notice under this paragraph shall state the time within which and the manner in which an appeal against any determination in it may be made.

• (5) Subject to any variation by agreement in writing or on appeal, a determination in a notice under this paragraph shall be conclusive for the purposes of this Part of this Act against the person on whom the notice is served ; and if the notice is served on the transferor and specifies a determination of the value transferred by the transfer of value or previous transfers of value, the determination, so far as relevant to the tax chargeable in respect of later transfers of value (whether or not made by the transferor) shall be conclusive also against any other person, subject however to any adjustment under paragraph 23 or 24 below.

Appeals

7

• (1) A person on whom a notice under paragraph 6 above has been served may, within thirty days of the service, appeal against any determination specified in it by notice in writing given to the Board and specifying the grounds of appeal.

• (2) Subject to the following provisions of this paragraph the appeal shall be to the Special Commissioners.

• (3) Where it is so agreed between the appellant and the Board, or the High Court, on an application made by the appellant, is satisfied that the matters to be decided on the appeal are likely to be substantially confined to questions of law and gives leave for that purpose, the appeal may be to the High Court.

• (4) Neither the Special Commissioners nor the High Court shall determine any question as to the value of land in the United Kingdom on any appeal under this paragraph, but on any such question the appeal shall be to the Lands Tribunal or, as the case may be, the Lands Tribunal for Scotland or for Northern Ireland.

• (5) In the application of this paragraph to Scotland, for references to the High Court there shall be substituted references to the Court of Session.

Appeals out of time

8

An appeal under paragraph 7 above may be brought out of time with the consent of the Board or the Special Commissioners; and the Board—

• (a) shall give that consent if satisfied, on an application for the purpose, that there was a reasonable excuse for not bringing the appeal within the time limited and that the application was made thereafter without unreasonable delay; and

• (b) shall, if not so satisfied, refer the application for determination by the Special Commissioners.

Procedure before Special Commissioners

9

• (1) On an appeal before the Special Commissioners—

• (a) the Board may be represented by any of its officers; and

• (b) any party to the appeal may be represented by a barrister, solicitor or any accountant who has been admitted a member of an incorporated society of accountants or, with the leave of the Special Commissioners, by any other person.

• (2) The Special Commissioners may at any time before the determination of an appeal give notice to any party to the proceedings other than the Board requiring him within the time specified in the notice—

• (a) to deliver to them such particulars as they may require for the purpose of determining the appeal; and

• (b) to make available for inspection by them, or by an officer of the Board, all such books, accounts or other documents in his possession or power as may be specified or described in the notice, being books, accounts or other documents which, in the opinion of the Special Commissioners, contain or may contain information relating to the subject matter of the proceedings;

and any officer of the Board may, at all reasonable times, inspect and take copies of, or extracts from, any particulars delivered under paragraph (a) above and the Commissioners or any officer of the Board may take copies of, or extracts from, any books, accounts or other documents made available for inspection under paragraph (b) above.

• (3) The Special Commissioners may summon any person to appear before them and give evidence, and a witness before the Special Commissioners may be examined on oath.