LegalizeReform history
Finance Act 1977
4 versions
· 1977-07-29
2011-04-22
Finance Act 1977
2004-07-22
Finance Act 1977
2002-07-24
Finance Act 1977
Changes on 2002-07-24
@@ -1,194 +1,82 @@
# Finance Act 1977
## PART I — Customs and Excise
## Part I — Customs and excise
#### Spirits, beer, wine, made-wine, cider and tobacco
##### 1
- (1) In the Table in section 9 of the Finance (No. 2) Act 1975 (excise duty on spirits) for " 24.6300 " and " 24.7050 " there shall be substituted " 27.0900 " and "27.1650" respectively.
- (2) In section 10(1) of that Act (excise duty on beer) for "£15.8400" and "£0.5280" there shall be substituted " £17.4240 " and " £0.5808 " respectively.
- (3) For the provisions of Schedule 4 to that Act (rates of excise duty on wine) there shall be substituted the provisions of Schedule 1 to this Act.
- (4) For the provisions of Schedule 5 to that Act (rates of excise duty on made-wine) there shall be substituted the provisions of Schedule 2 to this Act.
- (5) In section 2(1) of the Finance Act 1976 (excise duty on cider) for " £0.22 " there shall be substituted " £0.242 ".
- (6) The rates of the duties of customs and excise chargeable under the provisions of subsection (1) of section 8 of the said Act of 1976 and the provisions mentioned in subsection (2) of that section (customs and excise duties on tobacco) shall each be increased by £0.585 per pound; and as respects tobacco on which there have been paid duties of customs and excise at the said increased rates, the rates of drawback allowable under those provisions shall each be increased by the like amount per pound.
- (7) In section 1(4) of the Finance Act 1973 (power to make orders before 1st July 1977 for giving effect to Community obligations in respect of tobacco duties) for the words " 1st July 1977 " there shall be substituted the words " 1st January 1978 " ; and subsection (6) above is without prejudice to the powers conferred by the said section 1(4).
- (8) The Surcharge on Revenue Duties Order 1976 (the effect of which is substantially reproduced by subsections (1) to (6) above) shall cease to have effect.
- (9) This section shall be deemed to have come into force on 30th March 1977.
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Tobacco products
##### 2
- (1) For the Table in section 4(1) of the Finance Act 1976 there shall be substituted—
| 1. Cigarettes. | An amount equal to 22 per cent. of the retail price plus £1.4100 per thousand cigarettes. |
| --- | --- |
| 2. Cigars | £3.0415 per pound. |
| 3. Hand-rolling tobacco | £3.8250 per pound. |
| 4. Other smoking tobacco and chewing tobacco | £1.7050 per pound. |
- (2) For the purposes of paragraph 1 in the Table in the said section 4(1) any cigarette more than 9cm. long (excluding any filter or mouthpiece) shall be treated as if each 9cm. or part thereof were a separate cigarette ; and for the purposes of section 6 of the said Act of 1976 (power to alter rates of duty) the percentage and the amount per thousand cigarettes in that paragraph shall be treated as separate rates of duty.
- (3) The Tobacco Products Duty (Increase) Order 1976 shall cease to have effect,
- (4) The Treasury may by order provide that in the enactments relating to the duty charged by section 4 of the said Act of 1976 references to cigarettes, cigars, hand-rolling tobacco, other smoking tobacco and chewing tobacco shall or shall not include references to any product of a description specified in the order, being a product manufactured wholly or partly from tobacco or any substance used as a substitute for tobacco but not including products commonly known as herbal cigarettes or herbal smoking mixtures; and any such order may amend or repeal subsection (5) of that section.
- (5) The power to make orders under subsection (4) above includes power to vary or revoke a previous order and shall be exercisable by statutory instrument.
- (6) Subject to subsection (7) below, any order under subsection (4) above shall be laid before the House of Commons after being made; and unless it is approved by that House before the expiration of twenty-eight days beginning with the date on which it was made, it shall cease to have effect on the expiration of that period, but without prejudice to anything previously done thereunder or to the making of a new order.
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Replacement by tobacco products duty of other tobacco duties
##### 3
#### Hydrocarbon oil etc.
##### 4
#### Vehicles excise duty: Great Britain
##### 5
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Vehicles excise duty: Northern Ireland
##### 6
#### Units and methods of measurement in customs and excise Acts
##### 7
- (1) The Treasury may by order amend the customs and excise Acts for the purpose of—
- (a) replacing any unit of measurement by a metric unit;
- (b) replacing the proof system of ascertaining the alcoholic strength of spirits and other liquids by a system of measurement by reference to percentages of alcohol by volume;
- (c) replacing any temperature expressed in degrees Fahrenheit by a temperature expressed in degrees Celsius;
- (d) replacing any pressure expressed in atmospheres by a pressure expressed in millibars.
- (2) Any amendment of an enactment under this section shall be such as to preserve the effect of the enactment except to such extent as the Treasury consider necessary to enable a substituted unit or method of measurement to be applied in a convenient and suitable manner.
- (3) An order under this section may contain such transitional and other supplementary provisions as the Treasury think necessary.
- (4) The power to make orders under this section includes power to vary or revoke a previous order and shall be exercisable by statutory instrument.
- (5) Subject to subsection (6) below, any order under this section shall be laid before the House of Commons after being made; and unless it is approved by that House before the expiration of twenty-eight days beginning with the date on which it was made, it shall cease to have effect on the expiration of that period, but without prejudice to anything previously done thereunder or to the making of a new order.
In reckoning any such period no account shall be taken of any time during which Parliament is dissolved or prorogued or during which the House of Commons is adjourned for more than four days.
- (7) Subsection (6) above shall not apply to any order containing a statement by the Treasury that the order does not extend the incidence of the duty or involve a greater charge to duty or a reduction of any relief; and any such order shall be subject to annulment in pursuance of a resolution of the House of Commons.
- (8) Subsections (1) to (3) above shall be deemed to have come into force on 4th April 1977.
#### Replacement by tobacco products duty of other tobacco duties
##### 3
- (1) As from 1st January 1978 no duties of customs or excise shall be charged under section 4 of the Finance Act 1964 and for the Table in section 4(1) of the Finance Act 1976 there shall be substituted—
| 1. Cigarettes | An amount equal to 30 per cent. of the retail price plus £9.00 per thousand cigarrettes. |
| --- | --- |
| 2. Cigars | £9.50 per pound. |
| 3. Hand-rolling tobacco | £9.20 per pound. |
| 4. Other smoking tobacco and chewing tobacco | £7.30 per pound. |
- (2) If it is shown to the satisfaction of the Commissioners that any tobacco which has borne duty under section 4 of the said Act of 1964 on or after 10th May 1976 has been or will be used in the manufacture of tobacco products chargeable with duty under section 4 of the said Act of 1976 on or after the said 1st January, they shall make a repayment at the appropriate rate specified in Schedule 3 to this Act in respect of the duty borne by that tobacco as aforesaid; and the rate per pound at which drawback is allowable on tobacco in respect of which a repayment has been made under this subsection shall be reduced by an amount equal to the rate per pound at which the repayment was made.
- (3) Drawback in respect of any duty charged under section 4 of the said Act of 1964 shall not be allowed by virtue of any event occurring after 30th June 1978; but if it is shown to the satisfaction of the Commissioners after that date—
- (a) that any tobacco which has borne duty under that section has been used in the manufacture of products which have become unmerchantable through natural causes; and
- (b) that no drawback or repayment in respect of the duty has been allowed or made under any other provision,
the Commissioners shall repay the duty to the manufacturer, but any such repayment shall be conditional on the products being disposed of in such manner as the Commissioners may require.
- (4) Part V of the Customs and Excise Act 1952 (which contains provisions for the collection and management of the duties charged by section 4 of the said Act of 1964 and for the protection of the revenue arising from them) shall cease to have effect on 1st January 1978 except as respects drawback by virtue of events occurring on or before the date mentioned in subsection (3) above.
- (5) In section 4(3) of the said Act of 1976 (regulations for the purposes of tobacco products duty) after paragraph (b) there shall be inserted—
> (bb) for the registration of premises where—
> (i) tobacco products are manufactured ;
> (ii) materials for the manufacture of such products are grown, produced, stored or treated ; or
> (iii) refuse from the manufacture of such products is stored or treated,
> and for regulating the storage and treatment in, and removal from, premises so registered of such materials and refuse;
.
#### Hydrocarbon oil etc.
##### 4
- (1) The rate of the duty of excise charged by section 11 of the Finance (No. 2) Act 1975 (hydrocarbon oil etc.) shall differ according to whether the oil is light oil or heavy oil; and accordingly—
- (a) in that section after the words " £0.3000 a gallon " there shall be inserted the words " in the case of light oil and £0.3500 a gallon in the case of heavy oil ";
- (b) in the following provisions (under which duty is charged by reference to the duty on hydrocarbon oil), that is to say—
- (i) section 6 of the Hydrocarbon Oil (Customs & Excise) Act 1971 (petrol substitutes and power methylated spirits);
- (ii) section 3(3) and (4)(c) of the Finance Act 1971 and Article 3 of the Excise Duties (Gas as Road Fuel) Order 1972,
for the words " hydrocarbon oil" there shall be substituted the words " light oil "; and
- (c) in section 92(2) of the Finance Act 1965 and section 14(2) of the Finance Act (Northern Ireland) 1966 (grants towards duty on bus fuel) for the words " hydrocarbon oil " there shall be substituted the words " heavy oil ".
- (2) In section 9 of the Hydrocarbon Oil (Customs & Excise) Act 1971 (rebate on heavy oil) for the words " at a rate of 1p a gallon less than the rate at which the duty is for the time being chargeable " there shall be substituted the words " at a rate—
- (a) in the case of kerosene other than aviation turbine fuel, of 1p a gallon less than the rate at which the duty is for the time being chargeable ;
- (b) in the case of aviation turbine fuel and heavy oil other than kerosene, of 2½ p a gallon less than the rate at which the duty is for the time being chargeable."
- (3) The provisions of the said section 9 as amended by subsection (2) above shall become subsection (1) of that section and after those provisions there shall be added—
> (2) In this section—
> - " aviation turbine fuel " means kerosene which is intended to be used as fuel for aircraft engines and is allowed to be delivered for that purpose without being marked in accordance with the regulations made for the purposes of this section;
> - " kerosene " means heavy oil of which more than 50 per cent. by volume distils at a temperature not exceeding 240°C.
- (4) In section 12(1) of the said Act of 1971 (rebate on light oil for use as furnace fuel at a rate of 1p a gallon less than the rate at which the duty is charged) for " 1p " there shall be substituted " 2 ½ p ".
- (5) This section shall be deemed to have come into force at 6 o'clock in the evening of 29th March 1977 ; but as respects the period beginning at that time and ending at 6 o'clock in the evening of 8th August 1977 the rate of the duty of excise charged by section 11 of the said Act of 1975 shall, notwithstanding subsection (1) above, be £0.3500 a gallon in the case of light oil as well as heavy oil and the provisions mentioned in paragraph (b) of that subsection shall have effect accordingly.
- (6) The Commissioners may make repayments of duty at the rate of 5p a gallon under arrangements made by them for avoiding dislocation in the supply of petrol to retailers and distributors at the end of the period mentioned in subsection (5) above.
#### Vehicles excise duty: Great Britain
##### 5
- (1) The Vehicles (Excise) Act 1971 shall be amended as follows.
- (2) For the provisions of Part II of Schedules 1 to 5 (annual rates of duty) there shall be substituted the provisions set out in Schedule 4 to this Act.
- (3) In subsection (5) of section 16 (rates of duty for trade licences), including that subsection as set out in paragraph 12 of Part I of Schedule 7, for " £20 " and " £3.35 " there shall be substituted respectively " £25 " and " £5 ".
- (4) In section 2(1)(b) (four month licence for vehicles with annual rate exceeding £8) for " £8 " there shall be substituted " £18 ".
- (5) This section has effect in relation to licences taken out after 29th March 1977.
#### Vehicles excise duty: Northern Ireland
##### 6
- (1) The Vehicles (Excise) Act (Northern Ireland) 1972 shall be amended as follows.
- (2) For the provisions of Part II of Schedules 1 to 5 (annual rates of duty) there shall be substituted the provisions set out in Schedule 5 to this Act.
- (3) In subsection (6) of section 16 (rates of duty for trade licences), including that subsection as set out in paragraph 12 of Part I of Schedule 9, for " £20 " and " £3.35 " there shall be substituted respectively " £25 " and " £5 ".
- (4) In section 2(1)(b) (four month licence for vehicles with annual rate exceeding £8) for " £8 " there shall be substituted " £18 ".
- (5) This section has effect in relation to licences taken out after 29th March 1977.
#### Units and methods of measurement in customs and excise Acts
##### 7
- (1) The Treasury may by order amend the customs and excise Acts for the purpose of—
- (a) replacing any unit of measurement by a metric unit;
- (b) replacing the proof system of ascertaining the alcoholic strength of spirits and other liquids by a system of measurement by reference to percentages of alcohol by volume;
- (c) replacing any temperature expressed in degrees Fahrenheit by a temperature expressed in degrees Celsius;
- (d) replacing any pressure expressed in atmospheres by a pressure expressed in millibars.
- (2) Any amendment of an enactment under this section shall be such as to preserve the effect of the enactment except to such extent as the Treasury consider necessary to enable a substituted unit or method of measurement to be applied in a convenient and suitable manner.
- (3) An order under this section may contain such transitional and other supplementary provisions as the Treasury think necessary.
- (4) The power to make orders under this section includes power to vary or revoke a previous order and shall be exercisable by statutory instrument.
- (5) Subject to subsection (6) below, any order under this section shall be laid before the House of Commons after being made ; and unless it is approved by that House before the expiration of twenty-eight days beginning with the date on which it was made, it shall cease to have effect on the expiration of that period, but without prejudice to anything previously done thereunder or to the making of a new order.
In reckoning any such period no account shall be taken of any time during which Parliament is dissolved or prorogued or during which the House of Commons is adjourned for more than four days.
- (6) Subsection (5) above shall not apply to any order containing a statement by the Treasury that the order does not involve a greater charge to duty or a reduction of any relief, drawback, rebate or allowance; and any such order shall be subject to annulment in pursuance of a resolution of the House of Commons.
#### Regulations where duty depends on use
##### 8
- (1) The Commissioners may, in accordance with subsection (2) below, make regulations applying in cases where any question as to the duties of customs chargeable on any goods depends on the use to be made of them.
- (2) In cases in which a Community instrument makes provision for the purpose of securing that the relevant use is made of the goods, regulations under this section may make provision for any matter which under the instrument is required or authorised to be dealt with by the authorities of member States or which otherwise arises out of the instrument; and in other cases regulations under this section may make such provision for that purpose as appears to the Commissioners to be necessary or expedient.
- (3) Section 255A of the Customs and Excise Act 1952 (which makes provision for purposes including that mentioned in subsection (2) above) shall, with effect from such day as may be appointed by regulations under this section, be amended as follows—
- (a) for the words " on the use to be made of any goods or on any other matter " there shall be substituted the words " on any matter (other than the use to be made of the goods) ";
- (b) the words " for securing that the goods will be so used or otherwise " shall be omitted.
#### Forfeiture of goods relieved from duty
@@ -223,9 +111,9 @@
- (3) The amount of the duty of customs or levy which, in any particular prescribed circumstances, is charged on or in respect of any goods by virtue of this section shall be such as, in accordance with the Treaties, may either be prescribed or determined in a prescribed manner.
- (4) Duties of customs charged by virtue of this section shall be treated as Community customs duties charged under subsection (1) of section 5 of the European Communities Act 1972 and levies charged by virtue of this section shall be treated as agricultural levies, as denned in subsection (8) of section 6 of that Act; and the provisions of, and of the enactments referred to in, those sections shall apply accordingly.
- (5) In this section " prescribed " means prescribed by regulations made by the Commissioners.
- (4) Duties of customs charged by virtue of this section shall be treated as Community customs duties charged under subsection (1) of section 5 of the European Communities Act 1972 and levies charged by virtue of this section shall be treated as agricultural levies, as defined in subsection (8) of section 6 of that Act; and the provisions of, and of the enactments referred to in, the said section 6 shall apply accordingly.
- (5) In this section “*prescribed*” means prescribed by regulations made by statutory instrument by the Commissioners which shall be subject to annulment in pursuance of a resolution of either House of Parliament.
- (6) This section and, except in so far as any such regulations otherwise provide, any regulations made under it shall have effect in relation to goods imported into the United Kingdom on or after 1st July 1977.
@@ -233,130 +121,33 @@
##### 11
- (1) This section applies where, in accordance with the Directive of the Council of the European Communities dated 15th March 1976 No. [76/308/EEC](https://www.legislation.gov.uk/european/directive/1976/0308), an authority in a member State makes a request for the recovery in the United Kingdom of any sum claimed by that authority in that State.
- (2) Subject to the following provisions, where this section applies the Commissioners or the Intervention Board for Agricultural Produce may recover the sum specified in the request as if it were a debt due to the Crown.
- (3) Proceedings for the recovery of any sum under this section shall be stayed if the defendant satisfies the court that proceedings relevant to his liability on the claim in relation to which the request has been made are pending, or are about to be instituted, before a court, tribunal or other competent body in the member State in question; but any such stay may be removed if the proceedings in the member State are not prosecuted or instituted with reasonable expedition.
- (4) It shall be a defence to proceedings under this section for the defendant to show that a final decision on the claim has been given in his favour by a court, tribunal or other competent body in the member State in question; and if he shows that such a decision has been given in respect of part of the claim it shall be a defence to the proceedings in so far as they relate to that part.
- (5) For the purposes of subsection (3) above proceedings shall be regarded as pending so long as an appeal may be brought against any decision in the proceedings; and for the purposes of subsection (4) above a final decision is one against which no appeal lies or against which an appeal lies within a period which has expired without an appeal having been brought.
- (6) In proceedings under this section any averment in the pleadings that a request has been made as mentioned in subsection (1) above for the recovery of the sum which is the subject of the proceedings shall be conclusive evidence of that fact; and except as provided in subsection (4) above no question shall be raised in any such proceedings as to the defendant's liability on the claim in relation to which the request has been made.
- (7) In relation to proceedings under this section in Scotland—
- (a) the reference in subsection (3) above—
- (i) to proceedings being stayed shall be construed as a reference to their being sisted ;
- (ii) to a stay being removed shall be construed as a reference to a sist being recalled ; and
- (b) the references in subsections (3), (4) and (6) above to a defendant shall be construed as references to a defender.
- (8) This section shall not have effect in relation to a request for the recovery of any sum which became due before 15th March 1976.
#### Conditional reliefs from import duty
##### 12
- (1) The following provisions of the Import Duties Act 1958 shall cease to have effect, that is to say—
- (a) section 9 and Schedule 5 (drawback);
- (b) paragraphs 1, 2, 3, 6, 7, 9, 10 and 11 of Schedule 3 (goods eligible for conditional relief).
- (2) This section shall be deemed to have come into force on 1st July 1977.
#### Continuation of powers under Finance Act 1961 s. 9
##### 13
The period after which orders of the Treasury under section 9 of the Finance Act 1961 may not be made or continue in force (which, by section 16 of the Finance Act 1976, was extended until the end of August 1977) shall extend until the end of August 1978 or such later date as Parliament may hereafter determine.
## PART II — Value Added Tax
## Part II
#### Restatement of value added tax
##### 14
- (1) As from 1st January 1978, Part I of the Finance Act 1972 (which imposes the charge to value added tax) shall be amended as shown in Part I of Schedule 6 to this Act (these being amendments mainly to give effect to new Community provisions relating to the incidence and operation of the tax).
- (2) As from that date, in consequence of subsection (1), that Part of the 1972 Act, and the other enactments and subordinate legislation mentioned in Part II of that Schedule, shall have effect subject to the amendments there specified; and Part III of the Schedule shall have effect for transitional purposes.
#### Registration limits
##### 15
- (1) Paragraphs 1 and 2 of Schedule 1 to the Finance Act 1972 (liability to be registered) shall be amended as follows.
- (2) In paragraph 1, in the provisions before the Table, for " £5,000 " (in both places) there shall be substituted " £7,500 " and in the second column of the Table for " 1,750 ", " 3,000 ", "4,250" and "5,000" there shall be substituted respectively " 2,625 ", " 4,500 ", " 6,375 " and " 7,500 ".
- (3) In paragraph 2 for " £4,000 " (in both places) there shall be substituted " £6,000 ", and for "£1,250 " there shall be substituted " £1,875 ".
- (4) In section 20(1) of that Act (registration of local authorities) for "£5,000" (in both places) there shall be substituted " £7,500 ".
- (5) In Schedule 2 to that Act, at the end of paragraph 3 (deemed supply of business assets, where business proprietor de-registered, except in certain cases), there shall be added—
> or
> (c) the tax on the deemed supply would be not more than £50
.
- (6) Subsection (5) above shall not come into force until 5th August 1977, and subsections (1) to (4) not until 1st October 1977.
#### Goods imported for private purposes
##### 16
- (1) Where, on or after 1st August 1977, goods are imported by a taxable person and—
- (a) at the time of importation they belong wholly or partly to another person ; and
- (b) the purposes for which they are to be used include private purposes either of himself or of the other,
tax paid or payable by the taxable person on the importation of the goods shall not be regarded as input tax to be deducted or credited under section 3 of the Finance Act 1972 ; but he may make a separate claim to the Commissioners for it to be repaid.
- (2) The Commissioners shall allow the claim if they are satisfied that to disallow it would result, in effect, in a double charge to tax; and where they allow it they shall do so only to the extent necessary to avoid the double charge.
- (3) In considering a claim under this section, the Commissioners shall have regard to the circumstances of the importation and, so far as appearing to them to be relevant, things done with, or occurring in relation to, the goods at any subsequent time.
- (4) Any amount allowed by the Commissioners on the claim shall be paid by them to the taxable person.
- (5) In section 40(1) of the Finance Act 1972 (appeal to VAT Tribunal) after paragraph (j) there shall be inserted—
> (k) a claim by a taxable person under section 16 of the Finance Act 1977
.
- (6) The reference above to a person's private purposes is to purposes which are not those of any business carried on by him.
## PART III — Income Tax, Corporation Tax and Capital Gains Tax
## PART III — INCOME TAX, CORPORATION TAX AND CAPITAL GAINS TAX
#### Charge of income tax for 1977-78
##### 17
Income tax for the year 1977-78 shall be charged at the basic rate of 34 per cent.; and—
- (a) in respect of so much of an individual's total income as exceeds £6,000 at such higher rates as are specified in the Table below ; and
- (b) in respect of so much of the investment income included in an individual's total income as exceeds £1,500 at the additional rates of 10 per cent. for the first £500 of the excess and 15 per cent. for the remainder;
except that, in the case of an individual who shows that, at any time within that year, his age or that of his wife living with him was sixty-five years or more, paragraph (b) above shall have effect with the substitution for the reference to £1,500 of a reference to £2,000.
| Part of excess over £6,000 | Higher rate |
| --- | --- |
| The first £1,000 | 40 per cent. |
| The next £1,000 | 45 per cent. |
| The next £1,000 | 50 per cent. |
| The next £1,000 | 55 per cent. |
| The next £2,000 | 60 per cent. |
| The next £2,000 | 65 per cent. |
| The next £2,000 | 70 per cent. |
| The next £5,000 | 75 per cent. |
| The remainder | 83 per cent. |
##### 17–39
#### Charge of corporation tax for financial year 1976
@@ -808,167 +599,25 @@
##### 40
- (1) In sub-paragraph (2) of paragraph 6 of Schedule 7 to the Finance Act 1965 (roll-over relief on exchange of shares) for the words " where the company issuing the shares or debentures has or in consequence of the exchange will have control of the other company " there shall be substituted the words " where the company issuing the shares or debentures holds or in consequence of the exchange will hold more than one quarter of the ordinary share capital of the other company " ; and after that sub-paragraph there shall be inserted—
> (3) In this paragraph ' ordinary share capital' has the meaning given in section 526(5) of the Income and Corporation Taxes Act 1970.
- (2) Subject to subsection (3) below, neither the said paragraph 6 nor paragraph 7 of the said Schedule 7 (reconstructions and amalgamations) shall apply to any issue by a company of shares in or debentures of that company in exchange for or in respect of shares in or debentures of another company unless the exchange, reconstruction or amalgamation in question is effected for bona fide commercial reasons and does not form part of a scheme or arrangements of which the main purpose, or one of the main purposes, is avoidance of liability to capital gains tax or corporation tax.
- (3) Subsection (2) above shall not affect the operation of paragraph 6 or 7—
- (a) in any case where the person to whom the shares or debentures are issued does not hold more than 5 per cent. of, or of any class of, the shares in or debentures of the second company mentioned in that subsection; or
- (b) in any case where, before the issue is made, the Board have, on the application of either company mentioned in that subsection, notified the company that the Board are satisfied that the exchange, reconstruction or amalgamation will be effected for bona fide commercial reasons and will not form part of any such scheme or arrangements as are there mentioned.
- (4) Any application under subsection (3)(b) above shall be in writing and shall contain particulars of the operations that are to be effected and the Board may, within thirty days of the receipt of the application or of any further particulars previously required under this subsection, by notice require the applicant to furnish further particulars for the purpose of enabling the Board to make their decision; and if any such notice is not complied with within thirty days or such longer period as the Board may allow, the Board need not proceed further on the application.
- (5) The Board shall notify their decision to the applicant within thirty days of receiving the application or, if they give a notice under subsection (4) above, within thirty days of the notice being complied with.
- (6) If the Board notify the applicant that they are not satisfied as mentioned in subsection (3)(b) above or do not notify their decision to the applicant within the time required by subsection (5) above, the applicant may within thirty days of the notification or of that time require the Board to transmit the application, together with any notice given and further particulars furnished under subsection (4) above, to the Special Commissioners ; and in that event any notification by the Special Commissioners shall have effect for the purposes of subsection (3)(b) above as if it were a notification by the Board.
- (7) If any particulars furnished under this section do not fully and accurately disclose all facts and considerations material for the decision of the Board or the Special Commissioners, any resulting notification that the Board or Commissioners are satisfied as mentioned in subsection (3)(b) above shall be void.
- (8) If any tax assessed on a person (the chargeable person) by virtue of subsection (2) above is not paid within six months from the date when it is payable, any other person who—
- (a) holds all or any part of the shares or debentures that were issued to the chargeable person; and
- (b) has acquired them without there having been, since their acquisition by the chargeable person, any disposal of them not falling within paragraph 20 of Schedule 7 to the Finance Act 1965 or section 273 of the Taxes Act (disposals between spouses or members of a group of companies),
may, at any time within two years from the time when the tax became payable, be assessed and charged (in the name of the chargeable person) to all or, as the case may be, a corresponding part of the unpaid tax ; and a person paying any amount of tax under this subsection shall be entitled to recover a sum of that amount from the chargeable person.
- (9) In this section references to shares or debentures include references to any interests or options to which the provisions mentioned in subsection (2) above apply by virtue of paragraph 15 of Schedule 12 to the Finance Act 1968 or section 58(4) of the Finance Act 1971; and for the purposes of subsection (3)(a) above shares or debentures held by persons connected with the person there mentioned shall be treated as held by him.
- (10) This section applies where the shares or debentures are issued after 19th April 1977 and section 279 of the Taxes Act shall apply only if the earlier occasion mentioned in that section fell on or before that date.
#### Capital gains: company reconstructions and amalgamations involving transfer of business assets
##### 41
- (1) In section 267 of the Taxes Act (relief where reconstruction or amalgamation involves transfer of business assets) after subsection (3) there shall be inserted—
> (3A) This section does not apply unless the reconstruction or amalgamation is effected for bona fide commercial reasons and does not form part of a scheme or arrangements of which the main purpose, or one of the main purposes, is avoidance of liability to corporation tax, capital gains tax or income tax; but the foregoing provisions of this subsection shall not affect the operation of this section in any case where, before the transfer, the Board have, on the application of the acquiring company, notified the company that the Board are satisfied that the reconstruction or amalgamation will be effected for bona fide commercial reasons and will not form part of any such scheme or arrangements as aforesaid.
> Subsections (4) to (7) of section 40 of the Finance Act 1977 shall have effect in relation to this subsection as they have effect in relation to subsection (3)(b) of that section.
> (3B) Where, if the company making the disposal had not been wound up, tax could have been assessed on it by virtue of subsection (3A) above, that tax may be assessed and charged (in the name of the company making the disposal) on the company to which the disposal is made.
> (3C) If any tax assessed on a company (the chargeable company) by virtue of subsection (3A) or (3B) above is not paid within six months from the date when it is payable, any other person who—
> (a) holds all or any part of the assets in respect of which the tax is charged; and
> (b) either is the company to which the disposal was made or has acquired the assets without there having been any subsequent disposal not falling within this section or section 273 below,
> may, within two years from the time when the tax became payable, be assessed and charged (in the name of the chargeable company) to all or, as the case may be, a corresponding part of the unpaid tax ; and a person paying any amount of tax under this section shall be entitled to recover a sum of that amount from the chargeable company.
.
- (2) This section applies where the transfer takes effect after 19th April 1977.
#### Capital gains: transfers of assets to non-resident companies
##### 42
- (1) For section 268 of the Taxes Act (postponement of charge on transfer of assets to non-resident company) there shall be substituted—
> (268A)
> (1) This section applies where a company resident in the United Kingdom carries on a trade outside the United Kingdom through a branch or agency and—
> (a) that trade, or part of it, together with the whole assets of the company used for the purposes of the trade or part (or together with the whole of those assets other than cash) is transferred to a company not resident in the United Kingdom;
> (b) the trade or part is so transferred wholly or partly in exchange for securities consisting of snares, or of shares and loan stock, issued by the transferee company to the transferor company;
> (c) the shares so issued, either alone or taken together with any other shares in the transferee company already held by the transferor company, amount in all to not less than one quarter of the ordinary share capital of the transferee company; and
> (d) either no allowable losses accrue to the transferor company on the transfer or the aggregate of the chargeable gains so accruing exceeds the aggregate of the allowable losses so accruing.
> (2) In any case to which this section applies the transferor company may claim that Part III of the Finance Act 1965 shall have effect in accordance with the following provisions.
> (3) Any allowable losses accruing to the transferor company on the transfer shall be set off against the chargeable gains so accruing and the transfer shall be treated as giving rise to a single chargeable gain equal to the aggregate of those gains after deducting the aggregate of those losses and—
> (a) if the securities are the whole consideration for the transfer, the whole of that gain shall be treated as not accruing to the transferor company on the transfer but an equivalent amount (" the deferred gain ") shall be brought into account in accordance with subsections (4) and (5) below ;
> (b) if the securities are not the whole of that consideration—
> (i) paragraph (a) above shall apply to the appropriate proportion of that gain; and
> (ii) the remainder shall be treated as accruing to the transferor company on the transfer.
> In paragraph (b)(i) above " the appropriate proportion " means the proportion that the market value of the securities at the time of the transfer bears to the market value of the whole of the consideration at that time.
> (4) If at any time after the transfer the transferor company disposes of the whole or part of the securities held by it immediately before that time, the consideration received by it on the disposal shall be treated as increased by the whole or the appropriate proportion of the deferred gain so far as not already taken into account under this subsection or subsection (5) below.
> In this subsection " the appropriate proportion " means the proportion that the market value of the part of the securities disposed of bears to the market value of the securities held immediately before the disposal.
> (5) If at any time within six years after the transfer the transferee company disposes of the whole or part of the relevant assets held by it immediately before that time there shall be deemed to accrue to the transferor company as a chargeable gain on that occasion the whole or the appropriate proportion of the deferred gain so far as not already taken into account under this subsection or subsection (4) above.
> In this subsection " relevant assets " means assets the chargeable gains on which were taken into account in arriving at the deferred gain and " the appropriate proportion " means the proportion which the chargeable gain so taken into account in respect of the part of the relevant assets disposed of bears to the aggregate of the chargeable gains so taken into account in respect of the relevant assets held immediately before the time of the disposal.
> (6) There shall be disregarded—
> (a) for the purposes of subsection (4) above any disposal to which section 273 of this Act applies; and
> (b) for the purposes of subsection (5) above any disposal to which that section would apply apart from section 272(1)(a) or (2) of this Act;
> and where a person acquires securities or an asset on a disposal disregarded for the purposes of subsection (4) or (5) above (and without there having been a previous disposal not so disregarded) a disposal of the securities or asset by that person shall be treated as a disposal by the transferor or, as the case may be, transferee company.
> (7) This section applies where the transfer mentioned in subsection (1)(a) above is on or after 29th March 1977.
> (8) If in the case of any such transfer as was mentioned in subsection (1) of section 268 of this Act there were on the said 29th March chargeable gains which by virtue of subsection (2) of that section were treated as not yet having accrued to the transferor company, subsections (4) and (5) above shall (without any claim in that behalf) apply to the aggregate of those gains as if references to the deferred gain were references to that aggregate and as if references to the transfer and the securities were references to the transfer and the shares, or shares and loan stock, mentioned in subsection (1) of that section.
- (2) This section shall be deemed to have come into force on 29th March 1977.
#### Capital gains: value-shifting
##### 43
- (1) This section has effect as respects the disposal of an asset if a scheme has been effected or arrangements have been made (whether before or after the disposal) whereby—
- (a) the value of the asset has been materially reduced ; and
- (b) a tax-free benefit has been or will be conferred—
- (i) on the person making the disposal or a person with whom he is connected; or
- (ii) subject to subsection (3) below, on any other person.
- (2) For the purposes of subsection (1)(b) above a benefit is conferred on a person if he becomes entitled to any money or money's worth or the value of any asset in which he has an interest is increased or he is wholly or partly relieved from any liability to which he is subject; and a benefit is tax-free unless it is required, on the occasion on which it is conferred on the person in question, to be brought into account in computing his income, profits or gains for the purposes of income tax, capital gains tax or corporation tax.
- (3) This section shall not apply by virtue of subsection (1)(b)(ii) above if it is shown that avoidance of tax was not the main purpose or one of the main purposes of the scheme or arrangements in question.
- (4) Where this section has effect in relation to any disposal, any allowable loss or chargeable gain accruing on the disposal shall be calculated as if the consideration for the disposal were increased by such amount as appears to the inspector, or on appeal the Commissioners concerned, to be just and reasonable having regard to the scheme or arrangements and the tax-free benefit in question.
- (5) Where—
- (a) by virtue of subsection (4) above the consideration for the disposal of an asset has been treated as increased ; and
- (b) the benefit taken into account under subsection (1)(b) above was an increase in the value of another asset,
any allowable loss or chargeable gain accruing on the first disposal of the other asset after the increase in its value shall be calculated as if the consideration for that disposal were reduced by such amount as appears to the inspector, or on appeal the Commissioners concerned, to be just and reasonable having regard to the scheme or arrangements in question and the increase made in relation to the disposal mentioned in paragraph (a) above.
- (6) References in this section to a disposal do not include references to any disposal falling within—
- (a) section 24(7) of the Finance Act 1965 (disposals by personal representatives to legatees); or
- (b) paragraph 20(1) of Schedule 7 to that Act (disposals between husband and wife); or
- (c) section 273(1) of the Taxes Act (disposals within a group of companies).
- (7) In relation to the disposal by a company of an asset consisting of shares in another company the reference in subsection (1)(a) above to a reduction in the value of the asset does not include a reference to any reduction attributable to—
- (a) the payment of a dividend by the second company at a time when it and the first company are members of the same group of companies within the meaning of section 272 of the Taxes Act; or
- (b) the disposal of any asset by the second company at such a time, being a disposal falling within section 273(1) of that Act.
- (8) In relation to a case in which the disposal of an asset precedes its acquisition the reference in subsection (1)(a) above to a reduction shall be read as including a reference to an increase.
- (9) This section applies where the disposal and reduction in value mentioned in subsection (1) above (or, in a case within subsection (8) above, the disposal and reduction or increase in value) are after 29th March 1977.
#### Capital gains: unit trusts etc.
##### 44
- (1) In relation to gains accruing on disposals after 5th April 1977 section 112 of the Finance Act 1972 (reduction of tax liability on certain disposals of shares in unit trusts, investment trusts and funds in court) shall have effect as if for the references in paragraphs (b) and (c) of subsection (3) to 17 ½ per cent. there were substituted references to 17 per cent.
- (2) Section 113 of that Act (reduced rate of capital gains tax for certain unit trusts and funds in court) shall have effect for the year 1977-78 and subsequent years of assessment as if the rate specified in it were 17 per cent. instead of 17 ½ per cent.
#### Insurance companies: overseas business
##### 45
- (1) Subsections (2) and (3) below apply where a company resident in the United Kingdom carries on insurance business outside the United Kingdom through a branch or agency and—
- (a) that business, or part of it, together with the whole assets of the company used for the purposes of that business or part (or together with the whole of those assets other than cash), is transferred to a company not resident in the United Kingdom ;
- (b) the business or part is so transferred wholly or partly in exchange for shares, or for shares and loan stock, issued by the transferee company to the transferor company; and
- (c) the shares so issued, either alone or taken together with any other shares in the transferee company already held by the transferor company, amount in all to not less than one quarter of the ordinary share capital of the transferee company.
- (2) In making any computation in accordance with the provisions of the Taxes Act applicable to Case I of Schedule D of the profits or losses of the transferor company for the accounting period in which the transfer occurs there shall be disregarded any profit or loss in respect of any asset transferred which, apart from this subsection, would fall to be taken into account in making that computation.
- (3) Where by virtue of subsection (2) above any profit or loss is disregarded in making any computation otherwise than for the purposes of section 305(2) of the Taxes Act (restriction on relief for expenses of management) the profit or loss shall be treated for the purposes of Part III of the Finance Act 1965 as a chargeable gain or allowable loss accruing to the transferor company on the transfer.
- (4) Where at any time a company resident in the United Kingdom—
- (a) which carries on insurance business wholly outside the United Kingdom; and
- (b) the whole or part of whose ordinary share capital is beneficially owned by one or more companies resident in the United Kingdom,
ceases to be resident in the United Kingdom, the profits or losses of the company in respect of that business for the accounting period ending at that time shall be computed for tax purposes without regard to the whole or, as the case may be, a corresponding part of any profit or loss in respect of any asset which, apart from this subsection, would fall to be calculated in accordance with section 137(1)(b) of the Taxes Act (valuation of trading stock on discontinuance of trade) and taken into account in making that computation.
- (5) Subsections (1) to (3) above apply where the transfer is on or after 29th March 1977 and subsection (4) above applies where the company ceases to be resident in the United Kingdom on or after that date.
##### 45–48
#### Conversion etc. of securities held as circulating capital
@@ -1038,84 +687,32 @@
- (5) Subsection (1) above does not apply to any payment made on or before 29th March 1977 but applies to a payment made after that date irrespective of when the liability to make it was incurred.
## PART IV — Capital Transfer Tax
## Part IV — CAPITAL TRANSFER TAX
#### Persons domiciled in Channel Islands or Isle of Man
##### 49
- (1) In section 45 of the Finance Act 1975 (which in subsection (1)(c) provides that certain persons domiciled in the Channel Islands or the Isle of Man are to be treated as domiciled in the United Kingdom) after subsection (2) there shall be inserted—
> (2A) Subsection (1)(c) above does not apply to—
> (a) a person with a domicile of origin in the Islands ; or
> (b) a person who, when he became domiciled in the Islands as there mentioned, was incapable of having an independent domicile.
.
- (2) Subject to the following provisions of this section, property situated outside the United Kingdom is excluded property for the purposes of Part III of the said Act of 1975 if—
- (a) the person beneficially entitled to it is domiciled in the United Kingdom by virtue only of subsection (1)(c) of the said section 45 ; and
- (b) it is shown that the property directly or indirectly represents—
- (i) emoluments resulting from the carrying on by him of an office or employment in the Islands at a time when (disregarding that section) he was domiciled there; or
- (ii) profits resulting from the carrying on of a business there at such a time either by him or by a company of which he then had control.
- (3) Paragraph (b)(i) of subsection (2) above does not apply to a person's emoluments from an office or employment in a business of the kind mentioned in subsection (4) below which is carried on by a person with whom he is connected; and paragraph (b)(ii) of subsection (2) above does not apply to profits from the carrying on of a business of the kind mentioned in subsection (4) below.
- (4) The business referred to above is any business which consists wholly or mainly of one or more of the following, that is to say—
- (a) dealing in securities, stocks or shares or in land or buildings situated outside the Islands ; or
- (b) making or holding investments, being, in the case of investments consisting of land or buildings, land or buildings situated outside the Islands.
- (5) Subsection (2) above does not apply in relation to settled property; but where at the time when a settlement was made the settlor was domiciled in the United Kingdom by virtue only of section 45(1)(c) of the said Act of 1975 any property comprised in the settlement is excluded property for the purposes of Part III of that Act if—
- (a) it is situated outside the United Kingdom ; and
- (b) it is, or directly or indirectly represents, property that was excluded property by virtue of that subsection at the time when it was settled.
- (6) In this section—
- " business " includes a business carried on in the exercise of a profession or vocation;
- " the Islands " means the Channel Islands and the Isle of Man; and paragraph 13(7) of Schedule 4 to the said Act of 1975 (control of company) applies for the purposes of subsection (2) above.
#### Interests in settled property
##### 50
- (1) After paragraph 11(10) of Schedule 5 to the Finance Act 1975 (under which an interest in possession acquired by a company is not treated as such an interest unless the company's business consists wholly or mainly in the acquisition of interests in settled property) there shall be inserted—
> (10A) Where the acquisition mentioned in paragraph (b) of sub-paragraph (10) above was before 14th March 1975—
> (a) the condition mentioned in paragraph (a) of that sub-paragraph shall be treated as satisfied if the business of the company was at the time of the acquisition such as is described in that paragraph ; and
> (b) that condition need not be satisfied if the company is authorised to carry on long term business under Part I of the Insurance Companies Act 1974 or Part II of the Insurance Companies (Northern Ireland) Order 1976.
.
- (2) This section shall be deemed to have come into force on 29th March 1977.
#### Trusts for persons in receipt of attendance allowance
##### 51
- (1) Paragraph 19 of Schedule 5 to the Finance Act 1975 (trusts for mentally disabled persons) shall be amended as follows.
- (2) In sub-paragraph (1) after the words " a mentally disabled person " there shall be inserted the words " or of a person in receipt of an attendance allowance ".
- (3) In sub-paragraphs (2)(a) and (3) for the words "the mentally disabled person " there shall be substituted the words " the person mentioned in sub-paragraph (1) above ".
- (4) In sub-paragraph (2)(b) after the words "for the benefit of the mentally disabled person" there shall be inserted the words " or, as the case may be, for the care or maintenance of the person in receipt of the attendance allowance ".
- (5) At the end of sub-paragraph (4) there shall be added the words " and ' attendance allowance ' means an allowance under section 35 of the Social Security Act 1975 or the Social Security (Northern Ireland) Act 1975 ".
- (2) In sub-paragraph (1) after the words “a mentally disabled person" there shall be inserted the words “ or of a person in receipt of an attendance allowance".
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) At the end of Sub-paragragh (4) there shall be added the words “and“ attendance allowance" means an allowance under section 35 of the Social Security Act 1975 or the Social Security (Northern Ireland) Act 1975"
#### Relief for woodlands
##### 52
Paragraph 5 of Schedule 9 to the Finance Act 1975 (relief for woodlands) shall have effect, and be deemed always to have had effect, with the omission of sub-paragraphs (1)(a) and (b) and sub-paragraph (2) (under which relief under that Schedule is conditional on the woodlands being managed in accordance with a plan approved by the Forestry Commissioners under a forestry dedication covenant or forestry dedication agreement or on equivalent conditions).
#### Disposals of conditionally exempt property
##### 53
@@ -1124,7 +721,7 @@
- (2) This section applies where the event by reason of which tax is chargeable under the provisions mentioned in subsection (1) above occurs after 19th April 1977.
## PART V — Miscellaneous and Supplementary
## PART V — MISCELLANEOUS AND SUPPLEMENTARY
#### Petroleum revenue tax
@@ -1132,40 +729,18 @@
- (1) After paragraph 6 of Schedule 3 to the Oil Taxation Act 1975 there shall be inserted—
> (6A) Where the whole or part of the share of a participator (" the transferor ") of oil won from an oil field became the share, or part of the share, of another participator (" the transferee ") in pursuance of an agreement between them under which the transferor undertook to remain responsible for carrying out the transferee's obligations in connection with the field so far as they relate to the transferred share or part, then, for the purposes of this Part of this Act—
> (6A) Where the whole or part of the share of a participator (“the transferor") of oil won from an oil field became the share, or part of the share, of another participator (“the transferee") in pursuance of an agreement between them under which the transferor undertook to remain responsible for carrying out the transferee’s obligations in connection with the field so far as they relate to the transferred share or part, then, for the purposes of this Part of this Act—
> (a) the shares of the transferor and the transferee of oil won from the field shall be taken to be the same as they would have been if the transfer had not occurred, and
> (b) any oil comprised in the transferred share or part and taken up by or on the authority of the transferee in pursuance of the agreement shall be regarded as being disposed of and delivered to him by the transferor at the time when it is taken up.
.
- (2) In the said paragraph 6, in sub-paragraph (1), for the words "another person (in this paragraph referred to as " the owner")" there shall be substituted the words " a person (in this paragraph referred to as " the owner ") who is not a participator and ".
- (2) In the said paragraph 6, in sub-paragraph (1), for the words “another person (in this paragraph referred to as “the owner")" there shall be substituted the words “a person (in this paragraph referred to as “the owner") who is not a participator and".
#### Development land tax
##### 55
Part III of Schedule 2 to the Development Land Tax Act 1976 (realised development value: provisions applicable to leases etc.) shall have effect, and be deemed always to have had effect, with the insertion, after paragraph 13, of the following paragraph:—
> (13A)
> (1) The provisions of this paragraph shall have effect where there is a part disposal consisting of the grant of a lease and the terms on which the lease is granted are such that—
> (a) the landlord enters into an obligation to bear the whole or part of the cost of certain works to be carried out after the date of the part disposal; and
> (b) the amount of the consideration for the lease is greater than it would have been if the landlord had not entered into that obligation.
> (2) For the purpose only of determining the amount of the expenditure on improvements or, as the case may be, on relevant improvements to be taken into account in determining the relevant base value of the interest disposed of on the part disposal referred to in sub-paragraph (1) above,—
> (a) the works referred to in paragraph (a) of that sub paragraph shall be deemed to have been carried out immediately before the disposal; and
> (b) in the carrying out of those works the landlord shall be deemed to have incurred expenditure equal, subject to sub-paragraph (6) below, to the amount of expenditure for which he will become liable in complying with the obligation referred to in sub-paragraph (1)(a) above.
> (3) If, in a case where this paragraph applies,—
> (a) the realised development value accruing to the chargeable person on the part disposal exceeds
> (b) the amount of realised development value which would have accrued to him if, instead of making the part disposal, he had disposed of his interest in the land in which the lease concerned subsists for a consideration equal to its market value on the date of the part disposal,
> development land tax shall not be chargeable on the amount of the excess.
> (4) Sub-paragraph (5) below shall apply if, in determining the relevant base value of the interest disposed of by the part disposal referred to in sub-paragraph (1) above,—
> (a) expenditure on relevant improvements is included in the aggregate amount which constitutes base A of that interest, and
> (b) the amount which, before the making of any reduction under paragraph 10 above, constitutes expenditure on relevant improvements consists of or includes an amount of expenditure which is deemed to have been incurred by virtue of subparagraph (2)(b) above, and
> (c) section 6 of this Act applies.
> (5) In a case falling within sub-paragraph (4) above, for the purpose only of determining the amount of the further addition (if any) which, by virtue of section 5(1)(a)(v) of this Act, falls to be included in the aggregate amount referred to in paragraph (a) of that sub-paragraph, the amount which, before the making of any reduction under paragraph 10 above, is the amount of expenditure on relevant improvements shall be reduced by deducting therefrom so much of that amount as consists of expenditure deemed to have been incurred by virtue of sub-paragraph (2)(b) above.
> (6) If the terms of the obligation referred to in subparagraph (1)(a) above do not quantify the amount of expenditure for which the landlord will become liable in complying with the obligation,—
> (a) the amount of expenditure which the landlord is deemed to have incurred by virtue of subparagraph (2)(b) above shall, in the first instance, be the amount for which the Board estimate that he might reasonably be expected to become liable in compliance with the obligation; and
> (b) if it subsequently appears to the Board that the amount of expenditure actually incurred by the landlord in complying with the obligation differs from the amount estimated under paragraph (a) above, such adjustment, whether by way of an assessment or the discharge or repayment of tax or otherwise, shall be made as may be required in consequence.
#### Annuities under Tithe Acts 1936 and 1951
##### 56
@@ -1176,60 +751,33 @@
##### 57
- (1) No charity within the meaning of section 360 of the Taxes Act shall be liable to pay the surcharge imposed by the National Insurance Surcharge Act 1976.
- (2) This section shall be deemed to have come into force on 6th April 1977.
#### Exchange control
##### 58
- (1) In subsection (3) of section 30 of the Exchange Control Act 1947 (which restricts the making of loans of money or securities to bodies corporate which are resident in the scheduled territories but controlled by persons not so resident) for the words " any money, securities " there shall be substituted the words " any money or securities or any instrument to which subsection (3 A) of this section applies ".
- (2) After subsection (3) of the said section 30 there shall be inserted—
> (3A) Except with the permission of the Treasury, no body corporate resident in the scheduled territories which is by any means controlled (whether directly or indirectly) by persons resident outside the scheduled territories shall in the United Kingdom, and no body corporate resident in the United Kingdom which is so controlled shall outside the United Kingdom, issue, negotiate, transfer, renew or otherwise deal with any instrument to which this subsection applies; but a contravention of this subsection shall not affect the validity of any instrument or the rights of the parties to any transaction.
> (3B) Subsection (3A) of this section does not apply to a banknote but, with that exception, applies to—
> (a) any bill of exchange (including a cheque), promissory note, certificate of deposit or similar instrument;
> (b) any other instrument which confers or evidences a right (whether conditional or unconditional) to be paid or to obtain, or to draw on any person for, a sum of money with or without interest, being a right capable of being transferred by delivery of the instrument with or without endorsement; and
> (c) any instrument (not being an instrument within paragraph (a) or (b) above) of a description which is for the time being prescribed for the purposes of this subsection,
> including any such instrument as aforesaid which is governed by the law of a country outside the United Kingdom.
- (3) In section 42(1) of the said Act of 1947 (interpretation) for the definition of " securities " there shall be substituted the following definition (which incorporates the effect of section 55(1) of the Finance Act 1968)—
> - ' securities ' means— shares, stock, bonds, notes (other than promissory notes), debentures, debenture stock, units under a unit trust scheme and shares in an oil royalty; certificates of deposit; Government bills ; and any description of promissory notes which is for the time being prescribed for the purposes of this definition;
and there shall be inserted at the appropriate points in alphabetical order the definitions of " certificate of deposit " and " Government bill" set out in section 55(3) of the said Act of 1968.
- (4) In sections 21(1)(c) and 22(1)(b) of the said Act of 1947 (which restrict the import and export of certain instruments) after the words " Treasury bills " there shall be inserted the words (which reproduce the effect of section 55(2) of the said Act of 1968) ", Government bills, certificates of deposit or any description of promissory notes which is for the time being prescribed under paragraph (d) of the definition of ' securities' in section 42(1) of this Act ".
- (5) Any amendment by this section of a provision which extends to the Channel Islands by virtue of any Order in Council under section 43(3) of the said Act of 1947 extends similarly; and, without prejudice to any further provision made by any such Order, section 30(3A) shall so extend with the substitution for references to the United Kingdom of references to the Channel Islands as defined in any such Order.
- (6) Subsections (1) and (2) above, and so much of subsection (5) above as relates to those subsections, shall not come into force until such day as the Treasury may appoint by order made by statutory instrument.
#### Citation, interpretation, construction and repeals
##### 59
- (1) This Act may be cited as the Finance Act 1977.
- (2) In this Act "the Taxes Act" means the Income and Corporation Taxes Act 1970.
- (2) In this Act “*the Taxes Act*” means the Income and Corporation Taxes Act 1970.
- (3) In this Act—
- (a) Part I (except sections 5 and 6) shall be construed as one with the Customs and Excise Act 1952;
- (b) Part II shall be construed as one with Part I of the Finance Act 1972;
- (c) Part III, so far as it relates to income tax, shall be construed as one with the Income Tax Acts, so far as it relates to corporation tax shall be construed as one with the Corporation Tax Acts and, so far as it relates to capital gains tax, shall be construed as one with Part III of the Finance Act 1965 ;
- (d) Part IV shall be construed as one with Part III of the Finance Act 1975.
- (a) Part I (except sections 5 and 6) shall be construed as one with such of the Customs and Excise Acts 1979 as the provision in question requires.
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) Part III, so far as it relates to income tax, shall be construed as one with the Income Tax Acts, so far as it relates to corporation tax shall be construed as one with the Corporation Tax Acts . . .
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (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 9 to this Act (which include spent enactments) 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
## SCHEDULES 1,2
## SCHEDULE 2
@@ -1249,7 +797,7 @@
## V — Provisions substituted for Part II of Schedule 5
## SCHEDULE 5
## SCHEDULES 7,8
## I — Provisions substituted for Part II of Schedule 1
@@ -1952,17 +1500,17 @@
## SCHEDULE 9
## PART I — Customs and Excise
## PART II — Tobacco
## PART III — Value Added Tax
## PART IV — Child Benefit etc.
## PART V — Annuities under Tithe Acts 1936 and 1951
## PART VI — Miscellaneous
## Part I — Customs and Excise
## Part II — Tobacco
## Part III — Value Added Tax
## Part IV — Child Benefit etc.
## Part V — Annuities under Tithe Acts 1936 and 1951
## Part VI — Miscellaneous
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1977-07-29
Finance Act 1977
original version
Text at this date