Finance Act 1980

• (9) Expenditure shall not by virtue of this section be allowable under section 3 of the said Act of 1975 unless it was incurred after the said 31st December or would have been allowable under section 4 of that Act but for the proviso to subsection (1) of that section.

• (10) For the purposes of section 4 of the said Act of 1975 expenditure incurred in acquiring, bringing into existence or enhancing the value of an asset which before the passing of this Act was used for the purpose of any process which, if this Act had been in force, would by virtue of this section have constituted initial treatment of oil won from an oil field shall be treated as having been incurred on the date when the asset was first so used; and for the purposes of that section (but not of the foregoing provisions of this subsection) the use of the asset in connection with the field shall be treated as having begun—

• (a) on 1st January 1980; or

• (b) the date on which the asset was first used for that purpose,

whichever is the later.

• (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part VII — Development Land Tax

Enterprise zones

110–116

Charities

111

• (1) For sections 24 and 25 of the Development Land Tax Act 1976 (exemption for charities) there shall be substituted—

(24) (1) Development land tax shall not be chargeable on any realised development value accruing to a charity on the disposal of an interest in land. (2) If, at any time after the disposal of an interest in land, the body which made the disposal ceases to be a charity, then, immediately after it so ceases, an amount of realised development value equal, subject to subsection (3) below, to that in respect of which the exemption in subsection (1) above applied on the disposal shall be treated for the purposes of this Act as accruing to that body, as on the disposal of an interest in land. (3) The amount of realised development value which is treated as accruing to a body under subsection (2) above shall not exceed the market value of the property (if any) which— (a) is held by that body immediately before the time at which it ceases to be a charity, and (b) is not immediately after that time held for charitable purposes by another body, and for the purposes of this subsection section 7(1) above shall apply in relation to the market value of any property other than an interest in land as it applies in relation to the market value of an interest in land.

• (2) This section has effect in relation to any disposal after 25th March 1980.

Disposals to exempt bodies

112

Section 39 of the Development Land Tax Act 1976 (deduction of tax from consideration in case of disposals to exempt bodies) shall not have effect in relation to any disposal after 5th August 1980.

Payment by instalments

113

• (1) Paragraph 45 of Schedule 8 to the Development Land Tax Act 1976 (payment by instalments) shall be amended as follows.

• (2) After sub-paragraph (2) there shall be inserted—

(2A) In any case where the liability referred to in subparagraph (1) above arises on the deemed disposal of an interest in land or on the occurrence of an event to which paragraph 44(1) above applies, sub-paragraph (2)(a) above shall have effect with the substitution for the reference to twelve months of a reference to two years.

.

• (3) In sub-paragraph (3)(c) for the words “eight years ” there shall be substituted the words “nine years ”.

• (4) This section has effect where the liability in question arises on a deemed disposal after 25th March 1980 or on the occurrence after that date of an event to which paragraph 44(1) of the said Schedule 8 applies.

Advance assessment of tax on deemed disposals

114

• (1) Subject to the provisions of this section, a person who has a major interest in any land and intends to begin a project of material development on that land or any part of it may give a notice to the Board—

• (a) specifying the project; and

• (b) electing to be assessed and charged with development land tax in accordance with this section in respect of the deemed disposal which will be occasioned by the beginning of that project.

• (2) Any notice under this section shall contain such information as the Board may reasonably require for the purposes of this section and shall be in such form as they may prescribe.

• (3) Where a person has given a notice under this section in respect of a project—

• (a) he may be assessed and charged with development land tax in respect of the deemed disposal referred to in subsection (1)(b) above before the project is begun; and

• (b) the tax shall be so assessed and charged by reference to the market value of his interest at the date of the notice; and

• (c) section 5 of the Development Land Tax Act 1976 and paragraph 8 of Schedule 1 to that Act shall apply as if the project had been begun on that date.

• (4) If a person who has given a notice in respect of a project under this section begins that project within the period of two years beginning with the date of the notice the tax with which he is chargeable in respect of the deemed disposal referred to in subsection (1)(b) above shall be that assessed and charged on him in accordance with subsection (3) above; but if he does not begin that project within that period the notice shall be void.

• (5) A notice under this section shall also be void if any information contained in it is not such as to make full and accurate disclosure of all facts and considerations which are material for tax to be assessed and charged in pursuance of the notice ; and a notice under this section may be withdrawn at any time before the project in question is begun.

• (6) A notice under this section shall not affect the time when any tax is payable except that where the tax has been assessed and charged in pursuance of such a notice paragraph 45 of Schedule 8 to the said Act of 1976 shall have effect as if—

• (a) sub-paragraph (2A) were omitted, and

• (b) in sub-paragraph (3)(c) for the words “nine years” there were substituted the words “eight years ”.

• (7) A person who has given a notice under this section (including a notice which has become void or which has been withdrawn) in respect of a project on any land shall not be entitled to give another notice in respect of that or any other project on that land or any part of it.

• (8) Where a notice under this section becomes void or is withdrawn any assessment made in pursuance of it shall be of no effect and where a person has paid any tax as a result of a notice under this section which has become void or which has been withdrawn, the tax shall be repaid to him with interest at the rate for the time being prescribed for the purposes of section 86A of the Taxes Management Act 1970; and any such interest shall not be income of that person for any tax purposes.

• (9) Where a person who has a major interest in land gives a notice under subsection (1) above in respect of a project in respect of which a person having a different interest has given a notice in the previous two years (whether or not the previous notice has become void or been withdrawn), the first-mentioned notice shall be treated for the purposes of subsection (4) above as if given on the date of the previous notice or if there has been more than one previous notice the date of the first of them.

• (10) For the purposes of subsections (4) and (7) of this section companies which are members of the same group shall be treated as the same person; and references in this section to a person beginning a project include references to his causing or permitting another person to do so.

• (11) Nothing in this section affects the value for which a person is deemed to have reacquired an interest on a deemed disposal of it.

• (12) This section shall be construed as one with the said Act of 1976.

Administration

115

• (1) In section 70(2) of the Taxes Management Act 1970 (evidence of payment of interest under section 86 or 87 of that Act) for the words “or 87 ” there shall be substituted the words “, 86A or 87 ”.

• (2) In section 86A of that Act (interest on unpaid tax)—

• (a) in subsection (1) the words “then, except as provided by paragraph 12 of Schedule 7 to the Development Land Tax Act 1976” shall be omitted and for the words “that Act ” there shall be substituted the words “the Development Land Tax Act 1976 ”; and

• (b) in subsection (5) for “£10 ” there shall be substituted “£30 ”.

• (3) In paragraph 39(4) of Schedule 8 to the Development Land Tax Act 1976 (notice of disposals) for the words “section 24(6) of this Act” there shall be substituted the words “section 24(2) of this Act ”.

• (4) Paragraph (a) of subsection (2) above has effect in relation to tax on disposals after 5th August 1980, paragraph (b) of that subsection has effect in relation to interest on tax charged by assessments notice of which is issued after the passing of this Act and subsection (3) above has effect in relation to disposals after 25th March 1980.

Miscellaneous amendments

116

• (1) in section 5(1)(b) and (c) and (6)(ii) of the Development Land Tax Act 1976 (relevant base value calculated by reference to 110 per cent, of current use value or of cost of acquisition) for the words " 110 per cent.“there shall be substituted the words ” 115 per cent. ".

• (2) In section 12(5) of that Act (exclusion of exemption where chargeable person acquired interest from connected person for a consideration less than market value)—

• (a) in paragraph (b) before the words “for a consideration ” there shall be inserted the words " for no consideration or; " and

• (b) in paragraph (c) there shall be inserted at the end the words “being either a part disposal or a disposal of an interest resulting from a part disposal made after the date and within the period mentioned in paragraph (a) above by a person who at the time of the part disposal was connected for the purposes of that Act with the person to whom the part disposal was made ”.

• (3) In section 19(1)(iii) and (7) and section 23(1)(iii) of that Act (deferment of tax on deemed disposal of industrial land or land of statutory undertakers not terminated by subsequent disposal forming part of a sale and lease-back transaction) for the words “a sale and lease-back transaction ” there shall be substituted the words “a lease-back transaction ”;

and in section 19(7)(a) of that Act (which defines such a transaction by reference to part disposals falling within paragraph (b) of subsection (1) of section 3 of that Act) for the words “paragraph (b) of subsection (1) of section 3 ” there shall be substituted the words “section 3(1) ”.

• (4) In section 23(1)(ii) of that Act (deferment of tax for statutory undertakers until disposal of relevant interest) after the words “a disposal ” there shall be inserted the words “which is to other statutory undertakers and ”.

• (5) In paragraph 5 of Schedule 4 to that Act (development excluded from material development)—

• (a) in sub-paragraph (3) (a) for the words “where any development extends to two or more buildings within the same curtilage, those buildings” there shall be substituted the words “two or more buildings within the same curtilage ”;

• (b) after sub-paragraph (3) there shall be inserted—

(4) The rebuilding referred to in paragraph (b) of sub-paragraph (1) above may be on a different site within the same curtilage.

• (6) Subsections (1) and (5) above have effect in relation to disposals after 25th March 1980, subsection (2) above has effect where the acquisition referred to in section 12(5) is after that date and subsections (3) and (4) above have effect where the subsequent disposal referred to in section 19(1) or 23(1) is after that date.

Part VIII — Miscellaneous and Supplementary

Demergers

117

National Heritage Memorial Fund

118

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

• (3) The trustees of the National Heritage Memorial Fund shall be treated for the purposes of section 49(2) of the Finance Act 1974 and section 99 above as a body of persons established for charitable purposes only.

• (4) Section 24 of the Development Land Tax Act 1976 (exemption of charities) and section 57 of the Finance Act 1977 (exemption of charities from national insurance surcharge) shall have effect as if the Trustees were a charity within the meaning of section 360 of the Taxes Act.

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

• (6) This section shall be deemed to have come into force on 1st April 1980.

Transfer of assets of public corporations

119

National Savings Bank

120

• (1) Subject to subsection (2) below, all sums received by the Director of Savings as investment deposits with the National Savings Bank shall from time to time be paid by him into the National Loans Fund in accordance with directions given by the Treasury; and the sums required for repaying, or paying interest on, investment deposits with the Bank shall be charged on that Fund with recourse to the Consolidated Fund.

• (2) There may be retained by the Director of Savings out of the sums received by him as mentioned in subsection (1) above such amounts as may be required by him as a working balance; and there shall be paid to him from time to time out of the National Loans Fund (or, as the case may be, the Consolidated Fund) the sums required for repaying, or paying interest on, investment deposits or for increasing his working balance.

• (3) The amounts to be retained by or paid to the Director of Savings under subsection (2) above shall be determined by agreement between him and the Treasury.

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

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

• (6) The expenses of the Director of Savings in connection with investment deposits shall be defrayed out of moneys provided by Parliament.

• (7) Sections 21 to 23 of the National Savings Bank Act 1971 and so much of section 25 of that Act as relates to investment deposits shall cease to have effect; and Schedule 19 to this Act shall have effect as respects the transition from those provisions to the foregoing provisions of this section.

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

• (9) Subsections (1) to (7) above have effect from 1st January 1981 ....

• (10) This section and Schedule 19 to this Act shall be construed as one with the said Act of 1971.

Penalties

121

Short title, interpretation, construction and repeals

122

• (1) This Act may be cited as the Finance Act 1980.

• (2) In this Act “the Taxes Act” means the Income and Corporation Taxes Act 1970 and the “Taxes Act 1988” means the Income and Corporation Taxes Act 1988.

• (3) In this Act—

• (a) 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 the Capital Gains Tax Act 1979; and

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

• (4) The enactments mentioned in Schedule 20 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.

SCHEDULES 1, 2

SCHEDULES 3, 4

SCHEDULE 3

I — Provisions Substituted for Part II of Schedule 1

II — Provisions Substituted for Part II of Schedule 2

III — Provisions Substituted for Part II of Schedule 3

IV — Provisions Substituted for Part II of Schedule 4

Tables Showing Annual Rates of Duty on Goods Vehicles

V — Provisions Substituted for Part II of Schedule 5

SCHEDULE 4

I — Provisions Substituted for Part II of Schedule 1

II — Provisions Substituted for Part II of Schedule 2

III — Provisions Substituted for Part II of Schedule 3

IV — Provisions Substituted for Part II of Schedule 4 Tables Showing Annual Rates of Duty on Goods Vehicles

V — Provisions Substituted for Part II of Schedule 5

SCHEDULE 5

Gross gaming yield

1

• (1) Subject to sub-paragraph (2) below, the gross gaming yield from any premises in any period shall consist of—

• (a) the receipts in that period from charges made in connection with gaming on the premises by way of games to which section 13 of the Betting and Gaming Duties Act 1972 for the time being applies, being charges authorised by regulations under section 14(2) of the Gaming Act 1968 but exclusive of value added tax and of any charge the payment of which does no more than entitle a person to admission to the premises; and

• (b) where a provider of the premises (or a person acting on his behalf) is banker in relation to any such gaming as aforesaid, the difference between—

• (i) the value in money or money’s worth of the stakes staked with the banker in such gaming; and

• (ii) the value in money or money’s worth of the winnings paid by the banker to those taking part in such gaming otherwise than on behalf of a provider of the premises.

• (2) The Treasury may by order made by statutory instrument amend sub-paragraph (1) above; and subsection (3) of section 15 of the said Act of 1972 (affirmative procedure for orders amending list of chargeable games) shall apply in relation to an order under this sub-paragraph as it applies to an order under subsection (1) of that section.

Returns and payment

2

• (1) The Commissioners may make regulations—

• (a) requiring returns to be made of the gross gaming yield from any premises in any period, being returns certified in such manner as may be specified in the regulations;

• (b) requiring returns to be made of expenses incurred in providing facilities for, or in providing anything in connection with, gaming on premises in respect of which a gaming licence is or has been in force and of bad debts incurred in the provision of such gaming;

• (c) requiring gaming licence duty chargeable by reference to gross gaming yield to be paid at such time and in such manner as may be specified in the regulations.

• (2) Sub-paragraph (1) above is without prejudice to paragraph 8 of Schedule 2 to the said Act of 1972 (general power to make regulations in connection with gaming licence duty) and paragraph 13(1) of that Schedule (penalties) shall apply to regulations under this paragraph as it applies to regulations under the said paragraph 8.

• (3) Regulations under sub-paragraph (1) above or under the said paragraph 8 may be framed by reference to requirements for the time being in force under the Gaming Act 1968.

Power to estimate duty

3

• (1) Where an amount is due on account of gaming licence duty chargeable by reference to gross gaming yield but the Commissioners are unable to ascertain the amount of the duty properly due because—

• (a) returns, accounts, records or other documents have not been made, kept, preserved or produced as required by regulations made under this Schedule or the said Schedule 2; or

• (b) it appears to the Commissioners that any returns, accounts, records or other documents are incomplete or incorrect,

they may estimate the amount due.

• (2) Without prejudice to the recovery of the full amount due or to the making of a further estimate, the amount estimated shall be recoverable as duty properly due unless in any action relating thereto the person liable proves the amount properly due and that amount is less than the amount estimated.

Recovery of duty

4

• (1) The duty payable in accordance with paragraph (b) of section 6(1) or (2) of this Act on a gaming licence in respect of any premises for any period shall be payable by the person who was the holder of the licence but, if not paid by him as required by regulations under paragraph 2(1)(c) above, shall be recoverable from each of the persons mentioned in sub-paragraph (2) below.

• (2) The persons referred to above are—

• (a) the person who was the holder of the licence;

• (b) any other person who was a provider of the premises in the period;

• (c) any other person concerned in the organisation or management of the gaming on the premises in the period; and

• (d) any director of a company which falls within paragraphs (a), (b) or (c) above.

• (3) In paragraphs 10(1) and 11 of the said Schedule 2 (recovery by distress and priority in bankruptcy etc.) after the words “by virtue of paragraph 1 or 12(2)(b) of this Schedule” there shall be inserted the words “or of section 6 of the Finance Act 1980 or Schedule 5 to that Act”.

• (4) Where under paragraph 10 of the said Schedule 2 distress is levied for any amount estimated under paragraph 3 above and it is afterwards proved that the amount properly due was less than the amount estimated, that shall not affect the legality of the distress or anything done under paragraph 10 in connection therewith but the proceeds of sale shall be applied under sub-paragraph (3) of that paragraph in accordance with the amount properly due and not in accordance with the amount estimated.

5

• (1) At the end of paragraph 12(1)(b) of the said Schedule 2 (under which there is a contravention of section 13(3) of the said Act of 1972 unless a provider of the premises in question is the holder of an appropriate licence) there shall be added the words “and has paid all amounts of gaming licence duty which are payable (or which he reasonably believes are payable) by him before that time”.

• (2) In paragraph 12(2)(a) of the said Schedule 2 (penalties) for the words from “be liable” onwards there shall be substituted the words

be liable— (i) on summary conviction, to a penalty of the prescribed sum (as defined in section 171(2) of the Customs and Excise Management Act 1979) or to imprisonment for a term not exceeding six months or to both; (ii) on conviction on indictment, to a penalty of any amount or to imprisonment for a term not exceeding two years or to both.

• (3) Sub-paragraph (2) above has effect from 1st October 1981.

6

In paragraph 15(1) of the said Schedule 2 (search of premises) after the words “any premises” there shall be inserted the words “or that evidence of any such contravention is to be found there”.

Changes of ownership

7

• (1) Paragraph 4 of Schedule 2 to the said Act of 1972 (transfer of licences) shall cease to have effect and section 13(2) of that Act and paragraph 3 of Schedule 2 to that Act (under which gaming licences expire on 31st March and 30th September) shall have effect subject to the following provisions.

• (2) A gaming licence in respect of any premises shall expire if the holder ceases to be a provider of the premises.

• (3) Where a licence in respect of any premises expires by virtue of sub-paragraph (2) above another gaming licence may be granted in respect of the premises, and any such licence—

• (a) shall be expressed to take effect on the day following that on which the previous licence expired; and

• (b) subject to that sub-paragraph, shall expire when the previous licence would have expired apart from the provisions of this paragraph.

• (4) The Commissioners may allow an application for a licence under sub-paragraph (3) above to be made later than required by paragraph 3(1) of the said Schedule 2.

Charge of duty in respect of short licence periods

8

• (1) The parts of gross gaming yield which in accordance with the Table in section 6(1)(b) of this Act are chargeable at rates other than the highest shall, in the case of a licence to which this paragraph applies, be reduced in accordance with regulations made by the Commissioners.

• (2) This paragraph applies to a licence if it is one of two or more licences which by virtue of paragraph 7 above are in force in respect of the same premises for consecutive periods all of which expire in the six months ending with 31st March or 30th September in any year.

• (3) This paragraph also applies to a licence in respect of any premises if—

• (a) the licence is not for the whole of the period of six months ending with 31st March or 30th September in any year; and

• (b) a club has in the course of those six months transferred gaming from those premises to other premises or from other premises to those premises.

9

• (1) Where a licence is one of two or more licences which by virtue of paragraph 7 above are in force in respect of the same premises for consecutive periods all of which expire in the six months ending with 31st March 1981 or 30th September 1981—

• (a) the amount referred to in paragraph (a) of subsection (2) of section 6 of this Act shall be payable only when applying for the first of those licences; but

• (b) paragraph (b) of that subsection shall have effect in relation to each of the licences as if there had been paid when applying for it a part of that amount (after any increase or reduction under subsection (3) of that section) proportionate to the duration of the licence.

• (2) If the holder of any of the licences referred to in sub-paragraph (1) above other than the first makes an application under paragraph 5 of the said Schedule 2—

• (a) the amount of additional duty shall be calculated under sub-paragraph (3) of that paragraph as if the amount referred to in section 6(2)(a) of this Act had been payable on the licence; and

• (b) any additional duty paid shall for the purposes of sub-paragraph (1)(b) above be added to the part apportioned to the licence.

Alteration and surrender of licences etc.

10

• (1) In relation to a licence for a period beginning on or after 1st October 1980 any reference to the duty paid or payable on a licence in paragraph 5 or 6 of the said Schedule 2 shall be construed as a reference to the duty paid or payable without reference to gross gaming yield.

• (2) The said paragraph 6 shall not apply to any licence for a period beginning on or after 1st October 1981.

Co-operation with Gaming Board

11

• (1) No obligation as to secrecy or other restriction on the disclosure of information imposed by statute or otherwise shall prevent—

• (a) the Commissioners or an authorised officer of the Commissioners from disclosing to the Gaming Board for Great Britain or to an authorised officer of that Board, or

• (b) that Board or an authorised officer of that Board from disclosing to the Commissioners or to an authorised officer of the Commissioners,

information for the purpose of assisting the Commissioners in the performance of their duties with respect to gaming licence duty or, as the case may be, the Board in the performance of their duties under the said Act of 1968.

• (2) Information obtained in pursuance of this paragraph shall not be disclosed except—

• (a) to the Commissioners or the Board or an authorised officer of the Commissioners or the Board; or

• (b) for the purpose of any proceedings connected with a matter in relation to which the Commissioners or the Board perform such duties as aforesaid.

Modification of agreements

12

Paragraph 17 of the said Schedule 2 (modification of agreements made before 1st October 1970 where additional duty is payable under the Finance Act 1970 as compared with section 13 of the Finance Act 1966) shall have effect in relation to section 6 of this Act as if for references to 1st October 1970, the Finance Act 1970 and section 13 of the Finance Act 1966 there were substituted respectively references to 1st October 1980, the said section 6 and section 14 of the said Act of 1972.

Regulations

13

Regulations under this Schedule shall be made by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.

Interpretation

14

In this Schedule—

• “the Commissioners” means the Commisioners of Customs and Excise;

• “gaming” has the same meaning as in the said Act of 1968;

• “provider”, in relation to any premises used for gaming, means any person having a right to control the admission of persons to those premises, whether or not he also has a right to control the admission of persons to the gaming.

SCHEDULE 6

PART I — The Betting and Gaming Duties Act 1972

1

In section 21(2) there shall be omitted—

• (a) the words “(a) an ordinary licence, being ” ;

• (b) paragraph (b) together with the word “or” immediately preceding it; and

• (c) the words from “and where a licence ” onwards.

2

• (1) In subsection (1) of section 22 for the words “an ordinary ” there shall be substituted the word “a ”and in paragraph (b) for the words “or the higher ” and “either ” there shall be substituted the words “the higher or the peak ” and “each ” respectively.

• (2) For subsection (5) of that section there shall be substituted the following—

(5) Subject to subsection (6) below, for the purposes of a licence— (a) a machine is chargeable at the lower rate if it can only be played by the insertion into the machine of a coin or coins of a denomination, or aggregate denomination, not exceeding 2p ; (b) a machine is chargeable at the higher rate— (i) if it is on premises which have local authority approval under the Gaming Acts and is not within paragraph (a) above, or (ii) if it is not on such premises and it can only be played by the insertion into it of a coin or coins of a denomination, or aggregate denomination, exceeding 2p but not exceeding 5p ; and (c) a machine is chargeable at the peak rate in any other case. (6) Where the game playable by means of a machine can be played more than once for the insertion of a coin or coins of a denomination, or aggregate denomination, exceeding a sum mentioned in subsection (5) above, the machine is to be treated for the purposes of that subsection as if it can only be played by the insertion into it of a coin of a denomination not exceeding that sum if in effect the amount payable to play the game once does not exceed that sum.

.

3

In section 23—

• (a) for the words “an ordinary”, wherever they occur, there shall be substituted the word “a ”;

• (b) for the Tables in subsection (1) there shall be substituted the following—

Description of machines authorised by the licence	Number of machines of that desciption so authorised	Duty on whole-year licence
Chargeable at the lower rate.	One or more machines	£20 per machine.
Chargeable at the higher rate.	One machine	£25.
Chargeable at the higher rate.	Two or more machines	£25 plus £100 per machine in excess of one.
Description of machines authorised by the licence	Number of machines of that desciption so authorised	Duty on whole-year licence
---	---	---
Chargeable at the lower rate.	One or more machines	£50 per machine.
Chargeable at the higher rate.	One machine	£100.
Chargeable at the higher rate.	Two or more machines	£100 plus £200 per machine in excess of one.
Chargeable at the peak rate.	One or more machines	£300 per machine.

4

Section 24 shall be omitted.

5

• (1) In subsection (1) of section 25 after the words “no gaming machine ” there shall be inserted the words “other than a penny machine ”.

• (2) In subsection (2) of that section—

• (a) the word “ordinary ”, in both places, shall be omitted; and

• (b) there shall be substituted for the words “the lower ” the word “one ” and for the words “the higher” the word “another ”.

• (3) In subsection (3) of that section there shall be substituted—

• (a) for the words “an ordinary ”. the word “a ” ;

• (b) for the words “the lower ” the word “one ” ; and

• (c) for the words “the higher ” the word “another ”.

• (4) In subsection (4) of that section there shall be substituted—

• (a) for the words “an ordinary ” the word “a ” ;

• (b) for the words “one only of the two rates ” the words “at one rate only ” ;

• (c) for the words “at the other rate ” in paragraph (b) the words “at any other rate ”;

and in paragraph (b) the word “ordinary ” shall be omitted.

• (5) Subsection (5) of that section shall be omitted.

6

In section 26(4)—

• (a) paragraph (a) shall be omitted;

• (b) in paragraph (b) the words “penny machine or any other ” shall be omitted and for “l-25p ” there shall be substituted “2p ”; and for the words “an ordinary ” there shall be substituted the word “a ”;

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

(c) in the case of a machine which is on premises which have local authority approval under the Gaming Acts and is not within paragraph (b) above or which is not on such premises and which no player can play except by the insertion into the machine of a coin or coins of a denomination, or aggregate denomination, exceeding 2p but not exceeding 5p, be treated for the purposes of a licence as a number of machines, all chargeable at the higher rate, equal to that number of persons ; and (d) in a case not falling within paragraph (b) or (c) above, be treated for the purposes of a licence as a number of machines, all chargeable at the peak rate, equal to that number of persons ;

.

7

After paragraph 2A of Schedule 4 there shall be inserted the following—

(2B) A gaming machine licence shall not be required in order to authorise the provision of a gaming machine on any premises during March or October of any year if the premises have local authority approval under the Gaming Acts and the provision of the machine on the premises has been authorised by a gaming machine licence for the period from 1st April to 30th September in that year.

.

8

In sub-paragraph (1) of paragraph 4 of that Schedule for the words “an ordinary ”, in both places, there shall be substituted the word “a ” and sub-paragraph (2) of that paragraph shall be omitted.

9

In sub-paragraph (2) of paragraph 5 of that Schedule for the words “An ordinary ” and “an ordinary ” there shall be substituted respectively the words “A ” and “a ” and sub-paragraphs (3) to (5) of that paragraph shall be omitted.

10

In paragraph 7(b) of that Schedule the words “in the case of an ordinary licence ” shall be omitted and there shall be substituted for the words “the lower rate or the higher rate ” the words “one rate ” and for the words “the other rate ” the words “another rate ”.

11

In paragraph 8 of that Schedule—

• (a) in sub-paragraph (2) there shall be substituted—

• (i) for the words “An ordinary ” the word “A ”,

• (ii) in paragraph (a) for the words “one or other, or at each, of the two rates ” the words “one or more of the rates ”, and

• (iii) in paragraph (b) and (c) for the words “the other ” the word “another ” ;

• (b) sub-paragraph (3) shall be omitted ; and

• (c) in sub-paragraph (4) for the words from “except” to the end there shall be substituted " except that where a whole-year licence falls to be amended in pursuance of a late application, that is to say an application made after 31st March immediately preceding 30th September on which it is due to expire—

• (i) in the case of a licence which has not previously been amended in pursuance of a late application, the additional duty shall be eleven-twentieths of that difference, and

• (ii) in any other case, the additional duty shall be the difference between the additional duty that would be payable if no previous late applications had been made and the additional duty paid on any such applications.".

12

In paragraph 9 of that Schedule—

• (a) in sub-paragraph (1) for the words “an ordinary ” there shall be substituted the word “a ” , and

• (b) in sub-paragraph (2), the word “either ”, sub-paragraph (b), and the word “or ” immediately preceding that sub-paragraph, shall be omitted.

13

In paragraph 12 of that Schedule for the words “or at the higher rate or, as the case may be, as penny machines ” there shall be substituted the words “the higher rate, the peak rate or, as the case may be, as being penny machines ”.

PART II — The Miscellaneous Transferred Excise Duties Act (Northern Ireland) 1972

14

In section 43(3) there shall be omitted—

• (a) the words “(a) in the case of a licence chargeable under section 44 or 45 ” ; and

• (b) paragraph (b) together with the word “or” immediately preceding it.

15

• (1) In subsection (1) of section 44 the words “other than gaming machine licences to which section 45 applies ” shall be omitted.

• (2) In subsection (2) of that section for the words “or the higher ” there shall be substituted the words “the higher or the peak ”.

• (3) For subsection (3) of that section there shall be substituted the following—

(3) Subject to subsection (3A) below, a machine is chargeable— (a) at the lower rate, if it can only be played by the insertion into the machine of a coin or coins of a denomination, or aggregate denomination, not exceeding £0.02 ; (b) at the higher rate if it can only be played by the insertion into the machine of a coin or coins of a denomination, or aggregate denomination, exceeding £0.02 but not exceeding £0.05 ; and (c) at the peak rate, in any other case. (3A) Where the game playable by means of a machine can be played more than once for the insertion of a coin or coins of a denomination, or aggregate denomination, exceeding a sum mentioned in subsection (3) above, the machine is to be treated for the purposes of that subsection, as if it can only be played by the insertion into it of a coin of a denomination not exceeding that sum if in effect the amount payable to play the game once does not exceed that sum.

• (4) For the Table in subsection (4) there shall be substituted the following—

Description of machines authorised by the licence	Number of machines of that desciption so authorised	Duty on whole-year licence
Chargeable at the lower rate.	One or more machines	£50 per machine.
Chargeable at the higher rate.	One machine	£100.
Chargeable at the higher rate.	Two or more machines	£100 plus £200 per machine in excess of one.
Chargeable at the peak rate.	One or more machines	£300 per machine.

• (5) In subsection (6)—

• (a) in paragraph (a) for " £0.01 ½ “there shall be substituted ” £0.02 "; and

• (b) after paragraph (a) there shall be inserted the following—

(aa) in the case of a machine which a player cannot play except by the insertion into the machine of a coin or coins of a denomination, or aggregate denomination, exceeding £0.02 but not exceeding £0.05, shall be treated as a number of machines, all chargeable at the higher rate, equal to that number of persons ; and "

and in paragraph (b) for the word “higher” there shall be substituted the word “peak ”.

16

Section 45 shall be omitted.

17

• (1) In subsection (1) of section 46 mere shall be omitted the words from the beginning to “applies ” and there shall be inserted at the end the words " or the value or aggregate value of the benefits in money or money's worth which any player who is successful in a single game played by means of the machine may receive cannot exceed £0.10 ".

• (2) In subsection (2) of that section the words “in the case of a gaming machine licence to which section 44 applies ” shall be omitted and for the words “one of the two rates ” there shall be substituted the words “one rate ” and for the words “the other rate ” the words “another rate ”.

18

• (1) In subsection (1) of section 47 there shall be substituted for the words “the lower rate ” the words “one rate ” and for the words “the higher rate ” the words “another rate ”.

• (2) For subsection (2) of that section there shall be substituted the following—

(2) In accordance with subsection (1), in ascertaining whether there has been a contravention of section 46 in respect of any premises, two or more gaming machine licences may be taken into account only if each relates to machines chargeable at the same rate and is the only licence relating to machines chargeable at that rate.

• (3) In subsection (3) of that section there shall be substituted for the words “the lower rate or the higher rate ” the words “one rate” and for the words “the other rate ” the words “another rate ”.

• (4) Subsection (4) of that section shall be omitted.

19

Part II of Schedule 3 shall be omitted.

20

In paragraph 9(2) of that Schedule the words " an eight-month licence shall expire at die end of 31st October next after that date ; " shall be omitted.

21

• (1) For sub-paragraph (2) of paragraph 11 of that Schedule there shall be substituted the following—

(2) A licence may be amended under this paragraph (a) so as to increase the number of machines which are authorised by the licence for the premises in question (whether chargeable at one or more of the rates) ; or (b) so as to increase the number of machines chargeable at any rate and reduce the number chargeable at another rate; or (c) in the case of a licence which authorises only machines chargeable at one rate, so as to authorise a specified number of machines chargeable at another rate.

.

• (2) In sub-paragraph (3) of that paragraph for the words from “except ” to the end there shall be substituted " except that where a whole-year licence falls to be amended in pursuance of a late application, that is to say an application made after 31st March immediately preceding 30th September on which it is due to expire—

• (i) in the case of a licence which has not previously been amended in pursuance of a late application, the additional duty shall be eleven-twentieths of that difference, and

• (ii) in any other case, the additional duty shall be the difference between the additional duty that would be payable if no previous late applications had been made and the additional duty paid on any such applications. ".

22

In paragraph 13 of that Schedule for sub-paragraphs (a) and (b) there shall be substituted the words “at the lower rate, the higher rate, the peak rate or as being machines for the provision of which such a licence is not required ”.

SCHEDULE 12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART I — Deferment of Recovery Charges

Right of deferment

1

• (1) Where a person is liable to a charge under paragraph 2(1) or 10(1) of Schedule 5 to the Finance Act 1976 (charges by way of recovery of stock relief) in respect of any period of account (hereafter referred to as “the period of charge”) he may, subject to the provisions of this Part of this Schedule, elect that so much (if any) of the charge as is eligible for deferment under those provisions shall be deferred to the next period of account.

• (2) Subject to sub-paragraph (3) below, the amount of a charge eligible for deferment is so much of it as exceeds 5 per cent, of the opening stock value in the period of charge.

• (3) Where the amount that would be eligible for deferment under sub-paragraph (2) above exceeds £100,000 and at the relevant time the person in question was a net debtor in respect of trading stock—

• (a) none of the excess shall be eligible for deferment unless the value of his trading stock at that time exceeded his net indebtedness; and

• (b) the amount of the excess eligible for deferment shall be reduced by the proportion which his net indebtedness bore to that value.

• (4) The relevant time referred to in sub-paragraph (3) above is—

• (a) the beginning of the period or earliest period of account ending in the financial year 1979 (in the case of a company) or the year 1979-80 (in other cases); or

• (b) if there is no such period of account, the beginning of the period of account current at the end of that financial year or year of assessment, as the case may be.

• (5) For the purposes of sub-paragraph (3) above a person was at the time there mentioned a net debtor in respect of trading stock if—

• (a) the amount owed by him at that time (whether or not payment had become due) in respect of the trading stock which he then held or had previously sold in the course of the trade or otherwise disposed of, exceeded

• (b) the amount then owed to him (whether or not payment had become due) in respect of trading stock sold by him in the course of the trade or otherwise disposed of;

and references to his net indebtedness are to that excess.

• (6) For the purposes of sub-paragraph (5) above there shall be left out of account—

• (a) any amounts owed to the person in question which are allowable as deductions in respect of bad or doubtful debts in computing his profits or gains for the purposes of Case I of Schedule D ; and

• (b) any amounts of value added tax owed by him to the Commissioners of Customs and Excise or by those Commissioners to him.

• (7) Subject to sub-paragraph (8) below, no election shall be made by any person in respect of a charge for any period of account (and any election already made shall be treated as of no effect) if—

• (a) he was liable to a charge under the said paragraph 2(1) or 10(1) in respect of the period of account preceding the period of charge; or

• (b) the period of charge or the next period of account is longer or shorter than twelve months ; or

• (c) during or at the end of the period of charge or of the preceding or the next period of account—

• (i) the whole or part of the trade is transferred to or from another person ; or

• (ii) there is a change in the persons engaged in carrying on the trade.

• (8) Sub-paragraph (7)(b) above applies only where the period of charge or the next period of account ends in or after the financial year 1980 (in the case of a company) or the year 1980-81 (in other cases).

Elections

2

Any election under this Part of this Schedule shall be by notice in writing sent to the inspector, in the case of a company, within two years after the end of the period of charge and, in any other case within two years after the end of the year of assessment in which the period of charge ends; and paragraph 19(1) of the said Schedule 5 (partnerships) shall apply to any such election as it applies to a claim under that Schedule.

Effect of deferment

3

Where a charge under the provisions of paragraph 2(1) or 10(1) of the said Schedule 5 is deferred under this Part of this Schedule from one period to another, the other provisions of Schedule 5 shall have effect as if it were a charge under paragraph 2(1) or 10(1) in respect of the second period instead of the first but—

• (a) the liability to the deferred charge in the second period shall not be excluded by paragraph 2(2) or 10(2) of that Schedule (final charge on cessation);

• (b) the amount of unrecovered past relief in any period shall be determined under that Schedule as if the charge had been made in respect of the period from which it is deferred; and

• (c) references in paragraph 1 above to a charge to which a person is liable in respect of a period of account do not include references to a charge which has been deferred to that period under this Part of this Schedule.

Revocation of election

4

• (1) Where the profits or gains on which a person has been assessed to income tax for any year of assessment are adjusted under section 115, 117 or 118 of the Taxes Act, then, if the adjustment relates to a year of assessment—

• (a) for which he has become liable to be assessed in respect of a charge deferred pursuant to an election under this Part of this Schedule ; or

• (b) for which he would have been liable to be assessed in respect of the charge if it had not been so deferred,

he (or if he has died, his personal representatives) may revoke the election by notice in writing sent to the inspector within one year after the end of the year of assessment in which the adjustment is made.

• (2) Where an election is revoked under this paragraph the said Schedule 5 shall have effect as if the election had not been made and all such assessments or alterations of assessments or repayments of tax may be made as are required to restore the position to what it would have been but for the election.

Interpretation

5

Paragraph 27(1) of the said Schedule 5 (application to professions etc.) has effect in relation to any reference in this Part of this Schedule to a trade; and any expression used in this Part of this Schedule which is also used in the said Schedule 5 has the same meaning as in that Schedule.

Commencement

6

This Part of this Schedule applies where the period of charge ends in or after the financial year 1979 (in the case of a company) or the year 1979-80 (in other cases).

PART II — Definition of Trading Stock

Exclusion of certain buildings

7

In relation to any period of account beginning after 26th March 1980 paragraph 29 of the said Schedule 5 (definition of “trading stock”) shall have effect with the substitution in subparagraph (3) for the words “references to development are references to the contraction or substantial reconstruction of buildings on the land in question ” of the words “references to development are, in relation to land other than a building, references to the construction or substantial reconstruction of buildings on the land and, in relation to a building, references to its construction or substantial reconstruction ”.

Recovery charges

8

• (1) Where at the relevant time, that is to say, the beginning of the first period of account in relation to which paragraph 7 above applies there is unrecovered past relief attributable to assets which by virtue of that paragraph are disqualified from being trading stock (hereafter referred to as “disqualified stock”), charges by way of recovery of relief shall be made—

• (a) on the first occasion when at the end of that or a subsequent period of account the value of disqualified stock is less than at the relevant time; and

• (b) on any subsequent occasion when at the end of a period of account the value of disqualified stock is less than on the last occasion on which a charge fell to be made under this sub-paragraph;

and the amount of any charge under paragraph (a) or (b) above shall be equal to whichever is the lesser of the reduction in question or the amount of unrecovered past relief attributable to disqualified stock at the beginning of the period of account in which the reduction took place.

• (2) In relation to unrecovered past relief attributable to disqualified stock—

• (a) the charges under sub-paragraph (1) above shall be instead of those under sub-paragraph (1) of paragraph 2 and subparagraph (1) of paragraph 10 of the said Schedule 5 but shall be treated for the purposes of the other provisions of that Schedule (but not for the purposes of Part I of this Schedule) as if they were charges under those sub-paragraphs;

• (b) paragraphs 20 and 21 of that Schedule shall not displace the operation of any charge under paragraph 2(2) or 10(2) of that Schedule ; and

• (c) references in paragraphs 2(3) and 10(3) of the said Schedule 5 to unrecovered past relief shall apply as in the case of other unrecovered past relief.

• (3) Where the unrecovered past relief at the relevant time is attributable partly to disqualified stock and partly to other stock, the part attributable to disqualified stock shall be arrived at by apportioning the unrecovered past relief between the disqualified stock and the other stock in accordance with the respective values of the stock of each kind held at that time.

Interpretation

9

Any expression used in this Part of this Schedule which is also used in the said Schedule 5 has the same meaning as in that Schedule.

SCHEDULE 13. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1

In section 69 of the Finance (No. 2) Act 1975 (deductions on account of tax etc. from payments to certain sub-contractors in construction industry) after subsection (3) there shall be inserted—

(3A) Paragraph (b) of subsection (1) above also applies to a person carrying on a business at any time if— (a) his average annual expenditure on construction operations in the period of three years ending with the end of the last period of account before that time exceeds £250,000, or (b) where he was not carrying on the business at the beginning of that period of three years, one-third of his total expenditure on construction operations for the part of that period during which he has been carrying on the business exceeds £250,000 ; and in this section “period of account” means a period for which an account is made up in relation to the business in question. (3B) Where paragraph (b) of subsection (1) above begins to apply to any person in any period of account by virtue of his falling within subsection (3A) above, it shall continue to apply to him until he satisfies the Board that his expenditure on construction operations has been less than £250,000 in each of three successive years beginning in or after that period of account. (3C) Where the whole or part of a trade is transferred by a company (“the transferor ”) to another company (“the transferee ”) and section 252 of the Taxes Act (company reconstructions) has effect in relation to the transfer, then in determining for the purposes of this section the amount of expenditure incurred by the transferee, the whole or, as the case may be, a proportionate part of any expenditure incurred by the transferor at a time before the transfer shall be treated as if it had been incurred at that time by the transferee and where only a part of the trade is transferred the expenditure shall be apportioned in such manner as appears to the Board, or on appeal to the Commissioners, to be just and reasonable.

.

2

In subsection (6) of section 70 of the said Act of 1975 (issue of certificates excepting persons from section 69 of that Act) the words from “other than ” onwards (which exclude certain matters from the right of appeal conferred by that subsection) shall be omitted.

3

In subsection (8) of that section (regulations) after the words “subsection (7) above” there shall be inserted the words “or Schedule 12 to this Act ”.

4

• (1) Paragraph 2 of Part I of Schedule 12 to the said Act of 1975 (condition that for three years ending with his application for a certificate under section 70 the applicant must have been employed in the United Kingdom as the holder of an office or employment or as a person carrying on a trade profession or vocation) shall be amended in accordance with sub-paragraphs (2) and (3) below.

• (2) The existing provisions of that paragraph shall become subparagraph (1) and the words in parenthesis shall be omitted.

• (3) At the end of that sub-paragraph there shall be inserted tho following—

(2) An applicant who has not fulfilled the condition in sub-paragraph (1) above shall nevertheless be treated as satisfying this condition if— (a) he satisfies the Board that he has been employed as mentioned in that sub-paragraph throughout a period of three years beginning not more than six years before the date of his application and ending on a date before that date ; (b) he satisfies the Board either— (i) that he has not been so employed throughout the whole of the period between those dates, or (ii) that he has not been so employed during any part of that period other than a part for which he specifies he has been so employed; and (c) where the applicant states that he has been outside the United Kingdom for the whole or part of the period mentioned in paragraph (b) above, he satisfies the Board of that fact by such evidence as may be prescribed in regulations made by the Board. (3) The Board may for the purposes of this paragraph treat a person as having been employed as mentioned in sub-paragraph (1) above throughout a period of three years if during a period of three years he has been so employed except for a period or periods not exceeding six months or six months in aggregate. (4) In this Part of this Schedule “the qualifying period” means— (a) in relation to a person who is within sub-paragraph (2) above, the period starting at the beginning of the last period of three years before his application throughout which he has been employed as mentioned in subparagraph (1) above (or is by virtue of sub-paragraph (3) above treated as having been so employed) and ending on the date of his application, and (b) in the case of any other person, the period of three years ending with the date of his application.

5

Sub-paragraphs (2) and (3) of paragraph 4 above shall apply to paragraph 1 of Part II of that Schedule as they apply to paragraph 2 of Part I substituting in the words inserted by sub-paragraph (3) the word “partner ” for the word “applicant” wherever it occurs.

6

• (1) At the end of paragraph 3 of Part I of that Schedule there shall be inserted the following—

(3) An applicant who must satisfy the Board under paragraph 2(2) above that he has been outside the United Kingdom for the whole or part of the period mentioned in paragraph 2(2)(b) must also satisfy them by such evidence as may be prescribed in regulations made by the Board that he has complied with any obligations imposed under the tax laws of any country in which he was living during that period which are comparable to the obligations mentioned in sub-paragraph (1) above.

.

• (2) The same words shall be inserted at the end of paragraph 2 of Part II of that Schedule substituting “paragraph 1(2) ” for “paragraph 2(2)” and “partner ” for “applicant”.

7

In paragraph 3(2) of Part I of that Schedule (power of Board to disregard failure to comply with tax obligations if of opinion that the failure ought to be disregarded for the purposes of an application for a certificate) for the words from “of the opinion that” onwards there shall be substituted the words “of the opinion that the failure is minor and technical and does not give reason to doubt that the conditions mentioned in paragraph 7 below will be satisfied ”; and the same amendment shall be made in paragraph 2(2) of Parts II, III and IV of that Schedule, substituting for “paragraph 7 ” in the words to be inserted in Part II and Part III, the words “paragraph 4 ” and “paragraph 5 ” respectively.

8

Paragraph 6 of Part I, paragraph 4 of Part III and paragraph 5 of Part IV of that Schedule (insurance cover as a condition of obtaining a certificate) shall be omitted.

SCHEDULES 14, 15

1

In paragraph 8(1)(a) after the words “its distributable income ” there shall be inserted the words “, other than trading income, ”.

2

For paragraph 9(2) there shall be substituted—

(2) In the application of sub-paragraph (1) above to a company which is a trading company or a member of a trading group the trading income shall be disregarded ; and in the application of that sub-paragraph to a trading company the estate income— (a) if it is less than the appropriate fraction of the relevant maximum amount, shall be treated as reduced by one-half of the amount required to make it up to that fraction of the relevant maximum amount; or (b) if it is less than the appropriate fraction of the relevant minimum amount, shall be disregarded ; and the appropriate fraction referred to above shall be that of which the numerator is the amount of the estate income and the denominator is the aggregate of that amount and of the amount of the trading income.

3

In paragraph 10(2) there shall be inserted at the end the words " and for the purposes of sub-paragraph (ii) above relief under section 254 or 255 shall be treated as having been given first against franked investment income which is not trading income and secondly, so far as it cannot be given as aforesaid, against franked investment income which is trading income. ".

4

For paragraph 10(4) there shall be substituted—

(4) For the purposes of this Schedule, the “estate or trading income ” of a company means income (in this Schedule referred to as “estate income”) which falls within sub-paragraph (4A) and not within sub-paragraph (5) below and income (in this Schedule referred to as “trading income”) which falls within sub-paragraph (5) below. (4A) The income falling within this sub-paragraph is income which is chargeable to tax under Schedule A or Schedule B, and income (other than yearly or other interest) which is chargeable to tax under Schedule D, and which arises from the ownership or occupation of land (including any interest in or right over land) or from the letting furnished of any building or part of a building.

.

5

In paragraph 10(5) after “(5) ” there shall be inserted the words " The income falling within this sub-paragraph is income which is not investment income for the purposes of paragraph 11(1) below; and " ; and for the words following paragraph (b) there shall be substituted the words " its income incidental to that trade shall also fall within this sub-paragraph. ".

6

After paragraph 10(8) there shall be inserted—

(9) In the application of sub-paragraph (8) above to a company which is a trading company or a member of a trading group there shall be substituted for paragraphs (b) and (c)— (b) secondly, so far as it cannot be made under (a) above, from the company's estate income so charged ; (c) thirdly, so far as it cannot be made under (a) or (b) above, from the company's trading income so charged:

.

7

In paragraph 13 (1)(a) after the words “distributable income ” there shall be inserted the words “other than trading income ”.

SCHEDULE 10

PART I — Approval Of Schemes

1

• (1) On the application of a body corporate (in this Schedule referred to as “the company concerned”) which has established a savings-related share option scheme, the Board shall approve the scheme—

• (a) if they are satisfied that the scheme fulfils the conditions specified in Part II of this Schedule; and

• (b) unless it appears to them that there are features of the scheme which are neither essential nor reasonably incidental to the purpose of providing for employees and directors benefits in the nature of rights to acquire shares.

• (2) An application under sub-paragraph (1) above shall be made in writing and contain such particulars and be supported by such evidence as the Board may require.

• (3) Where the company concerned has control of another company or companies, the scheme may be expressed to extend to all or any of the companies of which it has control and in this Schedule a scheme which is expressed so to extend is referred to as a “group scheme” and in relation to a group scheme, the expression “participating company” means the company concerned or a company of which the company concerned has control and to which for the time being the scheme is expressed to extend.

2

If, at the time the application is pending, the Board have no evidence that the condition set out in paragraph 14 of Part II of this Schedule is satisfied, then, if the other conditions are satisfied, the Board may approve the scheme subject to the remaining condition being satisfied ; and if that condition is not satisfied the approval shall be of no effect.

3

• (1) If, at any time after the Board have approved a scheme, any of the conditions mentioned in paragraph 1 above ceases to be satisfied or the company concerned fails to provide information requested by the Board under paragraph 25 below the Board may withdraw the approval with effect from that time or from such later time as the Board may specify but where rights obtained under a scheme before the withdrawal of approval from the scheme under this paragraph are exercised after the withdrawal, section 47(1 )(b) above shall apply in respect of the exercise as if the scheme were still approved.

• (2) If an alteration is made in the scheme at any time after the Board have approved it, the approval shall not have effect after the date of the alteration unless the Board have approved the alteration.

4

If the company concerned is aggrieved by—

• (a) the failure of the Board—

• (i) to approve the scheme,

• (ii) to decide that a condition subject to which the approval has been given is satisfied, or

• (iii) to approve an alteration in the scheme ; or

• (b) the withdrawal of approval,

it may, by notice in writing given to the Board within thirty days from the date on which it is notified of the Board's decision, require the matter to be determined by the Special Commissioners, and the Special Commissioners shall hear and determine the matter in like manner as an appeal.

PART II — Conditions as to Schemes

General conditions

5

• The scheme must provide—

• (a) for directors and employees to obtain rights to acquire shares (in this Schedule referred to as “scheme shares”) which fulfil the conditions specified in paragraphs 15 to 19 below; and

• (b) for the scheme shares to be paid for with monies not exceeding the amount of repayments made and any interest paid to them under a certified contractual savings scheme, within the meaning of section 415 of the Taxes Act, which has been approved by the Board for the purposes of this Schedule.

6

Subject to paragraphs 7 to 10 below, the rights obtained under the scheme must not be capable of being exercised before the bonus date, that is to say the date on which repayments under the certified contractual savings scheme are due ; and for the purposes of this paragraph and paragraph 5 above—

• (a) repayments under a certified contractual savings scheme may be taken as including or as not including a bonus;

• (b) the time when repayments are due shall be, where repayments are taken as including the maximum bonus, the earliest date on which the maximum bonus is payable and, in any other case, the earliest date on which a bonus is payable under the scheme ; and

• (c) the question what is to be taken as so included must be required to be determined at the time when rights under the scheme are obtained.

7

The scheme must provide that if a person who has obtained rights under the scheme dies before the bonus date the rights must be exercised, if at all, within twelve months after the date of his death and if he dies within six months after the bonus date the rights may be exercised within twelve months after the bonus date

8

The scheme must also provide that if a person who has obtained rights under it ceases to hold the office or employment by virtue of which he is eligible to participate in the scheme by reason of injury, disability, redundancy within the meaning of the Employment Protection (Consolidation) Act 1978 or retirement on reaching pensionable age within the meaning of Schedule 20 to the Social Security Act 1975 or any other age at which he is bound to retire in accordance with the terms of his contract of employment, then the rights must be exercised, if at all, within six months of his so ceasing and, if he so ceases for any other reason within three years of obtaining the rights, they may not be exercised at all; and in relation to the case where he so ceases for any other reason more than three years after obtaining the rights the scheme must either provide that the rights may not be exercised or that they must be exercised, if at all, within six months of his so ceasing.

9

The scheme must also provide that where a person who has obtained rights under it continues to hold the office or employment by virtue of which he is eligible to participate in the scheme after the date on which he reaches pensionable age within the meaning of Schedule 20 to the Social Security Act 1975, he may exercise the rights within six months of that date.

10

• (1) The scheme may also provide that—

• (a) if any person obtains control of a company whose shares are scheme shares as a result of making—

• (i) a general offer to acquire the whole of the issued ordinary share capital of the company which is made on a condition such that if it is satisfied the person making the offer will have control of the company, or

• (ii) a general offer to acquire all the shares in the company which are of the same class as the scheme shares, rights obtained under the scheme to acquire shares in the company may be exercised within six months of the time when the person making the offer has obtained control of the company and any condition subject to which the offer is made has been satisfied ;

• (b) if under section 206 of the Companies Act 1948 or section 197 of the Companies Act (Northern Ireland) 1960 (power to compromise with creditors and members) the court sanctions a compromise or arrangement proposed for the purposes of or in connection with a scheme for the reconstruction of a company whose shares are scheme shares or its amalgamation with any other company or companies, rights obtained under the share option scheme to acquire shares in the company may be exercised within six months of the court sanctioning the compromise or arrangement;

• (c) if any person becomes bound or entitled to acquire shares in a company whose shares are scheme shares under section 209 of the said Act of 1948 or section 200 of the said Act of 1960 (power to acquire shares of shareholders dissenting from schemes or contract approved by majority), rights obtained under the scheme to acquire shares in the company may be exercised at any time when that person remains so bound or entitled ; and

• (d) if a company whose shares are scheme shares passes a resolution for voluntary winding up, rights obtained under a scheme to acquire shares in the company may be exercised within six months of the passing of the resolution.

• (2) For the purposes of this paragraph a person shall be deemed to have obtained control of a company if he and others acting in concert with him have together obtained control of it.

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Except as provided in paragraph 7 above, rights obtained by a person under the scheme must not be capable—

• (a) of being transferred by him, or

• (b) of being exercised later than six months after the bonus date.

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