Finance Act 1984

• (b) both are under the control of the same person or persons;

and in this subsection “control” has the meaning given by section 1124 of the Corporation Tax Act 2010 .

• (3) In any case where a company (in this subsection and subsection (4) below referred to as “the participator company") is or has been a participator in an oil field and—

• (a) the participator company is a 51 per cent. subsidiary of another company, or

• (b) another company is a 51 per cent. subsidiary of the participator company, or

• (c) the participator company and another company are both 51 per cent. subsidiaries of a third company,

the Board may, by notice in writing given to any company referred to in paragraphs (a) to (c) above which is resident in the United Kingdom, require it to make available for inspection any relevant books, accounts or other documents or records whatsoever of the company itself or, subject to subsection (5) below, of any other company which is its 51 per cent. subsidiary.

• (4) In subsection (3) above “relevant” means relating to any transaction which is relevant for the purpose of—

• (a) determining whether a disposal of any oil by the participator company is a sale at arm’s length; or

• (b) ascertaining the market value of oil won by the participator company.

• (5) In any case where—

• (a) under subsection (3) above a company is by notice required to make available for inspection any books, accounts, documents or records of one of its 51 per cent. subsidiaries which is resident outside the United Kingdom, and

• (b) it appears to the Board, on the application of the company, that the circumstances are such that the requirement ought not to have effect,

the Board shall direct that the company need not comply with the requirement.

• (6) If, on an application under subsection (5) above, the Board refuse to give a direction under that subsection, the company concerned may appeal, by notice in writing given to the Board within thirty days after the refusal, and, where such an appeal is notified to the tribunal, the tribunal , if satisfied that the requirement in question ought in the circumstances not to have effect, may determine accordingly.

• (6A) The provisions of paragraphs 14A to 14I of Schedule 2 to the principal Act shall apply to appeals under this paragraph subject to any necessary modifications.

• (7) In this section—

• “company” means any body corporate; and

• “51 per cent. subsidiary" shall be construed in accordance with Chapter 3 of Part 24 of the Corporation Tax Act 2010 (subsidiaries).

Offences relating to section 115

116

• (1) Where a company has been required by notice under subsection (1) or subsection (3) of section 115 above to give any particulars or, as the case may be, to make available for inspection any books, accounts, documents or records and fails to comply with the notice, the company shall be liable, subject to subsection (3) below—

• (a) to a penalty not exceeding £500; and

• (b) if the failure continues after it has been declared by the court or the tribunal before whom proceedings for the penalty have been commenced, to a further penalty not exceeding £100 for each day on which the failure so continues.

• (2) Where a company fraudulently or negligently furnishes, gives, produces or makes any incorrect information, document or record of a kind mentioned in subsection (1) or subsection (3) of section 115 above, the company shall be liable to a penalty not exceeding £2,500 or, in the case of fraud on its part, £5,000.

• (3) A company shall not be liable to any penalty incurred under subsection (1) above for failure to comply with a notice if the failure is remedied before proceedings for the recovery of the penalty are commenced.

• (4) In this section “company” has the same meaning as in section 115 above.

PART VI — MISCELLANEOUS AND SUPPLEMENTARY

National insurance surcharge

Abolition of national insurance surcharge

117

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

Development land tax

Increase of exemption from õ0,000 to ÷5,000

118

Deferred liability

119

• (1) In section 19A of the Development Land Tax Act 1976 (which, in the case of certain deemed disposals before 1st April 1984, defers liability to tax in relation to development for the owner's use) the words " and before 1st April 1984 " shall be omitted.

• (2) In section 27 of that Act (deferred liability for tax) in subsection (2), at the beginning of paragraph (b) (1iability to arise at the time of the operative disposal) there shall be inserted the words " except as provided by subsection (2A) below ".

• (3) After subsection (2) of the said section 27 there shall be inserted the following subsection:—

(2A) If the operative disposal does not fall within the period of twelve years beginning on the date of the deemed disposal, any liability for development land tax on the accrued development value shall be extinguished with effect from the expiry of that period.

• (4) At the end of the said section 27 there shall be added the following subsection:—

(8) The extinguishment of any deferred liability for development land tax on the accrued development value shall not affect the operation of any enactment (whether passed before or after this Act) which, before the liability was extinguished, had effect in relation to that liability or the accrued development value.

• (5) In Schedule 8 to that Act, after paragraph 38 there shall be inserted the following paragraph:—

(38A) A person who becomes chargeable to development land tax by virtue of a disposal— (a) which is the operative disposal for the purposes of section 27 of this Act or which is a further disposal falling within subsection (5) of that section, and (b) of which he is not required to give notice by virtue of any of the preceding provisions of this Part of this Schedule, shall give notice of it to the Board not later than the end of the financial year following that in which the disposal occurred.

• (6) In that Schedule, in paragraph 41 (penalties) in sub-paragraph (1)(a), after the words " 35(1) or" there shall be inserted the words " paragraph 38A or ".

Extension of relief for Housing Corporation and registered housing associations

120

• (1) In section 26 of the Development Land Tax Act 1976 (provisions relating to the Housing Corporation and certain housing associations) in subsection (1) (exemption from tax on realised development value accruing on deemed disposals by approved co-operative housing associations and self-build societies) for paragraphs (a) and (b) there shall be substituted—

(a) the Housing Corporation, or (b) a registered housing association, or (c) an approved co-operative housing association not falling within paragraph (b) above, or (d) an unregistered self-build society

;

and for the words " by that association or society " there shall be substituted the words " by that body ".

• (2) In consequence of the amendments made by subsection (1) above, subsection (2) of the said section 26 (cases where tax liability was deferred) and, in subsection (3) of that section, the words " or subsection (2) " shall be omitted.

• (3) This section has effect with respect to deemed disposals on or after 13th March 1984.

Deduction of tax from consideration for disposals by non residents

121

• (1) Section 40 of the Development Land Tax Act 1976 (deduction on account of tax from consideration for disposals by non-residents) shall be amended in accordance with this section.

• (2) In subsection (1) the words " which, at that time, is development land " shall be omitted.

• (3) In subsection (2) (no deduction where consideration does not exceed £50,000) for " £50,000 " there shall be substituted " £75,000 or such other limit as may be specified by regulations under subsection (7) below ".

• (4) In subsection (3) (the amount of the deduction) for the words " one half " there shall be substituted the words " subject to any provision made by regulations under subsection (7) below, two fifths ".

• (5) In subsection (7) (regulations of the Board) in paragraph (b) after the word " vary " there shall be inserted the words " the limit in subsection (2) above or " and after the word " section " there shall be inserted the words " either generally or ".

• (6) Subsection (8) (meaning of " development land") shall be omitted.

• (7) Except in so far as relates to the making of regulations—

• (a) subsection (3) above has effect in relation to any disposal on or after 1st April 1984 ; and

• (b) the other provisions of this section have effect in relation to any disposal on or after 6th August 1984.

Operations relating to telecommunications

122

In section 47 of the Development Land Tax Act 1976 (interpretation) in subsection (1A) (which was inserted by section 14 of the Finance (No. 2) Act 1983 and provides that " developmedoes not include certain operations relating to telecommunications which are begun on or before 31st December 1984) the words " are begun on or before 31st December 1984 and " shall be omitted.nt "

Payment by instalments and postponement

123

• (1) For the purpose of extending the period during which development land tax may, in certain cases, be paid by instalments from eight to ten years and of restricting those instalments to annual instalments, the following amendments shall be made in Schedule 8 to the Development Land Tax Act 1976—

• (a) the word " ten" shall be substituted for the word " eight " , in each of paragraphs 45(5) and (7)(b) and 50(1) and (4), and for the words from " eight" onwards in paragraph 45(2)(b);

• (b) in paragraph 45(3)(c), for the word " nine " there shall be substituted the word " eleven " ; and

• (c) in paragraph 44(1) for the words from " instalments " onwards there shall be inserted the words " yearly instalments ".

• (2) In section 114(6)(b) of the Finance Act 1980 (application of paragraph 45 of Schedule 8 to the Act of 1976 in relation to advance assessment of tax on deemed disposals), for the words from " nine years " onwards there shall be substituted the words " ' eleven years ' there were substituted the words ' ten years' ".

• (3) In paragraph 52 of Schedule 8 to the Act of 1976 (postponement of tax on incorporation disposal), in sub-paragraphs (4) and (6) for the word " eight" there shall be substituted the word " ten ".

• (4) In section 86A of the Taxes Management Act 1970 (interest on development land tax unpaid on reckonable date)—

• (a) in subsection (1), for the words " and (3)" there shall be substituted the words " (3) and (3A) "; and

• (b) after subsection (3) there shall be inserted the following subsection—

(3A) Subsection (1) above shall have effect, in relation to any tax postponed under paragraph 52 of Schedule 8 to the Act of 1976 (postponement on incorporation disposal) as if the reference to the reckonable date were a reference to the date determined in accordance with sub-paragraphs (4) to (6) of paragraph 52.

• (5) This section has effect in relation to disposals made, and events occurring, on or after 6th August 1983 ; but where, in relation to any such disposal made, or event occurring, before the commencement of this section a person has duly elected to pay development land tax by half-yearly instalments he shall be entitled to continue to pay by such instalments and the Act of 1976 shall have effect accordingly.

Miscellaneous

Recovery of certain tax assessed on non-residents

124

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

Local loans

125

• (1) For section 4 of the National Loans Act 1968 (power to make local loans) there shall be substituted the following section—

(4) (1) The aggregate of— (a) any commitments of the Loan Commissioners outstanding in respect of undertakings entered into by them to grant local loans; and (b) any amount outstanding in respect of the principal of any local loans; shall not at any time exceed £28,000 million or such other (lower or higher) sum, not exceeding £35,000 million, as the Treasury may from time to time specify by order made by statutory instrument. (2) No order shall be made under this section unless a draft of it has been laid before and approved by a resolution of the Commons House of Parliament.

• (2) In section 3 of that Act—

• (a) in subsection (5), the words from “and" to “future Act" shall be omitted; and

• (b) in subsection (11), for the words from the beginning to “those" there shall be substituted the words “ Subject to the limit in this Act, the Loan Commissioners may make loans of the descriptions ”.

Tax exemptions in relation to designated international organisations

126

• (1) Where—

• (a) the United Kingdom or any of the European Union is a member of an international organisation; and

• (b) the agreement under which it became a member provides for exemption from tax, in relation to the organisation, of the kind for which provision is made by this section; the Treasury may, by order made by statutory instrument, designate that organisation for the purposes of this section.

• (2) Where an organisation has been so designated, the provisions mentioned in subsection (3) below shall, with the exception of any which may be excluded by the designation order, apply in relation to that organisation.

• (3) The provisions are—

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

• (b) any security issued by the organisation shall be taken, for the purposes of capital transfer tax . . ., to be situated outside the United Kingdom; and

• (c) no stamp duty shall be chargeable under Schedule 15 to the Finance Act 1999 (bearer instruments)in Schedule 1 to the Stamp Act 1891 ... on the transfer of the stock constituted by, or transferable by means of, any instrument issued by the organisation.

• (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) The Treasury may, by order made by statutory instrument, designate any of the European Union or the European Investment Bank for the purposes of this section, and references in subsections (2) and (3) above to an organisation designated for the purposes of this section include references to a body so designated by virtue of this subsection.

• (5) Subsection (3) above, as it applies by virtue of subsection (4) above, shall be read as if the words Schedule 15 to the Finance Act 1999 (bearer instruments) were omitted

Special and General Commissioners

127

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

Short title, interpretation, construction and repeals

128

• (1) This Act may be cited as the Finance Act 1984.

• (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) Part II of this Act, 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.

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

• (5) Part V of this Act shall be construed as one with Part I of the Oil Taxation Act 1975 and references in Part V of this Act to the principal Act are references to that Act.

• (6) The enactments specified in Schedule 23 to this Act are hereby repealed to the extent specified in the third column of that Schedule, but subject to any provision at the end of any Part of that Schedule.

SCHEDULE 1

Interpretation

1

• (1) Subject to sub-paragraph (3) below, for the purposes of this Act, wine or made-wine which is for the time being in a closed container is sparkling if, due to the presence of carbon dioxide or any other gas, the pressure in the container, measured at a temperature of 20° C, is not less than 1 bar in excess of atmospheric pressure.

• (2) For the purposes of this Act, wine or made-wine which is not for the time being in a closed container is sparkling if it has characteristics similar to those of wine or made-wine which has been removed from a closed container and which, before removal, fell within sub-paragraph (1) above.

• (3) Notwithstanding anything in sub-paragraph (1) above, wine or made-wine which is for the time being in a closed container shall not be regarded as sparkling for the purposes of the rates of duty set out above, if—

• (a) the container does not have a mushroom-shaped stopper (whether solid or hollow) held in place by a tie or fastening; and

• (b) the pressure in the container, measured at a temperature of 20° C, is less than 3 bars in excess of atmospheric pressure.

2

For the purposes of this Act, wine or made-wine shall be regarded as having been rendered sparkling if—

• (a) as a result of aeration, fermentation or any other process, it either falls within paragarph 1(1) above or takes on such characteristics as are referred to in paragraph 1(2) above; or

• (b) being sparkling wine or made-wine which, by virtue only of 1(3) above, was not chargeable to duty as sparkling wine or made-wine, it is transferred into a closed container which has a mushroom-shaped stopper (whether solid or hollow) held in place by a tie or fastening.

SCHEDULE 2

Part I

1

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

2

The following are the provisions substituted in the Act of 1971 and the Act of 1972 for Part II of Schedule 2—

Description of vehicle	Rate of duty
	£
Hackney carriages	45.00
	with an additional 90p for each person above 20 (excluding the driver) for which the vehicle has seating capacity.

3

The following are the provisions substituted in the Act of 1971 and the Act of 1972 for Part II of Schedule 3—

Weight unladen of vehicle	Weight unladen of vehicle	Rate of duty	Rate of duty	Rate of duty
1.	2.	3.	4.	5.
Description of vehicle	Exceeding	Not exceeding	Initial	Additional for each ton or part of a ton in excess of the weight in column 2
			£	£
1. Agricultural machines; digging machines; mobile cranes; works trucks; mowing machines; fishermen's tractors.	—	—	15.00	—
2. Haulage vehicles, being showmen's vehicles.	—	7 1/4 tons	144.00	—
2. Haulage vehicles, being showmen's vehicles.	7 1/4 tons	8 tons	172.00	—
2. Haulage vehicles, being showmen's vehicles.	8 tons	10 tons	203.00	—
2. Haulage vehicles, being showmen's vehicles.	10 tons	—	203.00	31.00
3. Haulage vehicles, not being showmen's vehicles.	—	2 tons	171.00
3. Haulage vehicles, not being showmen's vehicles.	2 tons	4 tons	308.00	—
3. Haulage vehicles, not being showmen's vehicles.	4 tons	6 tons	445.00	—
3. Haulage vehicles, not being showmen's vehicles.	6 tons	7 1/4 tons	581.00	—
3. Haulage vehicles, not being showmen's vehicles.	7 1/4 tons	8 tons	710.00	—
3. Haulage vehicles, not being showmen's vehicles.	8 tons	9 tons	831.00	—
3. Haulage vehicles, not being showmen's vehicles.	9 tons	10 tons	951.00	—
3. Haulage vehicles, not being showmen's vehicles.	10 tons	11 tons	1,088.00	—
3. Haulage vehicles, not being showmen's vehicles.	11 tons	—	1,088.00	136.00

4

The following are the provisions substituted in the Act of 1971 and the Act of 1972 for Part II of Schedule 4—

Plated gross weight of vehicle	Plated gross weight of vehicle	Rate of duty	Rate of duty	Rate of duty
1.	2.	3.	4.	5.
Exceeding	Not exceeding	Two axle vehicle	Three axle vehicle	Four or more axle vehicle
tonnes	tonnes	£	£	£
12	13	410	320	320
13	14	530	340	340
14	15	640	340	340
15	17	850	340	340
17	19	—	460	340
19	21	—	610	340
21	23	—	780	490
23	25	—	1,250	690
25	27	—	—	930
27	29	—	—	1,200
29	30.49	—	—	2,100
Plated gross weight of vehicle	Plated gross weight of vehicle	Rate of duty	Rate of duty	Rate of duty
---	---	---	---	---
1.	2.	3.	4.	5.
Exceeding	Not exceeding	Two axle vehicle	Three axle vehicle	Four or more axle vehicle
tonnes	tonnes	£	£	£
12	13	140	125	125
13	14	150	125	125
14	15	155	125	125
15	17	195	135	125
17	19	—	145	125
19	21	—	160	135
21	23	—	170	145
23	25	—	230	160
25	27	—	—	190
27	29	—	—	225
29	30.49	—	—	360
Plated gross weight of vehicle	Plated gross weight of vehicle	Rate of duty	Rate of duty	Rate of duty
---	---	---	---	---
1.	2.	3.	4.	5.
Exceeding	Not exceeding	Two axle vehicle	Three axle vehicle	Four or more axle vehicle
tonnes	tonnes	£	£	£
12	13	140	125	125
13	14	150	125	125
14	15	155	125	125
15	17	195	135	125
17	19	—	145	130
19	21	—	170	145
21	23	—	185	170
23	25	—	270	190
25	27	—	—	230
27	29	—	—	280
29	30.49	—	—	455
Gross weight of trailer	Gross weight of trailer	Duty supplement
---	---	---
Exceeding	Not exceeding	Duty supplement
tonnes	tonnes	£
4	8	75
8	10	95
10	12	120
12	14	170
14	—	330
Gross weight of trailer	Gross weight of trailer	Duty supplement
---	---	---
Exceeding	Not exceeding	Duty supplement
tonnes	tonnes	£
4	8	75
8	10	95
10	12	120
12	14	170
14	—	330
Gross weight of trailer	Gross weight of trailer	Duty supplement
---	---	---
Exceeding	Not exceeding	Duty supplement
		tonnes
—	—	75
Plated train weight of tractor unit	Plated train weight of tractor unit	Rate of duty	Rate of duty	Rate of duty
---	---	---	---	---
1.	2.	3.	4.	5.
Exceeding	Not exceeding	For a tractor unit to be used with semi-trailers with any number of axles	For a tractor unit to be used only with semi-trailers with not less than two axles	For a tractor unit to be used only with semi-trailers with not less than three axles
tonnes	tonnes	£	£	£
12	14	470	420	420
14	16	590	440	440
16	18	690	440	440
18	20	810	440	440
20	22	940	550	440
22	23	1,000	620	440
23	25	1,150	780	440
25	26	1,150	870	530
26	28	1,150	1,090	720
28	29	1,210	1,210	820
29	31	1,680	1,680	1,050
31	33	2.450	2,450	1,680
33	34	2,450	2,450	2,250
34	36	2,750	2,750	2,750
36	38	3,100	3,100	3,100
Plated train weight of tractor unit	Plated train weight of tractor unit	Rate of duty	Rate of duty	Rate of duty
---	---	---	---	---
1.	2.	3.	4.	5.
Exceeding	Not exceeding	For a tractor unit to be used with semi-trailers with any number of axles	For a tractor unit to be used only with semi-trailers with not less than two axles	For a tractor unit to be used only with semi-trailers with not less than three axles
tonnes	tonnes	£	£	£
12	14	145	140	140
14	16	160	140	140
16	18	170	140	140
18	20	175	140	140
20	22	185	145	140
22	23	190	155	140
23	25	210	165	145
25	26	210	170	155
26	28	210	190	175
28	29	210	205	185
29	31	280	280	220
31	33	395	395	320
33	34	750	750	750
34	36	905	905	905
36	38	1,020	1,020	1,020
Plated train weight of tractor unit	Plated train weight of tractor unit	Rate of duty	Rate of duty	Rate of duty
---	---	---	---	---
1.	2.	3.	4.	5.
Exceeding	Not exceeding	For a tractor unit to be used with semi-trailers with any number of axles	For a tractor unit to be used only with semi-trailers with not less than two axles	For a tractor unit to be used only with semi-trailers with not less than three axles
tonnes	tonnes	£	£	£
12	14	145	140	140
14	16	160	140	140
16	18	170	140	140
18	20	180	155	155
20	22	205	165	165
22	23	220	170	170
23	25	250	190	175
25	26	250	205	185
26	28	250	240	215
28	29	260	260	230
29	31	355	355	275
31	33	495	495	405
33	34	925	925	925
34	36	1,125	1,125	1,125
36	38	1,265	1,265	1,265
Plated train weight of tractor unit	Plated train weight of tractor unit	Rate of duty	Rate of duty	Rate of duty
---	---	---	---	---
1.	2.	3.	4.	5.
Exceeding	Not exceeding	For a tractor unit to be used with semi-trailers with any number of axles	For a tractor unit to be used only with semi-trailers with not less than two axles	For a tractor unit to be used only with semi-trailers with not less than three axles
tonnes	tonnes	£	£	£
12	14	420	420	420
54	20	440	440	440
20	22	550	440	440
22	23	620	440	440
23	25	780	440	440
25	26	870	440	440
26	28	1,090	440	440
28	29	1,210	520	440
29	31	1.680	640	440
31	33	2,450	970	440
33	34	2,450	1,420	550
34	36	2,450	2,030	830
36	38	2,730	2,730	1,240
Plated train weight of tractor unit	Plated train weight of tractor unit	Rate of duty	Rate of duty	Rate of duty
---	---	---	---	---
1.	2.	3.	4.	5.
Exceeding	Not exceeding	For a tractor unit to be used with semi-trailers with any number of axles	For a tractor unit to be used only with semi-trailers with not less than two axles	For a tractor unit to be used only with semi-trailers with not less than three axles
tonnes	tonnes	£	£	£
12	20	140	140	140
20	22	145	140	140
22	23	150	140	140
23	25	165	140	140
25	26	170	145	140
26	23	190	170	155
28	29	205	180	165
29	31	280	215	195
31	33	395	315	230
33	34	470	470	285
34	36	670	670	430
36	38	900	900	650
Plated train weight of tractor unit	Plated train weight of tractor unit	Rate of duty	Rate of duty	Rate of duty
---	---	---	---	---
1.	2.	3.	4.	5.
Exceeding	Not exceeding	For a tractor unit to be used with semi-trailers with any number of axles	For a tractor unit to be used only with semi-trailers with not less than two axles	For a tractor unit to be used only with semi-trailers with not less than three axles
tonnes	tonnes	£	£	£
12	18	140	140	140
18	20	145	145	140
20	22	165	160	140
22	23	170	165	140
23	25	190	170	155
25	26	205	180	165
26	28	240	210	180
28	29	260	225	200
29	31	355	270	240
31	33	495	395	290
33	34	580	580	355
34	36	830	830	540
36	38	1,115	1,115	805

5

The following are the provisions substituted in the Act of 1971 and the Act of 1972 for Part II of Schedule 5—

Description of vehicle	Rate of duty
	£
1. Any vehicle first registered under the Roads Act 1920 before 1st January 1947, or which, if its first registration for taxation purposes had been effected in Northern Ireland, would have been so first registered under the Act as in force in Northern Ireland	60.00
2. Other vehicles	90.00

Part II — Amendment of Part I of Schedule 4 to the Vehicles (Excise) Act 1971 and the Vehicles (Excise) Act (Northern Ireland) 1972

Amendments made in both Acts

6

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

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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

SCHEDULE 3

Part I — Special Licences and Staggered Starting Dates for Whole-Year Licences in Respect of Premises

1

The Betting and Gaming Duties Act 1981 shall be amended as follows.

2

For section 21 there shall be substituted—

(21) (1) Except in the cases specified in Part I of Schedule 4 to this Act, no gaming machine (other than a two-penny machine) shall be provided for gaming on any premises situated in Great Britain unless there is for the time being in force— (a) a licence granted under this Part of this Act with respect to the premises; or (b) a licence so granted with respect to the machine. (2) A licence of either kind granted under this Part of this Act shall be known as a gaming machine licence; and in this Part “ordinary licence” means a licence falling within subsection (1)(a) above and “special licence” means one falling within subsection (1)(b). (3) A special licence may be a whole-year or half-year licence and an ordinary licence may be a whole-year, half-year or quarter-year licence; and the period for which a gaming machine licence is to be granted shall be determined by reference to the following Table.

Type of licence	Period for which licence is to be granted
1. Whole-year special licence	Twelve months beginning with 1st October.
2. Half-year special licence	Six months beginning with 1st April or 1st October.
3. Whole-year ordinary licence in respect of premises situation in—
(a) The first region	Twelve months beginning with 1st December.
(b) The second region	Twelve months beginning with 1st February.
(c) The third region	Twelve months beginning with 1st June.
(d) The fourth region	Twelve months beginning with 1st August.
4. Half-year ordinary licence	Six months beginning with 1st April or 1st October.
5. Quarter-year ordinary licence	Three months beginning with 1st January, 1st April, 1st July or 1st October.

In this Table any reference to a named region is a reference to that part of Great Britain which has been designated by the Commissioners, for the purposes of this Act, as that named region.

(4) For the purposes of this Part of this Act, any premises which consist of a means of transport shall be treated as being situated in the fourth region except in any case where the Commissioners direct that they are to be treated as being situated in another named region.

.

3

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4

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5

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

6

In section 24—

• (a) subsection (1) shall cease to have effect;

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

• (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (e) in subsections (5) and (6), in each case after the words “contravention of" there shall be inserted “ section 21(1) above or ”; and

• (f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7

• (1) Part II of Schedule 4 shall be amended as follows.

• (2) In paragraphs 6 and 8(2), the words “in respect of any premises" shall, in each case, be omitted.

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

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

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

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

• (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (8) In sub-paragraph (3) of paragraph 11 for the words “Sub-paragraph (2)" there shall be substituted “ Sub-paragraph (1) ” and for the words “that section" there shall be substituted the words “ section 21(1) or 24 of this Act ”.

• (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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

• (12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (13) In paragraph 18, for the words from “either" to the end of paragraph (b) there shall be substituted “the officer is satisfied, having regard to the number and description of—

• (a) those machines which are authorised by the ordinary licence or licences produced to him; and

• (b) those machines displaying special licences;

that there has been a contravention of section 21(1) or 24 of this Act,".

Part II — Transitional Provisions

Whole-year licences during transitional period

8

• (1) A whole-year ordinary licence in respect of any premises shall, if first having effect after 30th September 1984 but before the latest date specified (in relation to the region in which the premises are situated) in the second column of the following Table, be granted for a period determined by reference to the Table.

Region in which premises are situated	Date on which licence first has effect	Period for which licence is to be granted
1. First.	(a) Before 1st May 1985.	Seven months beginning with 1st October 1984.
	(b) After 30th April 1985 but before 1st December 1985.	Seven months beginning with 1st May 1985.
2. Second.	(a) Before 1st June 1985.	Eight months beginning with 1st October 1984.
	(b) After 31st May 1985 but before 1st February 1986.	Eight months beginning with 1st June 1985.
3. Third.	Before 1st June 1985.	Eight months beginning with 1st October 1984.
4. Fourth.	Before 1st August 1985.	Ten months beginning with 1st October 1984.

References in this Table to named regions shall be construed as in section 21 of the Betting and Gaming Duties Act 1981.

• (2) Where, by virtue of sub-paragraph (1) above, a whole-year licence is granted for a period of 7, 8 or 10 months, the duty payable on the licence shall be 7/12ths, 8/12ths or, as the case may be, 10/12ths of the appropriate amount set out in the relevant Table in section 23 of the Act of 1981.

• (3) In relation to a whole-year licence falling within sub-paragraph (1) above, paragraph 11 of Schedule 4 to the Act of 1981 shall have effect as if—

• (a) in a case falling within paragraph 11(1)(b), the appropriate fraction were 17/35ths for a seven-month licence, 11/20ths for an eight-month licence and 16/25ths for a ten-month licence;

• (b) in a case falling within paragraph 11(1)(c), the appropriate fraction were 2/35ths for a seven-month licence, 7/40ths for an eight-month licence and 17/50ths for a ten-month licence; and

• (c) in a case falling within paragraph 11(1)(d), no provision were made for repayment of duty.

Schedule 4

Part I — Provisions Inserted in Customs and Excise Management Act 1979 as Part VIIIA

Part II — Further Amendments of 1979 Act

1

In section 1 (interpretation) the following definitions shall be inserted at the appropriate places—

“designation order” has the meaning given by section 100A(5); “free zone” has the meaning given by section 100A(2); “free zone goods” has the meaning given by section 100B(2); “free zone regulations” has the meaning given by section 100B(1);.

2

In section 31(1) (power to make regulations controlling the movement of goods)—

• (a) in paragraph (a) after the words “clearance out of charge of such goods" there shall be inserted the words “ , a free zone ”; and

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

(aa) the movement of goods between— (i) a free zone and a place approved by the Commissioners for the clearance out of charge of such goods, (ii) such a place and a free zone, and (iii) a free zone and another free zone;

.

3

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4

In section 119(1) (delivery of imported goods on giving of security for duty) after “warehouse" there shall be inserted the words “ or free zone ”.

5

In section 159 (power to examine and take account goods), in subsection (1) there shall be inserted after paragraph (b)—

(bb) which are in a free zone; or

.

6

In section 164 (power to search persons) in subsection (4) there shall be inserted after paragraph (e)—

(ee) any person in, entering or leaving a free zone;

.

Schedule 5

1

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

2

The following sections shall be inserted after section 37—

(37A) (1) Without prejudice to section 37 above, a direction under that section may— (a) provide that where the importer is authorised for the purposes of this section, the entry may consist of an initial entry and a supplementary entry; and (b) may make such supplementary provision in connection with entries consisting of initial and supplementary entries as the Commissioners think fit. (2) Where an initial entry of goods has been accepted the goods may, on the importer giving security by deposit of money or otherwise to the satisfaction of the Commissioners for payment of the unpaid duty, be delivered without payment of any duty chargeable in respect of the goods, but any such duty shall be paid within such time as the Commissioners may direct. (3) An importer who makes an initial entry shall complete the entry by delivering the supplementary entry within such time as the Commissioners may direct. (4) For the purposes of the customs and excise Acts an entry of goods shall be taken to have been delivered when an initial entry of the goods has been delivered, and accepted when an initial entry has been accepted. (37B) the goods may be delivered before an entry of them has been delivered or any duty chargeable in respect of them has been paid. (1) The Commissioners may, if they think fit, direct that where— (a) such goods as may be specified in the direction are imported by an importer authorised for the purposes of this subsection; (b) the importer has delivered a document relating to the goods to the proper officer, in such form and manner, containing such particulars and accompanied by such documents as the Commissioners may direct; and (c) the document has been accepted by the proper officer. the goods may be delivered before an entry of them has been delivered or any duty chargeable in respect of them has been paid. (2) The Commissioners may, if they think fit, direct that where— (a) such goods as may be specified in the direction are imported by an importer authorised for the purposes of this subsection; (b) the goods have been removed from the place of importation to a place approved by the Commissioners for the clearance out of charge of such goods; and (c) the conditions mentioned in subsection (3) below have been satisfied, (3) The conditions are that— (a) on the arrival of the goods at the approved place the importer delivers to the proper officer a notice of the arrival of the goods in such form and containing such particulars as may be required by the directions; (b) within such time as may be so required the importer enters such particulars of the goods and such other information as may be so required in a record maintained by him at such place as the proper officer may require; and (c) the goods are kept secure in the approved place for such period as may be required by the directions. (4) The Commissioners may direct that the condition mentioned in subsection (3)(a) above shall not apply in relation to any goods specified in the direction and such a direction may substitute another condition. (5) No goods shall be delivered under this section unless the importer gives security by deposit of money or otherwise to the satisfaction of the Commissioners for the payment of any duty chargeable in respect of the goods which is unpaid. (6) Where goods of which no entry has been made have been delivered under this section, the importer shall deliver an entry of the goods under section 37(1) above within such time as the Commissioners may direct. (7) For the purposes of section 43(2)(a) below such an entry shall be taken to have been accepted— (a) in the case of goods delivered by virtue of a direction under subsection (1) above, on the date on which the document mentioned in that subsection was accepted; and (b) in the case of goods delivered by virtue of a direction under subsection (2) above, on the date on which particulars of the goods were entered as mentioned in subsection (3)(b) above. (37C) (1) The Commissioners may, if they think fit— (a) authorise any importer for the purposes of section 37A, or 37B(1) or (2) above; and (b) suspend or cancel the authorisation of any importer where it appears to them that he has failed to comply with any requirement imposed on him by or under this Part of this Act or that there is other reasonable cause for suspension or cancellation. (2) The Commissioners may give directions— (a) imposing such requirements as they think fit on any importer authorised under this section; or (b) varying any such requirements previously imposed. (3) If any person without reasonable excuse contravenes any requirement imposed by or under section 37A, 37B or this section he shall be liable on summary conviction to a penalty of level 4 on the standard scale.

3

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Schedule 6

Part I — Food

1

In Group 1 (Food), in Note (3) (which provides that a supply in the course of catering includes a supply for consumption on the premises) after the word “includes" there shall be inserted “(a)" and at the end of the Note there shall be added

and (b) any supply of hot food for consumption off those premises; and for the purpose of paragraph (b) above “hot food" means food which, or any part of which,— (i) has been heated for the purpose of enabling it to be consumed at a temperature above the ambient air temperature; and (ii) is at the time of the supply above that temperature.

Part II

2

3

In item 2 (supply of services in the course of certain operations relating to buildings and civil engineering works), for paragraphs (a) and (b) there shall be substituted the words " in the course of the construction or demolition of ".

4

In item 3 (supply, by a person supplying services within item 2 and in connection with those services, of certain materials etc. and services relating to them) after the words " item 2 " there shall be inserted the words " of this Group or of Group 8A below ".

5

After Note (1) there shall be inserted the following Note:—

(1A) Any reference in item 2 or the following Notes to the construction of any building or the construction of any civil engineering work does not include a reference to the conversion, reconstruction, alteration or enlargement of any existing building or civil engineering work, and the reference in item 1 to a person constructing a building shall be construed accordingly.

6

• (1) In Note (2) (matters excluded from item 2), for paragraph (a) (which excluded repair or maintenance and is rendered unnecessary by the removal from item 2 of the reference to alteration) there shall be substituted the following paragraph:—

(a) the supply of any services in the course of the construction of any building ("the secondary building") within the grounds or garden of another building ("the main building ") which is used or to be used wholly or mainly as a private residence except— (i) where the secondary building is itself to be so used; or (ii) where the secondary building is a garage which is to be used and occupied together with another building which is being constructed at the same time as the secondary building and which is either the main building or another secondary building which is to be used wholly or mainly as a private residence.

• (2) In that Note—

• (a) in paragraph (b), the words " or alteration ", and

• (b) paragraph (c) (supply of services otherwise than in the course or furtherance of a business),

shall be omitted.

7

After Note (2) there shall be inserted the following Note:—

(2A) In item 3, the goods referred to in paragraph (a) do not include— (a) finished or prefabricated furniture, other than furniture designed to be fitted in kitchens; or (b) materials for the construction of fitted furniture, other than kitchen furniture; or (c) domestic electrical or gas appliances, other than those designed to provide space heating or water heating or both.

Part III — Protected Buildings

8

After Group 8 there shall be inserted the following—

Item No. (1) The granting by a person substantially reconstructing a protected building, of a major interest in, or in any part of, the building or its site. (2) The supply, in the course of an approved alteration of a protected building, of any services other than services of an arcitect, surveyor or any person acting as consultant or in a supervisory capacity. Notes (1) “Protected building” means a building which is— (a) a listed building, within the meaning of— (i) the Town and Country Planning Act 1971; or (ii) the Town and Country Planning (Scotland) Act 1972; or (iii) the Planning (Northern Ireland) Order 1972 or (b) a scheduled monument, within the meaning of— (i) the Ancient Monuments and Arcaelogical Areas Act 1979; or (ii) the Historic Monuments Act (Northern Ireland) 1971. (2) For the purposes of item 1, a protected building shall not be regarded as substantially reconstructed unless the reconstruction is such that at least one of the following conditions is fulfilled when the reconstruction is completed— (a) that, of the works carried out to effect the reconstruction, at least three-quarters, measured by reference to cost, are of such a nature that the supply of services (other than excluded services) materials and other items to carry out the works, would, if supplied by a taxable person, be within either item 2 of this Group or item 3 of Group 8 above, as it applies to a supply by a person supplying services within item 2 of this Group; and (b) that the reconstructed building incorporates no more of the original building (that is to say, the building as it was before the reconstruction began) than the external walls, together with other external features of architectural or historic interest; and, in paragraph (a) above “excluded services” means the services of an architect, surveyor or other person acting as consultant or in a supervisory capacity. (3) “Approved alteration” means,— (a) in the case of a protected building which is an ecclesiastical building which is for the time being used for ecclesiastical purposes or would be so used but for the works in question, any works of alteration; and (b) in the case of a protected building which is a scheduled monument within the meaning of the Historic Monuments Act (Northern Ireland) 1971 and in respect of which a protection order, within the meaning of that Act, is in force, works of alteration for which consent has been given under section 10 of that Act; and (c) in any other case, works of alteration which may not, or but for the existence of a Crown interest or Duchy interest could not, be carried out unless authorised under, or under any provision of,— (i) Part IV of the Town and Country Planning Act 1971, (ii) Part IV of the Town and Country Planning (Scotland) Act 1972, (iii) Part V of the Planning (Northern Ireland) Order 1972, or (iv) Part I of the Ancient Monuments and Archaelogical Areas Act 1979, and for which, except in the case of a Crown interest or Duchy interest, consent has been obtained under any provision of that Part; and in paragraph (c) above “Crown interest" and “Duchy interest" have the same meaning as in section 50 of the said Act of 1979. (4) For the purposes of paragraph (a) of Note (3), a building used or available for use by a minister of religion wholly or mainly as a residence from which to perform the duties of his office shall be treated as not being an ecclesiastical building. (5) Where the benefit of the consideration for the grant of a major interest as described in item 1 accrues to the person substantially reconstructing the protected building but that person is not the grantor, he shall be treated for the purposes of that item as the person making the grant. (6) In item 2 “alteration" does not include repair or maintenance; and where any work consists partly of an approved alteration and partly of other work, an apportionment shall be made to determine the supply which falls within item 2. (7) Note (2) to Group above applies in relation to item 2 of this Group as it applies in relation to item 2 of that Group.

Schedules 7—9

1

In subsection (1) of section 32 of the Finance Act 1971, for the words following paragraph (b) there shall be substituted the words " and, in relation to any year of assessment, any reference in the Income Tax Acts to the additional rate is a reference to a rate determined by subtracting the basic rate for that year from the rate of tax which, for that year, is applicable to the second higher rate band ".

2

• (1) In the definition of " excess liability" or, as the case may be, "excess amount" wherever it appears in the enactments specified in sub-paragraph (2) below, the words " or additional" shall be omitted.

• (2) The enactments referred to in sub-paragraph (1) above are the following, namely—

• (a) sections 30(3), 36(1), 403(1), 424(c), 430(1), 457(1) and 458(1) of the Taxes Act;

• (b) section 87(6) of and paragraph 5(6A) of Schedule 16 to the Finance Act 1972 ; and

• (c) paragraph 19(1A) of Schedule 2 to the Finance Act 1975.

3

• (1) In the Taxes Act, in section 38(2), the words from " and in determining " to " investment income " shall be omitted.

• (2) In the Finance Act 1971, sections 32(3) and (4) and 34(4) and, in paragraph 2(2) of Schedule 7, the words "or additional" shall be omitted.

• (3) In the Finance Act 1973, in section 44, the words " or additional " and, in section 59(2), the words from " the additional rate " to " them, and " shall be omitted.

• (4) In the Finance Act 1974, there shall be omitted—

• (a) section 15;

• (b) in section 16(1), the words following " subsection (2) below";

• (c) in section 43(1), the words from " In this subsection" onwards ; and

• (d) in Schedule 7, paragraph 1 and, in paragraph 9(5), the words from " and " onwards.

• (5) In section 24(3) of the Finance Act 1980, for the word " amounts" there shall be substituted the word " amount " ; and the words from "or over which" to "additional rate", the word "respectively", where it first occurs, and the words "and the investment income threshold " shall be omitted.

SCHEDULE 8

General

1

• (1) In this Schedule "the principal section" means section 27 of this Act

• (2) Any amount which is credited as interest in respect of a relevant deposit shall, for the purposes of the principal section and (his Schedule, be treated as a payment of interest

Meaning of " deposit-taker "

2

• (1) In the principal section and in this Schedule "deposit-taker " means any of the following—

• (a) the Bank of England ;

• (b) any recognised bank, licensed institution or municipal bank (within die meaning of the Banking Act 1979);

• (c) the Post Office;

• (d) any trustee savings bank within the meaning of the Trustee Savings Banks Act 1981 ;

• (e) any bank formed under the Savings Bank (Scotland) Act 1819; and

• (f) any person or class of person which receives deposits in the course of his business or activities and which is for the time being prescribed by order made by the Treasury by statutory instrument for the purposes of this section.

• (2) Where the Treasury makes an order under sub-paragraph (1)(f) above, the order shall have effect from the beginning of the first year of assessment which begins after the date on which the order is made.

• (3) An order under sub-paragraph (1)(f) above shall be subject to annulment in pursuance of a resolution of the Commons House of Parliament.

Meaning of " deposit" and " relevant deposit"

3

• (1) In the principal section and in this Schedule " deposit" means a sum of money paid on terms under which it will be repaid with or without interest and either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the person to whom it is made.

• (2) For the purposes of the principal section and this Schedule, a deposit is a " relevant deposit" if, but only if—

• (a) the person who is beneficially entitled to any interest in respect of the deposit is an individual or, where two or more persons are so entitled, all of them are individuals ; or

• (b) the person entitled to any such interest receives it as a personal representative in his capacity as such ;

and the deposit is not prevented from being a relevant deposit by sub-paragraph (3) below.

• (3) A deposit is not a relevant deposit if—

• (a) a qualifying certificate of deposit has been issued in respect of it or it is a qualifying time deposit;

• (b) it is a debt on a debenture (" debenture " having the meaning given in section 455 of the Companies Act 1948) issued by the deposit-taker ;

• (c) it is a loan made by a deposit-taker in the ordinary course of his business or activities ;

• (d) it is a debt on a security which is listed on a recognised stock exchange (within the meaning of section 535 of the Taxes Act);

• (e) it is made by a Stock Exchange money broker (recognised by the Bank of England) in the course of his business as such a broker;

• (f) in the case of a deposit-taker resident in the United Kingdom for the purposes of income or corporation tax, it is held at a branch of his situated outside the United Kingdom ;

• (g) in the case of a deposit-taker who is not so resident, it is held otherwise than at a branch of his situated in the United Kingdom ; or

• (h) the appropriate person has declared in writing to the deposit-taker liable to pay interest in respect of the deposit that—

• (i) at the time when the declaration is made, the person who is beneficially entitled to the interest is not, or, as the case may be, all of the persons who are so entitled are not, ordinarily resident in the United Kingdom ;

• (ii) in a case falling within sub-paragraph (2)(b) above, the deceased was, immediately before his death, not ordinarily resident in the United Kingdom.

• (4) A declaration under sub-paragraph (3)(h)(i) shall contain an undertaking by the person making it that if the person, or any of the persons, in respect of whom it is made becomes ordinarily resident in the United Kingdom he will notify the deposit-taker accordingly.

• (5) A deposit-taker shall, on being so required by notice given to him in writing by an inspector, make all declarations which have been made to him under sub-paragraph (3) above available for inspection by the inspector or by a named officer of the Board.

• (6) Where a notice has been given to a deposit-taker under sub-paragraph (5) above, the declarations shall be made available within such time as may be specified in the notice; and the person to whom they are to be made available may take copies of, or extracts from, them.

• (7) A deposit-taker shall treat every deposit made with him as a relevant deposit unless satisfied that it is not a relevant deposit; but where he has satisfied himself that a deposit is not a relevant deposit he shall be entitled to continue to so treat it until such time as he is in possession of information which can reasonably be taken to indicate that the deposit is, or may be, a relevant deposit.

• (8) In sub-paragraph (3) above—

• " appropriate person", in relation to a deposit, means any person who is beneficially entitled to any interest in respect of the deposit or entitled to receive any such interest as a personal representative in his capacity as such or to whom any such interest is payable ;

• " qualifying certificate of deposit" means a certificate of deposit, as denned in section 55(3) of the Finance Act 1968, which is issued by a deposit-taker and under which— the amount payable by the deposit-taker, exclusive of interest, is not less than £50,000 (or, for a deposit denominated in foreign currency, not less than the equivalent of £50,000 at the time when the deposit is made); and the obligation of the deposit-taker to pay that amount arises after a period of not less than 28 days beginning with the date on which the deposit is made ; and

• " qualifying time deposit" means a deposit which is made by way of loan for an amount which is not less than £50,000 (or, for a deposit denominated in foreign currency, not less than the equivalent of £50,000 at the time when the deposit is made) and on terms which— prevent repayment of the deposit before the expiry of the period of 28 days beginning with the date on which the deposit is made, but which require repayment at the end of a specified period ; do not make provision for the transfer of the right to repayment; and prevent partial withdrawals of, or additions to, the deposit.

• (9) For the purposes of sub-paragraph (3)(f) and (g) above, a deposit is held at a branch of a deposit-taker if it is recorded in his books as a liability of that branch.

Assessments to income tax etc.

4

• (1) Where in relation to any payment of interest (the "payment ") a deposit-taker is liable to account for and pay an amount under the principal section—

• (a) subject to sub-paragraph (2) below, no assessment to income tax shall be made on, and no repayment of income tax shall be made to, the person receiving or entitled to the payment in respect of it;

• (b) the payment shall, in computing the total income of the person entitled to it, be treated as income for that year received by him after deduction of income tax at the basic rate from a corresponding gross amount; and

• (c) the payment (and no more) shall, in applying sections 52 and 53 of the Taxes Act to other payments be treated as profits or gains which have been brought into charge to income tax.

• (2) Sub-paragraph (1)(a) above shall not prevent an assessment in respect of income tax at a rate other than the basic rate.

• (3) For the purpose of determining whether any or what amount of tax is, by virtue of sub-paragraph (1)(b) above, to be taken into account as having been deducted from a gross amount in the case of an individual whose total income is reduced by any deductions, so much only of that gross amount shall be taken into account as is part of his total income as so reduced.

Collection

5

• (1) Any payment of interest in respect of which an amount is payable under the principal section shall be a relevant payment for the purposes of Schedule 20 to the Finance Act 1972 (collection of income tax on company payments which are not distributions) whether or not the deposit-taker making the payment is resident in the United Kingdom.

• (2) Schedule 20 to that Act shall apply in relation to any payment which is a relevant payment by virtue of sub-paragraph (1) above—

• (a) with the substitution for any reference to a company of a reference to a deposit-taker ;

• (b) as if any amount payable under the principal section were payable as income tax ;

• (c) as if paragraph 5 (set-off of income tax on deposit-taker's income against liability under the principal section) applied only in relation to payments received by the deposit-taker after 5th April 1985 and falling to be taken into account in computing his income chargeable to corporation tax; and

• (d) as if in paragraph 7 (amounts set-off under paragraph 5 not to be set-off also under section 240(5) of the Taxes Act) the reference to section 240(5) included a reference to sections 53 and 246(3) of that Act.

• (3) In relation to any deposit-taker who is not a company Schedule 20 shall have effect as if—

• (a) paragraph 5 were omitted ; and

• (b) references to accounting periods were references to periods for which the deposit-taker makes up his accounts.

Transitional provisions

6

• (1) Any deposit denominated in a foreign currency shall not be treated, at any time before 6th April 1986, as a relevant deposit.

• (2) A certificate of deposit, as defined in section 55(3) of the Finance Act 1968, which was issued before 13th March 1984 on terms which provide for interest to be payable on the deposit at any time after 5th April 1985 (whether or not interest is payable on it before that date) shall, if it is not a qualifying certificate of deposit, be treated for the purposes of paragraph 3(3) of this Schedule as if it were a qualifying certificate of deposit.

• (3) Any deposit which was made before 6th July 1984 but which is not a qualifying time deposit shall, where it is made on terms which—

• (a) do not make provision for the transfer of the right to repayment;

• (b) prevent partial withdrawals of, or additions to, the deposit; and

• (c) require—

• (i) the deposit-taker to repay the sum at the end of a specified period which ends after 5th April 1985 ; or

• (ii) in a case where interest is payable only at the time of repayment of the deposit, the deposit-taker to repay the sum on demand or on notice ;

be treated, for the purposes of paragraph 3(3) of this Schedule, as if it were a qualifying time deposit.

• (4) A declaration made before 6th July 1984 under section 17(4) of the Taxes Management Act 1970 which contains an undertaking of the kind referred to in sub-paragraph (4) of paragraph 3 of this Schedule shall, at all times before 6th April 1988, be treated as a declaration made for the purposes of that paragraph.

• (5) Where a deposit which is a source of income of any person (the " lender") is not a composite rate deposit but at any time becomes such a deposit, section 121 of the Taxes Act (special rules where source of income ceases) shall apply as if the deposit were a source of income which the lender ceased to possess immediately before it became a composite rate deposit.

• (6) Where a deposit becomes a composite rate deposit on 6th April 1985, section 121 of the Taxes Act shall apply in relation to it with the omission from subsection (1)(b) of the words from " and shall" to " this provision ".

• (7) Where a deposit which is a source of income of any person ceases to be a composite rate deposit, section 120(3) of the Taxes Act shall apply as if the deposit were a new source of income acquired by him immediately after it ceased to be a composite rate deposit.

• (8) For the purposes of sub-paragraphs (5) to (7) above a deposit is at any time a composite rate deposit if, were the person holding it to make a payment of interest in respect of it at that time, he would be liable to account for and pay an amount on that payment under the principal section.

Penalties

7

The Table in section 98 of the Taxes Management Act 1970 (penalties) shall be amended by inserting at the end of the first column—

Paragraph 3(3)(h) and (5) of Schedule 8 to the Finance Act 1984

.

SCHEDULE 9

Charge to tax

1

• (1) On the disposal by any person of any deep discount security—

• (a) an amount which represents the accrued income attributable to the period between his acquisition and disposal of the security (the " period of ownership") shall be treated as income chargeable to tax under Case III or, as may be, Case IV of Schedule D ;

• (b) the tax shall (notwithstanding anything in sections 119 to 121 or, as may be, 122 to 124 of the Taxes Act but subject to sub-paragraph (5) below) be computed on the income so arising from any disposal made in the year of assessment ; and

• (c) in computing the gain accruing on the disposal for the purposes of capital gains tax—

• (i) section 31 of the Capital Gains Tax Act 1979 shall not apply but the consideration for the disposal shall be treated as reduced by the amount mentioned in paragraph (a) above ; and

• (ii) where that amount exceeds the consideration for the disposal, the amount of the excess shall be treated as expenditure within section 32(1)(b) of that Act incurred by him on the security immediately before the disposal.

• (2) The amount which represents the accrued income attributable to any period of ownership is the aggregate of the income elements for each income period or part of an income period in the period of ownership.

• (3) In relation to any security, the income element for any income period shall be determined by applying the formula—

$$(A×B100)−C$ where A is the adjusted issue price ; B is the yield to maturity; and C is the amount of interest (if any) attributable to the income period.$

• (4) The income element for any period (the "short period") falling within an income period shall be determined by applying the formula—

$$PY×I$ where I is the income element for the income period in which the short period falls ; P is the number of days in the short period ; and Y is the number of days in that income period.$

• (5) Where—

• (a) by virtue of sub-paragraph (1) above income tax is chargeable under Case IV of Schedule D, and

• (b) the person making the disposal satisfies the Board, on a claim in that behalf, that he is not domiciled in the United Kingdom, or that, being a British subject or a citizen of the Republic of Ireland, he is not ordinarily resident in the United Kingdom,

the tax shall be computed on the amounts, if any, received in the United Kingdom in the year of assessment in question in respect of the sum mentioned in sub-paragraph (1)(a) above (any such amounts being treated as income arising when they are received in the United Kingdom).

• (6) For the purposes of subsection (5) above—

• (a) there shall be treated as received in the United Kingdom all amounts paid, used or enjoyed in, or in any manner or form transmitted or brought to, the United Kingdom ; and

• (b) subsections (4) to (7) of section 122 of the Taxes Act shall apply as they apply for the purposes of subsection (3) of that section.

• (7) In this Schedule—

• " adjusted issue price ", in relation to any security in a particular income period, is the aggregate of the issue price of the security and the income elements for all previous income periods;

• " income period " means— in the case of a security carrying a right to interest, any period to which a payment of interest which falls to be made in respect of the security is attributable; and in any other case, any year ending immediately before the anniversary of the issue of the security or any period of less than a year which begins on such an anniversary and ends on the redemption date ;

• "yield to maturity", in relation to any security, means a rate (expressed as a percentage) such that if a sum equal to the issue price of the security were to be invested at that rate on the assumption that— the rate would be applied on a compounding basis at the end of each income period ; and the amount of any interest attributable to an income period would be deducted after applying the rate, the value of that sum at the redemption date would be equal to the amount payable on redemption of the security.

• (8) Every company which issues deep discount securities shall cause to be shown on the certificate of each such security the income element for each income period between the date of issue of the security and the redemption date.

• (9) Sections 52 to 54 of the Taxes Act (deduction of income tax by persons making certain payments) and section 159 of that Act (foreign dividends) shall not apply to so much of the proceeds of redemption of a deep discount security as represents income chargeable to tax under Case III or, as may be, Case IV of Schedule D.

Meaning of " disposal"

2

• (1) Subject to sub-paragraph (2) and paragraph 8 below, there is a disposal of a deep discount security for the purposes of this Schedule if there would be such a disposal for the purposes of the Capital Gains Tax Act 1979.

• (2) Notwithstanding anything in section 49(1)(b) of the Act of 1979 (no deemed disposal on death), where the assets of which a deceased person was competent to dispose include any deep discount security that security shall, for the purposes of this Schedule, be deemed to have been disposed of by the deceased immediately before his death.

Deduction of income element from total profits of company and allowance as charge on income

3

• (1) In computing the corporation tax chargeable for any accounting period of a company which has issued any deep discount security, the income element in respect of that security for any income period ending in or with that accounting period shall be allowed as a deduction against the total profits of the company for the accounting period as reduced by any relief other than group relief.

• (2) The income element for any income period ending in or with an accounting period of a company which has issued a deep discount security shall be treated for the purposes of the Corporation Tax Acts, other than those of section 248(1) of the Taxes Act (which makes provision, in relation to charges, similar to that made by sub-paragraph (1) above) as a charge on income paid by the company in the accounting period.

• (3) No income element in respect of any deep discount security shall be so allowed or treated unless—

• (a) the cost of paying so much of the amount payable on redemption as represents the discount is ultimately borne by the company;

• (b) the income element would not otherwise be deductible in computing the issuing company's profits or any description of those profits for purposes of corporation tax ; and

• (c) one or more of the conditions mentioned in sub-paragraph (4) below are satisfied.

• (4) The conditions are that—

• (a) the company exists wholly or mainly for the purpose of carrying on a trade ;

• (b) the deep discount security was issued wholly and exclusively to raise money for purposes of a trade carried on by the company;

• (c) the company is an investment company, as defined by section 304(5) of the Taxes Act.

• (5) Where, on redemption of any deep discount security any part of the amount payable on redemption is, by virtue of section 233(2)(d) of the Taxes Act, a distribution of the company for the purposes of the Corporation Tax Acts, sub-paragraphs (1) and (2) above shall not apply to any income element in respect of that security.

• (6) Without prejudice to its application apart from this paragraph section 38 of the Finance Act 1980 (incidental costs of obtaining loan finance to be deductible in computing profits or gains to be charged under Case I or Case II of Schedule D and to be treated for certain purposes as expenses of management) shall apply in relation to any qualifying security as it applies in relation to loan stock the interest on which is deductible as mentioned in subsection (2) of that section.

• (7) In sub-paragraph (6) above, " qualifying security " means any deep discount security in respect of which the income elements are deductible under sub-paragraph (1) above in computing the total profits of the company by which the incidental costs in question are incurred.

• (8) Sub-paragraphs (6) and (7) above shall have effect in relation to expenditure incurred after 13th March 1984.

• (9) Relief shall not be given under any provision of the Tax Acts in respect of any income element if (at any time) a scheme has been effected or arrangements have been made such that the sole or main benefit that might be expected to accrue to the company from the issue of the security in question is the obtaining of a reduction in tax liability by means of that relief.

• (10) Subsections (2) and (3) of section 38 of the Finance Act 1976 (restriction of relief for payment of interest) shall apply in relation to sub-paragraph (9) above as they apply in relation to subsection (1) of that section.

4

• (1) Section 15 of the Oil Taxation Act 1975 (oil extraction activities etc. ; charges on income) shall apply in relation to income elements in respect of deep discount securities and paragraph 3 above as it applies in relation to interest and section 248 of the Taxes Act (allowance of charges on income).

• (2) In the application of section 15 to any deep discount security, subsection (2)(b) shall have effect as if the references to the rate at which interest was payable were references to the aggregate of the rate of interest payable and the amount of any income element in respect of the security for the period in question.

Securities issued and owned by associated companies or companies belonging to same group

5

• (1) Where a deep discount security issued by a company is at any time beneficially owned by another company which is—

• (a) an associated company (within the meaning of section 302 of the Taxes Act) of the issuing company ; or

• (b) a member of a group of companies of which the issuing company is also a member;

sub-paragraphs (1) and (2) of paragraph 3 of this Schedule shall apply to any linked income element with the addition, after the words " the accounting period ", of the words " in which the security is redeemed ".

• (2) In this paragraph " linked income element" means the income element in respect of the security in question for any income period in which the security is at any time beneficially owned by the other company.

• (3) For the purposes of this paragraph, two companies shall be deemed to be members of a group of companies if one is a 51 per cent subsidiary of the other or both are 51 per cent, subsidiaries of a third company.

Close companies

6

• (1) Where a deep discount security issued by a close company is at any time beneficially owned by—

• (a) a participator in the company ;

• (b) an associate of such a participator ; or

• (c) a company of which such a participator has control,

sub-paragraphs (1) and (2) of paragraph 3 of this Schedule shall apply to any linked income element with the addition, after the words " the accounting period ", of the words " in which the security is redeemed ".

• (2) In sub-paragraph (1) above " linked income element" means the income element in respect of the security in question for any income period in which the security is at any time beneficially owned by a person mentioned in that sub-paragraph.

• (3) Any amount which a close company is allowed, by virtue of paragraph 3(1) of this Schedule, to deduct from its total profits for any accounting period shall be treated for the purposes of paragraph 3A of Schedule 16 to the Finance Act 1972 (apportionment amongst participators of interest paid by close company as if it were income of the company) as if it were interest paid by the company in that period.

• (4) In this paragraph—

• "associate" has the meaning given in section 303(3) of the Taxes Act;

• " control " shall be construed in accordance with section 302(2) to (6) of that Act; and

• " participator " means a person who is, in relation to a company, a participator for the purposes of Chapter III of Part XI of the Taxes Act (by virtue of section 303 of that Act) other than a person who is a participator for those purposes by virtue only of his holding a deep discount security issued by the company.

• (5) In determining whether a person who carries on a business of banking is a participator in a company for the purposes of this paragraph, there shall be disregarded any securities of the company acquired by him in the ordinary course of his business.

Early redemption

7

• (1) Where any deep discount security is redeemed before the redemption date by the company which issued it, the preceding paragraphs shall have effect subject to the provisions of this paragraph.

• (2) The accrued income attributable to the period between the acquisition of the security by the person who, immediately before its redemption, was the beneficial owner of the security and its redemption shall be the amount paid to him on redemption of the security less the issue price of the security or, in a case where he did not acquire it on its issue, less the aggregate of—

• (a) the issue price; and

• (b) the accrued income attributable to the period beginning with the issue, and ending with his acquisition, of the security.

• (3) The deduction allowed under paragraph 3(1) above in relation to the accounting period in which the deep discount security is redeemed shall be the amount paid by the company on redemption less the aggregate of—

• (a) the issue price of the security; and

• (b) the accrued income attributable to the period beginning with the issue of the security and ending with the last income period to end in or with the accounting period of the company which precedes that in which the security is redeemed.

• (4) Where paragraph 5 or 6 above has applied to the deep discount security at any time, the amount mentioned in sub-paragraph (3)(b) above shall not include any linked income element (within the meaning of that paragraph).

• (5) Where the aggregate mentioned in sub-paragraph (3) above exceeds the amount paid by the company on redemption of the security, the amount of the excess or, if it is less, the amount mentioned in paragraph (b) of that sub-paragraph shall be treated as income of the company—