Legalize / United Kingdom / Public General Act

Finance Act 1986

Type Public General Act

Publication 1986-07-25

Last updated 2025-04-06

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(2) If any of the tax charged has been paid, and a claim for repayment is made within the period of six years mentioned in subsection (1) or, as the case may be, (1C) above, the tax paid shall be repaid; and where the tax paid is not less than £25 it shall be repaid with interest on it at the rate applicable under section 178 of the Finance Act 1989 from the time it was paid.

(3) To the extent that the tax charged has not been paid, the charge shall be cancelled by virtue of this subsection.

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

(4A) Interest paid under subsection (2) above shall not constitute income for any tax purposes.

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

(6) In this section “the enactments relating to stamp duty” means the Stamp Act 1891 and any enactment which amends or is required to be construed together with that Act.

(7) This section shall have effect in relation to a person to whom the chargeable securities are transferred by way of security for a loan to B as it has effect in relation to a nominee of B.

Other charges : depositary receipts

Depositary receipts

93

(1) ... There shall be a charge to stamp duty reserve tax under this section where in pursuance of an arrangement —

(a) a person falling within subsection (2) below has issued or is to issue a depositary receipt for chargeable securities, and

(b) chargeable securities of the same kind and amount are transferred ... to the person mentioned in paragraph (a) above or a person falling within subsection (3) below, or are appropriated by the person mentioned in paragraph (a) above or a person falling within subsection (3) below towards the eventual satisfaction of the entitlement of the receipt's holder to receive chargeable securities.

(1A) The following provisions contain exceptions to the charge to stamp duty reserve tax under this section—

(a) subsection (7) of this section (exception so far as stamp duty is chargeable);

(b) section 95 (general exceptions);

(d) section 97AB (exempt capital-raising transfers);

(e) section 97AC (exempt listing transfers);

(f) section 97AD (exception for transfers of shares held by issuing company);

(g) section 97B (transfers between depositary receipt system and clearance system).

(2) A person falls within this subsection if his business is or includes issuing depositary receipts for chargeable securities.

(3) A person falls within this subsection if his business is or includes holding chargeable securities as nominee or agent for the person who has issued or is to issue the depositary receipt.

(4) Subject to subsections (6) and (7) below, tax under this section shall be charged at the rate of 1.5 per cent. of the following—

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

(b) in a case where the securities are transferred for consideration in money or money's worth—

(i) the amount or value of the consideration, or

(ii) where subsection (4A) applies, the amount or value of the consideration or, if higher, the value of the securities;

(4A) This subsection applies where the transfer of the securities is pursuant to—

(a) the exercise of an option to buy or to sell the securities, and

(b) either—

(i) a term of the option which provides for the securities to be transferred to the person falling within subsection (2) or (3), or

(ii) a direction, given by or on behalf of the person entitled or bound to acquire the securities pursuant to the exercise of the option, for the securities to be so transferred.

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

(6) In a case where—

(a) securities are issued, or securities sold are transferred, and (in either case) they are to be paid for in instalments,

(b) the person to whom they are issued or transferred holds them and transfers them to another person when the last instalment is paid,

(d) before the making of the transfer to the other person an instrument is received by a person falling within subsection (2) or (3) above,

(e) the instrument so received evidences all the rights which (by virtue of the terms under which the securities are issued or sold as mentioned in paragraph (a) above) subsist in respect of them at the time of the receipt, and

(f) the transfer to the other person is effected by an instrument containing a statement that paragraphs (a), (b) and (e) above are fulfilled,

subsection (4)(c) above shall have effect as if the reference to the value there mentioned were to an amount (if any) equal to the total of the instalments payable, less those paid before the transfer to the other person is effected.

(7) Where tax is (or would apart from this subsection be) charged under this section in respect of a transfer of securities, and ad valorem stamp duty is chargeable on any instrument effecting the transfer, then —

(a) if the amount of the duty is less than the amount of tax found by virtue of subsections (4) and (6) above, the tax charged under this section shall be the amount so found less the amount of the duty;

(b) in any other case, there shall be no charge to tax under this section in respect of the transfer.

(8) Where tax is charged under the preceding provisions of this section, the person liable for the tax shall (subject to subsection (9) below) be the person who has issued or is to issue the depositary receipt.

(9) Where tax is charged under the preceding provisions of this section in a case where securities are transferred, and at the time of the transfer the person who has issued or is to issue the depositary receipt is not resident in the United Kingdom and has no branch or agency in the United Kingdom, the person liable for the tax shall be the person to whom the securities are transferred.

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

(11) Subject to subsection (12) below, this section applies where securities are transferred, issued or appropriated after 18th March 1986 (whenever the arrangement was made).

(12) This section does not apply, in the case of securities which are transferred, if the Board are satisfied that they were acquired or appropriated by the transferor on or before 18th March 1986 for or towards the eventual satisfaction of the entitlement of a person to receive securities of the same kind under a depositary receipt (whether issued on or before that date or to be issued after that date).

Depositary receipts: supplementary

94

(1) For the purposes of sections 93 and 97AC a depositary receipt for chargeable securities is an instrument acknowledging —

(a) that a person holds chargeable securities or evidence of the right to receive them, and

(b) that another person is entitled to rights, whether expressed as units or otherwise, in or in relation to chargeable securities of the same kind, including the right to receive such securities (or evidence of the right to receive them) from the person mentioned in paragraph (a) above,

except that for those purposes a depositary receipt for chargeable securities does not include an instrument acknowledging rights in or in relation to securities if they are issued or sold under terms providing for payment in instalments and for the issue of the instrument as evidence that an instalment has been paid.

(2) The Treasury may by regulations provide that for subsection (1) above (as it has effect for the time being) there shall be substituted a subsection containing a different definition of a depositary receipt for the purposes of section 93 above.

(3) For the purposes of section 93(4)(b) above the value of any consideration not consisting of money shall be taken to be the price it might reasonably be expected to fetch on a sale in the open market at the time the securities are transferred.

(4) For the purposes of section 93(4)(b)(ii) and (c) above the value of the securities shall be taken to be the price they might reasonably be expected to fetch on a sale in the open market at the time they are transferred or appropriated (as the case may be).

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

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

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

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

(9) The power to make regulations or an order under this section shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.

Depositary receipts: exceptions

95

(1) Where securities are transferred —

(a) to a company which at the time of the transfer falls within subsection (6) of section 67 above . . . , and

(b) from a company which at that time falls within that subsection . . . ,

... there shall be no charge to tax under section 93 above in respect of the transfer.

(2) There shall be no charge to tax under section 93 above in respect of a transfer... or appropriation of a UK bearer instrument, except in the case of—

(a) an instrument within the exemption conferred by paragraph 16 of Schedule 15 to the Finance Act 1999 (renounceable letters of allotment etc. where rights are renounceable not later than six months after issue), or

(b) an instrument within the exemption conferred by paragraph 17 of that Schedule (non-sterling instruments) which—

(i) does not raise new capital, and

(ii) is not issued in exchange for an instrument raising new capital.

(2A) For the purpose of subsection (2)(b)—

(a) an instrument is regarded as raising new capital only if the condition in subsection (2B) is met, and

(b) an instrument is regarded as issued in exchange for an instrument raising new capital only if the conditions in subsection (2C) are met.

(2B) The condition mentioned in subsection (2A)(a) is that the instrument—

(a) is issued in conjunction with—

(i) the issue of relevant securities for which only cash is subscribed, or

(ii) the granting of rights to subscribe for relevant securities which are granted for a cash consideration only and exercisable only by means of a cash subscription; or

(b) is issued to give effect to the exercise of such rights as are mentioned in paragraph (a)(ii).

(2C) The conditions mentioned in subsection (2A)(b) are that—

(a) the instrument is issued in conjunction with the issue of relevant securities by a company in exchange for relevant securities issued by another company, and

(b) immediately before the exchange an instrument relating to those other securities—

(i) was regarded for the purposes of subsection (2)(b) as raising new capital or as issued in exchange for an instrument raising new capital, or

(ii) would have been so regarded if the amendments made to this section by section 117 of the Finance Act 1999 had been in force at the time of its issue,

and accordingly was or would have been within the exception conferred by subsection (2).

(2D) For the purposes of subsections (2B) and (2C) “relevant securities” means chargeable securities which are either—

(a) shares the holders of which have a right to a dividend at a fixed rate but have no other right to share in the profits of the company, or

(b) loan capital within the meaning of section 78 above,

and which, in either case, do not carry any rights (of conversion or otherwise) by the exercise of which chargeable securities other than relevant securities may be obtained.

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

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

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

(6) Where an arrangement is entered into under which—

(a) a company issues securities to persons in respect of their holdings of securities issued by another company, and

(b) the securities issued by the other company are cancelled,

the issue shall be treated for the purposes of this section as an issue of securities in exchange for securities issued by the other company.

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

Clearance services

96

(1) ... There shall be a charge to stamp duty reserve tax under this section where —

(a) a person (A) whose business is or includes the provision of clearance services for the purchase and sale of chargeable securities has entered into an arrangement to provide such clearance services for another person, and

(b) in pursuance of the arrangement, chargeable securities are transferred ... to A or to a person whose business is or includes holding chargeable securities as nominee for A.

(1A) The following provisions contain exceptions to the charge to stamp duty reserve tax under this section—

(a) subsection (5) of this section (exception so far as stamp duty is chargeable);

(b) section 97 (general exceptions);

(d) section 97A (election for alternative system of charge);

(e) section 97AB (exempt capital-raising transfers);

(f) section 97AC (exempt listing transfers);

(g) section 97AD (exception for transfers of shares held by issuing company);

(h) section 97B (transfers between depositary receipt system and clearance system).

(2) Subject to subsections (4) and (5) below, tax under this section shall be charged at the rate of 1.5 per cent. of the following —

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

(b) in a case where the securities are transferred for consideration in money or money's worth—

(i) the amount or value of the consideration, or

(ii) where subsection (2A) applies, the amount or value of the consideration or, if higher, the value of the securities;

(2A) This subsection applies where the transfer of the securities is pursuant to—

(a) the exercise of an option to buy or to sell the securities, and

(b) either—

(i) a term of the option which provides for the securities to be transferred to A or (as the case may be) to the person whose business is or includes holding chargeable securities as nominee for A, or

(ii) a direction, given by or on behalf of the person entitled or bound to acquire the securities pursuant to the exercise of the option, for the securities to be so transferred.

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

(4) In a case where —

(a) securities are issued, or securities sold are transferred, and (in either case) they are to be paid for in instalments,

(b) the person to whom they are issued or transferred holds them and transfers them to another person when the last instalment is paid,

(d) before the making of the transfer to the other person an instrument is received by A or a person whose business is or includes holding chargeable securities as nominee for A,

(e) the instrument so received evidences all the rights which (by virtue of the terms under which the securities are issued or sold as mentioned in paragraph (a) above) subsist in respect of them at the time of the receipt, and

(f) the transfer to the other person is effected by an instrument containing a statement that paragraphs (a), (b) and (e) above are fulfilled,

subsection (2)(c) above shall have effect as if the reference to the value there mentioned were to an amount (if any) equal to the total of the instalments payable, less those paid before the transfer to the other person is effected.

(5) Where tax is (or would apart from this subsection be) charged under this section in respect of a transfer of securities and ad valorem stamp duty is chargeable on any instrument effecting the transfer, then —

(a) if the amount of the duty is less than the amount of tax found by virtue of subsections (2) and (4) above, the tax charged under this section shall be the amount so found less the amount of the duty;

(b) in any other case, there shall be no charge to tax under this section in respect of the transfer.

(6) Where tax is charged under the preceding provisions of this section, the person liable for the tax shall (subject to subsection (7) below) be A.

(7) Where tax is charged under the preceding provisions of this section in a case where securities are transferred to a person other than A, and at the time of the transfer A is not resident in the United Kingdom and has no branch or agency in the United Kingdom, the person liable for the tax shall be the person to whom the securities are transferred.

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

(9) For the purposes of subsection (2)(b) above the value of any consideration not consisting of money shall be taken to be the price it might reasonably be expected to fetch on a sale in the open market at the time the securities are transferred.

(10) For the purposes of subsection (2)(b)(ii) and (c) above the value of securities shall be taken to be the price they might reasonably be expected to fetch on a sale in the open market at the time they are transferred.

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

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

(13) Subject to subsection (14) below, this section applies where securities are transferred or issued after 18th March 1986 (whenever the arrangement was made).

(14) This section does not apply, in the case of securities which are transferred, if the Board are satisfied —

(a) that on or before 18th March 1986 the transferor (or, where the transferor transfers as agent, the principal) agreed to sell securities of the same kind and amount to the person (other than A) referred to in subsection (1)(a) above, and

(b) that the transfer is effected in pursuance of that agreement.

Clearance services: exceptions

97

(1) Where securities are transferred —

(a) to a company which at the time of the transfer falls within subsection (6) of section 70 above . . . , and

(b) from a company which at that time falls within that subsection . . . ,

... there shall be no charge to tax under section 96 above in respect of the transfer

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

(3) There shall be no charge to tax under section 96 above in respect of a transfer ... of a UK bearer instrument, except in the case of—

(a) an instrument within the exemption conferred by paragraph 16 of Schedule 15 to the Finance Act 1999 (renounceable letters of allotment etc. where rights are renounceable not later than six months after issue), or

(b) an instrument within the exemption conferred by paragraph 17 of that Schedule (non-sterling instruments) which—

(i) does not raise new capital, and

(ii) is not issued in exchange for an instrument raising new capital.

(3A) For the purpose of subsection (3)(b)—

(a) an instrument is regarded as raising new capital only if the condition in subsection (3B) is met, and

(b) an instrument is regarded as issued in exchange for an instrument raising new capital only if the conditions in subsection (3C) are met.

(3B) The condition mentioned in subsection (3A)(a) is that the instrument—

(a) is issued in conjunction with—

(i) the issue of relevant securities for which only cash is subscribed, or

(ii) the granting of rights to subscribe for relevant securities which are granted for a cash consideration only and exercisable only by means of a cash subscription; or

(b) is issued to give effect to the exercise of such rights as are mentioned in paragraph (a)(ii).

(3C) The conditions mentioned in subsection (3A)(b) are that—

(a) the instrument is issued in conjunction with the issue of relevant securities by a company in exchange for relevant securities issued by another company, and

(b) immediately before the exchange an instrument relating to those other securities—

(i) was regarded for the purposes of subsection (3)(b) as raising new capital or as issued in exchange for an instrument raising new capital, or

(ii) would have been so regarded if the amendments made to this section by section 117 of the Finance Act 1999 had been in force at the time of its issue,

and accordingly was or would have been within the exception conferred by subsection (3).

(3D) For the purposes of subsections (3B) and (3C) “relevant securities” means chargeable securities which are either—

(a) shares the holders of which have a right to a dividend at a fixed rate but have no other right to share in the profits of the company, or

(b) loan capital within the meaning of section 78 above,

and which, in either case, do not carry any rights (of conversion or otherwise) by the exercise of which chargeable securities other than relevant securities may be obtained.

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

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

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

(7) Where an arrangement is entered into under which—

(a) a company issues securities to persons in respect of their holdings of securities issued by another company, and

(b) the securities issued by the other company are cancelled,

the issue shall be treated for the purposes of this section as an issue of securities in exchange for securities issued by the other company.

General

Administration etc.

98

(1) The Treasury may make regulations —

(a) providing that provisions of the Taxes Management Act 1970 specified in the regulations shall apply in relation to stamp duty reserve tax as they apply in relation to a tax within the meaning of that Act, with such modifications (specified in the regulations) as they think fit;

(b) making with regard to stamp duty reserve tax such further provision as they think fit in relation to administration, assessment, collection and recovery.

(1A) The power conferred on the Treasury by subsection (1) above includes power to make provision conferring or imposing on the Board functions which involve the exercise of a discretion.

(2) The power to make regulations under subsection (1) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.

Interpretation

99

(1) This section applies for the purposes of this Part of this Act.

(1A) “Bearer instrument” has the same meaning as in Schedule 15 to the Finance Act 1999.

An instrument is a “UK bearer instrument” or “non-UK bearer instrument” according to whether it is issued by or on behalf of a UK company or a non-UK company within the meaning of that Schedule.

(2) “The Board” means the Commissioners of Inland Revenue.

(3) Subject to the following provisions of this section, “chargeable securities” means —

(a) stocks, shares or loan capital,

(b) interests in, or in dividends or other rights arising out of, stocks, shares or loan capital,

(d) units under a unit trust scheme.

(4) “Chargeable securities” does not include securities falling within paragraph (a), (b) or (c) of subsection (3) above which are issued or raised by a body corporate not incorporated in the United Kingdom unless —

(a) they are registered in a register kept in the United Kingdom by or on behalf of the body corporate by which they are issued or raised, or

(b) in the case of shares, they are paired with shares issued by a body corporate incorporated in the United Kingdom, or

(c) in the case of securities falling within paragraph (b) or (c) of subsection (3) above, paragraph (a) or (b) above applies to the stocks, shares or loan capital to which they relate , or

(d) they are issued or raised by a UK Societas (whether or not in the course of its formation in accordance with Article 2 of Council Regulation (EC) 2157/2001 on the Statute for a European Company (Societas Europaea)) ....

(4A) “Chargeable securities” does not include securities falling within paragraph (a), (b) or (c) of subsection (3) above if—

(a) they are securities issued or raised by an SE (whether or not in the course of its formation in accordance with Article 2 of Council Regulation (EC) 2157/2001 on the Statute for a European Company (Societas Europaea), ...

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

(4B) Chargeable securities” does not include securities falling within paragraph (a), (b) or (c) of subsection (3) which are admitted to trading on a recognised growth market but not listed on that or any other market.

(4C) In subsection (4B), “listed” and “recognised growth market” are to be construed in accordance with section 99A.

(5) “Chargeable securities” does not include securities falling within paragraph (a), (b) or (c) of subsection (3) above if—

(a) in the case of stock or marketable securities within the meaning of section 125 of the Finance Act 2003 (abolition of stamp duty except on instruments relating to stock or marketable securities), they are securities the transfer of which is exempt from all stamp duties;

(b) in any other case, they are securities the transfer of which, disregarding that section, would be exempt from all stamp duties.

(5ZA) “Chargeable securities” does not include securities falling within paragraph (b) or (c) of subsection (3) above if the stocks, shares or loan capital to which the securities relate—

(a) are stock or marketable securities within the meaning of section 125 of the Finance Act 2003 (abolition of stamp duty except on instruments relating to stock or marketable securities) the transfer of which is exempt from all stamp duties, or

(b) are securities the transfer of which, disregarding that section, would be exempt from all stamp duties.

(5A) “Chargeable securities” does not include a unit under a unit trust scheme if—

(a) all the trustees under the scheme are resident outside the United Kingdom and the unit is not registered in a register kept in the United Kingdom by or on behalf of the trustees under the scheme; or

(b) under the terms of the scheme the trust property can only be invested in exempt investments.

(5B) For the purposes of subsection (5A)(b)—

(a) an investment other than an interest under a collective investment scheme is an exempt investment if, and only if—

(i) it is not an investment on the transfer of which ad valorem stamp duty would be chargeable,...

(ia) it is not an investment on the acquisition of which stamp duty land tax would be chargeable under Part 4 of the Finance Act 2003, and

(ii) it is not a chargeable security;

(b) an interest under a collective investment scheme is an exempt investment , unless subsection (5C) applies to the scheme;

(d) funds held for the purposes of the day to day management of the unit trust scheme are not regarded as investments.

(5C) This subsection applies to a collective investment scheme if more than 20% of the market value of the investments in which the property subject to the scheme is invested is attributable to investments which are not exempt investments for the purposes of subsection (5A)(b).

(5D) In subsections (5B) and (5C) “collective investment scheme” has the same meaning as in Part 17 of the Financial Services and Markets Act 2000.

(6) “Chargeable securities” does not include interests in depositary receipts for stocks or shares.

(6A) For the purposes of subsection (4) above, shares issued by a body corporate which is not incorporated in the United Kingdom (“the foreign company”) are paired with shares issued by a body corporate which is so incorporated (“the UK company”) where —

(a) the articles of association of the UK company and the equivalent instruments governing the foreign company each provide that no share in the company to which they relate may be transferred otherwise than as part of a unit comprising one share in that company and one share in the other, and

(b) such units have been offered for sale to the public in the United Kingdom and, at the same time, an equal number of such units have been offered for sale to the public at a broadly equivalent price in the country in which the foreign company is incorporated.

(7) A depositary receipt for stocks or shares is an instrument acknowledging —

(a) that a person holds stocks or shares or evidence of the right to receive them, and

(b) that another person is entitled to rights, whether expressed as units or otherwise, in or in relation to stocks or shares of the same kind, including the right to receive such stocks or shares (or evidence of the right to receive them) from the person mentioned in paragraph (a) above,

except that a depositary receipt for stocks or shares does not include an instrument acknowledging rights in or in relation to stocks or shares if they are issued or sold under terms providing for payment in instalments and for the issue of the instrument as evidence that an instalment has been paid.

(8) The Treasury may by regulations provide that for subsection (7) above (as it has effect for the time being) there shall be substituted a subsection containing a different definition of a depositary receipt; and the power to make regulations under this subsection shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.

(9) “Unit” (except in subsection (6A) above) and “unit trust scheme” have the same meanings as in Part VII of the Finance Act 1946 .

(9A) But “unit trust scheme” does not include arrangements to which section 564G of the Income Tax Act 2007 or section 507 of the Corporation Tax Act 2009 (alternative finance investment bonds) applies.

(10) In interpreting “chargeable securities” in sections 93, 94 95, , 96 , 97 and 97A, 97ZA above —

(a) paragraph (a) of subsection (4) above and the reference to that paragraph in paragraph (c) of that subsection shall be ignored, and

(b) the effect of section 133(3) of the Companies Act 2006 (transactions in shares registered in overseas branch register) shall be ignored for the purposes of subsection (5) above.

(11) In interpreting “chargeable securities” in section 93 or 96 above in a case where —

(a) newly subscribed shares, or

(b) securities falling within paragraph (b) or (c) of subsection (3) above which relate to newly subscribed shares,

are issued in pursuance of an arrangement such as is mentioned in that section (or an arrangement which would be such an arrangement if the securities issued were chargeable securities), paragraph (b) of subsection (4) above and the reference to that paragraph in paragraph (c) of that subsection shall be ignored.

(12) In subsection (11) above, “newly subscribed shares” means shares issued wholly for new consideration in pursuance of an offer for sale to the public.

(13) Where the calculation of any tax in accordance with the provisions of this Part results in an amount which is not a multiple of one penny, the amount so calculated shall be rounded to the nearest penny, taking any½p as nearest to the next whole penny above.

PART V — INHERITANCE TAX

Capital transfer tax to be known as inheritance tax

100

(1) On and after the passing of this Act, the tax charged under the Capital Transfer Tax Act 1984 (in this Part of this Act referred to as “the 1984 Act”) shall be known as inheritance tax and, accordingly, on and after that passing,—

(a) the 1984 Act may be cited as the Inheritance Tax Act 1984 ; and

(b) subject to subsection (2) below, any reference to capital transfer tax in the 1984 Act, in any other enactment passed before or in the same Session as this Act or in any document executed, made, served or issued on or before the passing of this Act or at any time thereafter shall have effect as a reference to inheritance tax.

(2) Subsection (1)(b) above does not apply where the reference to capital transfer tax relates to a liability arising before the passing of this Act.

(3) In the following provisions of this Part of this Act, any reference to tax except where it is a reference to a named tax is a reference to inheritance tax and, in so far as it occurs in a provision which relates to a time before the passing of this Act, includes a reference to capital transfer tax.

Lifetime transfers potentially exempt etc.

101

(1) The 1984 Act shall have effect subject to the amendments in Part I of Schedule 19 to this Act, being amendments—

(a) removing liability for tax on certain transfers of value where the transfer occurs at least seven years before the transferor’s death;

(b) providing for one Table of rates of tax;

(d) making provision with respect to the amounts of tax to be charged on transfers occurring before the death of the transferor;

(e) making provision with respect to the application of relief under Chapter I (business property) and Chapter II (agricultural property) of Part V of the 1984 Act to such transfers; and

(f) reducing the period during which the values transferred by chargeable transfers are aggregates from ten years to seven;

and amendments making provisions consequential on or incidental to the matters referred to above and to sections 102 and 103 below.

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

(3) Part I of Schedule 19 to this Act has effect, subject to Part II of that Schedule, with respect to transfers of value made, and other events occcurring, on or after 18th March 1986.

(4) The transitional provisions in Part II of Schedule 19 to this Act shall have effect.

Gifts with reservation

102

(1) Subject to subsections (5), (6) and (7A) below, this section applies where, on or after 28th March 1986, an individual disposes of any property by way of gift and either—

(a) possession and enjoyment of the property is not bona fide assumed by the donee at or before the beginning of the relevant period; or

(b) at any time in the relevant period the property is not enjoyed to the entire exclusion, or virtually to the entire exclusion, of the donor and of any benefit to him by contract or otherwise;

and in this section “the relevant period” means a period ending on the date of the donor’s death and beginning seven years before that date or, if it is later, on the date of the gift.

(2) If and so long as—

(a) possession and enjoyment of any property is not bona fide assumed as mentioned in subsection (1)(a) above, or

(b) any property is not enjoyed as mentioned in subsection (1)(b) above,

the property is referred to (in relation to the gift and the donor) as property subject to a reservation.

(3) If, immediately before the death of the donor, there is any property which, in relation to him, is property subject to a reservation then, to the extent that the property would not, apart from this section, form part of the donor’s estate immediately before his death, that property shall be treated for the purposes of the 1984 Act as property to which he was beneficially entitled immediately before his death.

(4) If, at a time before the end of the relevant period, any property ceases to be property subject to a reservation, the donor shall be treated for the purposes of the 1984 Act as having at that time made a disposition of the property by a disposition which is a potentially exempt transfer.

(5) This section does not apply if or, as the case may be, to the extent that the disposal of the property by way of gift is an exempt transfer by virtue of any of the following provisions of Part II of the 1984 Act,—

(a) section 18 (transfers between spouses or civil partners) , except as provided by subsections (5A) and (5B) below;

(b) section 20 (small gifts);

(d) section 23 (gifts to charities);

(e) section 24 (gifts to political parties);

(ee) section 24A (gifts to housing associations);

(f) section 25 (gifts for national purposes, etc);

(g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(h) section 27 (maintenance funds for historic buildings); ...

(i) section 28 (employee trusts); and

(j) section 28A (employee-ownership trusts).

(5A) Subsection (5)(a) above does not prevent this section from applying if or, as the case may be, to the extent that—

(a) the property becomes settled property by virtue of the gift,

(b) by reason of the donor’s spouse or civil partner (“the relevant beneficiary”) becoming beneficially entitled to an interest in possession in the settled property, the disposal is or, as the case may be, is to any extent an exempt transfer by virtue of section 18 of the 1984 Act in consequence of the operation of section 49 of that Act (treatment of interests in possession),

(c) at some time after the disposal, but before the death of the donor, the relevant beneficiary’s interest in possession comes to an end, and

(d) on the occasion on which that interest comes to an end, the relevant beneficiary does not become beneficially entitled to the settled property or to another interest in possession in the settled property.

(5B) If or, as the case may be, to the extent that this section applies by virtue of subsection (5A) above, it has effect as if the disposal by way of gift had been made immediately after the relevant beneficiary’s interest in possession came to an end.

(5C) For the purposes of subsections (5A) and (5B) above—

(a) section 51(1)(b) of the 1984 Act (disposal of interest in possession treated as coming to end of interest) applies as it applies for the purposes of Chapter 2 of Part 3 of that Act; and

(b) references to any property or to an interest in any property include references to part of any property or interest.

(6) This section does not apply if the disposal of property by way of gift is made under the terms of a policy issued in respect of an insurance made before 18th March 1986 unless the policy is varied on or after that date so as to increase the benefits secured or to extend the term of the insurance; and, for this purpose, any change in the terms of the policy which is made in pursuance of an option or other power conferred by the policy shall be deemed to be a variation of the policy.

(7) If a policy issued as mentioned in subsection (6) above confers an option or other power under which benefits and premiums may be increased to take account of increases in the retail price index (as defined in section 8(3) of the 1984 Act) or any similar index pecified in the policy, then, to the extent that the right to exercise on or before 1st August 1986, the exercise of that option or power before that date shall be disregarded for the purposes of subsection (6) above.

(7A) This section does not apply if—

(a) the disposal of property by way of gift took place before 30 October 2024,

(b) the property became settled property by virtue of the disposal and remained settled property at all times after the disposal and before the relevant time,

(c) immediately before 30 October 2024, the property was excluded property for the purposes of the 1984 Act by virtue of section 48(3) or (3A) (as it had effect at that time), and

(d) immediately before the relevant time, the property—

(i) was situated outside the United Kingdom and was not property to which paragraph 2 or 3 of Schedule A1 to the 1984 Act applied (overseas property with value attributable to UK residential property), or

(ii) was a holding in an authorised unit trust or a share in an open-ended investment company (within the meaning, in either case, of the 1984 Act).

(7B) In subsection (7A), “the relevant time” means—

(a) if the property ceases to meet the condition in subsection (2) at any time before the donor’s death, that time;

(b) otherwise, the time of the donor’s death.

(7C) In subsection (7A)(c), “for the purposes of the 1984 Act” includes for the purposes only of Chapter 3 of Part 3 of that Act (ten-year anniversary charges etc) because of the operation of section 81 of that Act (property moving between settlements).

(8) Schedule 20 to this Act has effect for supplementing this section.

Treatment of certain debts and incumbrances

103

(1) Subject to subsection (2) below, if, in determining the value of a person’s estate immediately before his death, account would be taken, apart from this subsection, of a liability consisting of a debt incurred by him or an incumbrance created by a disposition made by him, that liability shall be subject to abatement to an extent proportionate to the value of any of the consideration given for the debt or incumbrance which consisted of—

(a) property derived from the deceased; or

(b) consideration (not being property derived from the deceased)given by any person who was at the time entitled to, or amongst whose resources there were at any time included, any property derived from the deceased.

(2) If, in the case where the whole or part of the consideration given for a debt or incumbrance consisted of such consideration as is mentioned in subsection (1)(b) above, it is shown that the value of the consideration given, or of that part thereof, as the case may be, exceeded that which could have been rendered available by application of all the property derived from the deceased, other than such (if any) of that property—

(a) as is included in the consideration given, or

(b) as to which it is shown that the disposition of which it, or the property which it represented, was the subject matter was not made with reference to, or with a view to enabling or facilitating, the giving of the consideration or the recoupment in any manner of the cost thereof, no abatement shall be made under subsection (1) above in respect of the excess.

(3) In subsections (1) and (2) above “property derived from” means, subject to subsection (4) below, any property which was the subject matter of a dispostition made by the deceased, either by himself alone or in concert or by arrangement with any other person or which represented any of the subject matter of such a dispostition, whether directly or indirectly, and whether by virtue of on or more intermediate dispostitions.

(4) If the dispostition first-mentioned in subsection (3) above was not a transfer of value and it is shown that the disposition was not part of associated operations which included—

(a) a disposition by the deceased, either alone or in concert or by arrangement with any other person, otherwise than for full consideration in money or money’s worth paid to the deceased for his own use or benefit; or

(b) a dispostition by any other person operating to reduce the value of the property of the deceased,

that first-mentioned dispostition shall be left out of account for the purposes of subsections (1) to (3) above.

(5) If, before a person’s death but on or after 18th March 1986, money or money’s worth is paid or applied by him—

(a) in or towards the satisfaction or discharge of a debt or incumbrance in the case of which subsection (1) above would have effect on his death if the debt or incumbrance had not been satisfied or discharged, or

(b) in reduction of debt or incumbrance in the case of which that subsection has effect on his death,

the 1984 Act shall have effect as if, at the time of the payment or application, the person concerned had made a transfer of value equal to the money or money’s worth and that transfer were a potentially exempt transfer.

(6) Any reference in this section to a debt is a reference to a debt incurred on or after 18th March 1986 and any reference to an incumbrance created by a disposition is a reference to an incumbrance created by an disposition made on or after that date; and in this section “subject matter” includes, in relation to any disposition, any annual or periodical payment made or payable under or by virtue of the disposition

(7) In determining the value of a person’s estate immediately before his death, no account shall be taken (by virtue of section 5 of the 1984 Act) of any liability arising under or in connection with a policy of life insurance issued in respect of an insurance made on or after 1st July 1986 unless the whole of the sums assured under that policy form part of that person’s estate immediately before his death.

Regulations for avoiding double charges etc.

104

(1) For the purposes of the 1984 Act the Board may by regulations make such provision as is mentioned in subsection (2) below with respect to transfers of value made, and other events occurring, on or after 18th March 1986 where—

(a) a potentially exempt transfer proves to be a chargeable transfer and, immediately before the death of the transferor, his estate includes property acquired by him from the transferee otherwise than for full consideration in money or money’s worth;

(b) an individual disposes of property by a transfer of value which is or proves to be a chargeable transfer and the circumstances are such that subsection (3) or subsection (4) of section 102 above applies to the property as being or having been property subject to a reservation;

(c) in determining the value of a person’s estate immediately before his death, a liability of his to any person is abated as mentioned in section 103 above and, before his death, the deceased made a transfer of value by virtue of which the estate of that other person was increased or by virtue of which property becomes comprised in a settlement of which that other person is a trustee; or

(d) the circumstances are such as may be specified in the regulations for the purposes of this subsection, being circumstances appearing to the Board to be similar to those referred to in paragraphs (a) to (c) above.

(2) The provision which may be made by regulations under this section is provision for either or both of the following,—

(a) treating the value transferred by a transfer of value as reduced by reference to the value transferred by another transfer of value ; and

(b) treating the whole or any part of the tax paid or payable on the value transferred by a transfer of value as a credit against the tax payable on the value transferred by another transfer of value.

(3) The power to make regulations under this section shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the Commons House of Parliament.

Application of business and agricultural relief where transfer partly exempt

105

With respect to transfers of value made on or after 18th March 1986, after section 39 of the 1984 Act there shall be inserted the following section—

(39A) (1) Where any part of the value transferred by a transfer of value is attributable to— (a) the value of the relavant business property, or (b) the agricultural value of agricultural property, then, for the purpose of attributing the value transferred (as reduced in accordance with section 104 or 116 below), to specific gifts and gifts of residue, sections 38 and 39 above shall have effect subject to the following provisions of this section. (2) The value of any specific gifts of relevant business property or agricultural property shall be taken to be their value as reduced in accordance with section 104 or 116 below. (3) The value of any specific gifts not falling within subsection (2) above shall be taken to be the appropriate fraction of their value. (4) In subsection (3) above “the appropriate fraction” means a fraction of which— (a) the numerator is the difference between the value transferred and the value, reduced as mentioned in subsection (2) above, of any gifts falling within that subsection, and (b) the denominator is the difference between the unreduced value transferred and the value, before the reduction mentioned in subsection (2) above, of any gifts falling within that subsection; and in paragraph (b) above “the unreduced value transferred” means the amount which would be the value transferred by the transfer but for the reduction required by sections 104 and 116 below. (5) If or to the extent that specific gifts fall within paragraphs (a) and (b) of subsection (1) of section 38 above, the amount corresponding to the value of the gifts shall be arrived at in accordance with subsections (3) to (5) of that section by reference to their value reduced as mentioned in subsection (2) or, as the case may be, subsection (3) of this section. (6) For the purposes of this section the value of a specific gift of relevant business property or agricultural property does not include the value of any other gift out of that property; and that other gift shall not itself be treated as a specific gift of relevant business property or agricultural property. (7) In this section— - “agricultural property” and “the agricultural value of agricultural property” have the samemeaning as in Chapter II of Part V of this Act; and - “relevant business property” has the same meaing as in Chapter I of that Part.

Changes in financial institutions: business property

106

(1) In section 105 of the 1984 Act (relevant business property) the following shall be substituted for subsection (4)(a)—

(a) does not apply to any property if the business concerned is wholly that of a market maker or is that of a discount house and (in either case) is carried on in the United Kingdom, and

(2) At the end of that section there shall be inserted—

(7) In this section “market maker” means a person whom— (a) holds himself out at all normal times in compliance with the rules of The Stock Exchange as willing to buy and sell securities, stocks and shares at a price specified by him, and (b) is recognised as doing so by the Council of The Stock Exchange.

(3) Subsections (1) and (2) above apply in relation to transfers of value made, and otehr events occurring, on or after the day of the Stock Exchange reforms.

(4) The Board may by regulations provided that section 105(7) of the 1984 Act (as inserted by subsection (2) above) shall have effect—

(a) as if the reference to The Stock Exchange in paragraph (a) were to any recognised investment exchange (within the meaning given by section 285(1)(a) of the Financial Services and Markets Act 2000) or to any of those exchanges specified in the regulations, and

(b) as if the reference to the Council of Stock Exchange in paragraph (b) were to the investment exchange concerned.

(5) The Board may by regulations amend section 105 of the 1984 Act so as to secure that section 105(3) does not apply to any property if the business concerned is of such description as is set out in the regulations; and the regulations may include such incidental and consequential provisions as the Board think fit.

(6) Regulations under subsection (4) or (5) above shall apply in relation to transfers of value made, and other events occurring, on or after such day, after the Stock Exchange reforms, as is specified in the regulations.

(7) The power to make regulations under subsection (4) and (5) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the Commons House of Parliament.

(8) In this section “the day of the Stock Exchange reforms” means trhe day on which the rule of The Stock Exhcange that prohibits a person from carrying on business as both a broker and a jobber is abolished .

Changes in financial institutions: interest

107

(1) In section 234 of the 1984 Act (interest in instalments) the following shall be substituted for subsection (3)(c)—

(c) any company whose business is wholly that of a amrket maker or is that of a discount house and (in either case) is carried on in the United Kingdom.

(2) At the end of that section there shall be inserted—

(4) In this section “market maker” means a person who— (a) holds himself out at all normal times in compliance with the rules of The Stock Exchange as willing to buy and sell securities, stocks or shares at a price specified by him, and (b) is recognised as doing so by the Council of The Stock Exchange.

(3) Subsections (1) and (2) above apply in relation to chargeable transfers made, and other events occurring, on or after the day of The Stock Exchange reforms.

(4) The Board may by regulations provide that section 234(4) of the 1984 Act (as inserted by subsection (2) above) shall have effect—

(a) as if the reference to The Stock Exchange in paragraph (a) were to any recognised investment exchange (within the meaning given by section 285(1)(a) of the Financial Services and Markets Act 2000) or to any of those exchanges specified in the regulations, and

(b) as if the reference to the Council of The Stock Exchange in paragraph (b) were to the investment exchange concerned.

(5) The Board may by regulations amend section 234 of the 1984 Act so as to secure that companies of a description set out in the regulations fall within section 234(3)(c); and the regulations may include such incidental and consequential provisions as the Board think fit.

(6) Regulations under subsection (4) or (5) above shall apply in relation to chargeable transfers made, and by other events occurring, on or after such day, after the day of The Stock Exchange reforms, as is specified in the regulations.

(7) The power to make regulations under subsection (4) or (5) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the Commons House of Parliament.

(8) In this section “the day of The Stock Exchange reforms” has the same meaning as in section 106 above.

PART VI — OIL TAXATION

The on-shore/off-shore boundary

108

(1) For the purposes of the enactments relating to oil taxation, land lying between the landward boundary of the territorial sea and the shoreline of the United Kingdom (as defined below) shall be treated as part of the bed of the territorial sea of the United Kingdom and any reference in those enactments to the territorial sea or the subsoil beneath it shall be construed accordingly.

(2) Any reference to the United Kingdom in the enactments relating to oil taxation, where that reference is a reference to a geographical area, shall be treated as a reference to the United Kingdom exclusive of the land referred to in subsection (1) above and of any waters for the time being covering that land.

(3) In this section—

(a) “the landward boundary of the territorial sea” means the line for the time being ordered by Her Majesty in Council to be the baseline from which the breadth of the territorial sea is measured; and

(b) “the shoreline of the United Kingdom” means, subject to subsection (4) below, the high-water line along the coast, including the coast of all islands comprised in the United Kingdom.

(4) In the case of waters adjacent to a bay, as defined in the Territorial Waters Order in Council 1964, the shoreline means—

(a) if the bay has only one mouth and the distance between the high-water lines of the natural entrance points of the bay does not exceed 5,000 metres, a straight line joining those high-water lines;

(b) if, because of the presence of islands, the bay has more than one mouth and the distances between the high-water lines of the natural entrance points of each mouth added together do not exceed 5,000 metres, a series of straight lines across each of the mouths drawn so as to join those high-water lines; and

(c) if neither paragraph (a) nor paragraph (b) above applies, a straight line 5,000 metres in length drawn from high-water line to high-water line within the bay in such a manner as to enclose the maximum area of water that is possible with a line of that length.

(5) If, by virtue of this section, it becomes necessary at any time to establish the high-water line at any place, it shall be taken to be the line which, on the current Admiralty chart showing that place, is depicted as “the coastline”, and for this purpose,—

(a) an Admiralty chart means a chart published under the superintendence of the Hydrographer of the Navy;

(b) if there are two or more Admiralty charts of different scales showing the place in question and depicting the coastline, account shall be taken only of the largest scale chart; and

(c) subject to paragraph (b) above, the current Admiralty chart at any time is that most recently published before that time.

(6) In this section “the enactments relating to oil taxation” means Part I of the Oil Taxation Act 1975 and any enactment which is to be construed as one with that Part.

(7) This section shall be deemed to have come into force on 1st April 1986.

Alternative valuation of light gases

109

(1) Where an election is made under this section before 1st January 1994 and accepted by the Board, the market value for the purposes of the Oil Taxation Acts of any light gases to which the election applies shall be determined, not in accordance with paragraphs 2, 2A and 3 of Schedule 3 to the principal Act (value under a notional contract), but by reference to a price formula specified in the election; and, in relation to any such light gases, any reference to market value in any other provision of the Oil Taxation Acts shall be construed accordingly.

(2) No election may be made under this section in respect of light gases which are “ethane” as defined in subsection (6)(a) of section 134 of the Finance Act 1982 (alternative valuation of ethane used for petrochemical purposes) if the principal purpose for which the gases are being or are to be used is that specified in subsection (2)(b) of the said section 134 (use for petrochemical purposes).

(3) Subject to subsection (4) below, an election under this section applies only to light gases—

(a) which, during the period covered by the election, are either disposed of otherwise than in sales at arm’s length or relevantly appropriated; and

(b) which are not subject to fractionation between the time at which they are so disposed of or appropriated and the time at which they are applied or used for the purposes specified in the election.

(4) In any case where,—

(a) at a time during the period covered by an election, a market value falls to be determined for light gases to which subsection (4)(b) or (5)(d) of section 2 of the principal Act applies (oil stocks at the end of chargeable periods), and

(b) after the expiry of the chargeable period in question, the light gases are disposed of or appropriated as mentioned in subsection (3) above,

the market value of those light gases at the time referred to in paragraph (a) above shall be determined as if they were gases to which the election applies.

(5) Schedule 18 to the Finance Act 1982 (which applies to elections under section 134 of that Act relating to ethane used or to be used for petrochemical purposes) shall have effect for supplementing this section but subject to the modifications in Schedule 21 to this Act (in which “the 1982 Schedule” means the said Schedule 18).

(6) This section shall be construed as one with Part I of the principal Act and in this section—

(a) “light gases” means oil consisting of gas of which the largest component by volume over any chargeable period is methane or ethane or a combination of those gases and which—

(i) results from the fractionation of gas before it is disposed of or appropriated as mentioned in subsection (3)(a) above, or

(ii) before being so disposed of or appropriated, is not subjected to initial treatment or is subjected to initial treatment which does not include fractionation;

(b) “the principal Act” means the Oil Taxation Act 1975; and

(c) “the Oil Taxation Acts” means Part I of the principal Act and any enactment which is to be construed as one with that Part.

(7) In this section “fractionation” means the treatment of gas in order to separate gas of one or more kinds as mentioned in paragraph 2A(3) of Schedule 3 to the principal Act; and for the purposes of subsection (6)(a) above,—

(a) the proportion of methane, ethane or a combination of the two in any gas shall be determined at a temperature of 15[2B]dgC and at a pressure of one atmosphere; and

(b) any component other than methane, ethane or liquified petroleum gas shall be disregarded.

Attribution of certain receipts and expenditure between oil fields

110

(1) Section 8 of the Oil Taxation Act 1983 (qualifying assets) shall have effect, and be deemed always to have had effect, subject to the amendments in subsections (2) and (3) below.

(2) In subsection (3) (which determines the oil field to which are attributable tariff receipts or disposal receipts referable to a qualifying asset) after the word “above”, both where it occurs in paragraph (c) and also in the words following paragraph (c), there shall be inserted “and subsection (3A) below”.

(3) After subsection (3) there shall be inserted the following subsection—

(3A) If development decisions were first made in relation to two or more oil fields on the same day, then, for the purposes of subsection (3)(c) above, it shall be conclusively presumed that the first of those decisions was made in relation to that one of those fields in connection with which it appeared— (a) at the time of the decision, or (b) if it is later, at the time the asset was acquired or brought into existence by the participator in question for use in connection with an oil field, that the participator in question would make the most use of the asset.

(4) Paragraph 6 of Schedule 1 to the Oil Taxation Act 1983 (attribution of allowable expenditure) shall have effect and be deemed always to have had effect with the addition of the following sub-paragraph—

(3) Subsection (3A) of section 8 of this Act applies for the purposes of sub-paragraph (1) above as it applies for the purposes of subsection (3)(c) of that section.

Part VII — Miscellaneous and Supplementary

Broadcasting: additional payments by programme contractors

111

(1) The Broadcasting Act 1981 shall have effect with respect to additional payments payable by programme contractors under that Act subject to the amendments made by Part I of Schedule 22 to this Act.

(2) The transitional provisions made by Part II of that Schedule shall have effect.

(3) This section shall be deemed to have come into force on 1st April 1986.

Limit for local loans

112

In section 4(1) of the National Loans Act 1968 (which provides that the aggregate of any commitments of the Public Works Loan Commissioners in respect of undertakings to grant local loans and any amount outstanding in respect of the principal of such loans shall not exceed £28,000 million or such other sum not exceeding £35,000 million as the Treasury may specify by order) for the words “£28,000 million” and “£35,000 million” there shall be substituted respectively “£42,000 million” and “£50,000 million”.

"Securities" for purposes of Exchange Equalisation Account Act 1979

113

—At the end of section 3 of the Exchange Equalisation Account Act 1979 (investment of the funds of the Exchange Equalisation Account) there shall be added the following subsection—

(4) Without prejudice to the reference in subsection (1)(b) above to special drawing rights, the reference in subsection (3) above to currency of any country includes a reference to units of account defined by reference to more than one currency.

Short title, interpretation, construction and repeals

114

(1) This Act may be cited as the Finance Act 1986.

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

(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) Part III of this Act shall be construed as one with the Stamp Act 1891.

(5) Part V of this Act, other than section 100, shall be construed as one with the Capital Transfer Tax Act 1984.

(6) The enactments and Orders 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

Part I — Provision Substituted for Part II of Schedule 2 to the Acts of 1971 and 1972

Part II — Tables Substituted in Part II of Schedule 4 to the Acts of 1971 and 1972

SCHEDULE 2

Part I

Additional days to be included in duration of certain licences

1

(1) In the Vehicles (Excise) Act 1971 (in this Part of this Schedule referred to as “the 1971 Act”), section 2A (power to modify duration of licences and rates of duty) as set out in paragraph 5 of Schedule 7 to that Act (transitional provisions) shall be amended as follows.

(2) In subsection (1) after paragraph (a) there shall be inserted the following paragraph—

(aa) in the case of licences taken out on the first registration of vehicles of such description as may be so specified, periods exceeding by such number of days (not exceeding thirty) as may be determined by or under the order the periods for which the licence would otherwise have effect by virtue of section 2(1) above or any provision made under paragraph (a) above; or

(3) In subsection (2), in paragraph (a) of the proviso, for the words “other than one of twelve months” there shall be substituted the words “of a fixed number of months other than twelve or for a period of less than a month”.

Tower wagons used by street lighting authorities etc.

2

In section 4 of the 1971 Act (exemptions from duty) in subsection (2) for the definition of “tower wagon” there shall be substituted the following—

“tower wagon” means a goods vehicle— (a) into which there is built, as part of the vehicle, any expanding or extensible contrivance designed for facilitating the erection, inspection, repair or maintenance of overhead structures or equipment, and (b) which is neither constructed nor adapted for use nor used for the conveyance of any load other than— (i) such a contrivance and articles used in connection therewith, and (ii) articles used in connection with the installation or maintenance, by means of such a contrivance, of materials or apparatus for lighting streets, roads or public places

Visiting forces

3

In section 7 of the 1971 Act (miscellaneous exemptions from duty) after subsection (3) there shall be inserted the following subsection—

(3A) Regulations under this Act may provide that, in such cases, subject to such conditions and for such period as may be prescribed, a mechanically propelled vehicle shall not be chargeable with any duty under this Act if it has been imported by— (a) a person for the time being appointed to serve with any body, contingent or detachment of the forces of any prescribed country, being a body, contingent or detachment which is for the time being present in the United Kingdom on the invitation of Her Majesty’s Government in the United Kingdom, or (b) a member of any country’s military forces, except Her Majesty’s United Kingdom forces, who is for the time being appointed to serve in the United Kingdom under the orders of any prescribed organisation, or (c) a person for the time being recognised by the Secretary of State as a member of a civilian component of such a force as is mentioned in paragraph (a) above or as a civilian member of such an organisation as is mentioned in paragraph (b) above, or (d) any prescribed dependant of a person falling within paragraph (a), paragraph (b) or paragraph (c) above.

Trade licences

4

(1) Section 16 of the 1971 Act (trade licences) shall be amended as follows.

(2) In subsection (1) (issue of trade licences)—

(a) at the end of paragraph (iii) (vehicles for which a manufacturer may use a trade licence) there shall be inserted the words “and all vehicles which are from time to time submitted to him by other manufacturers for testing on roads in the course of that business”; and

(b) at the beginning of paragraph (c) of the proviso (restrictions on use of trade licence) there shall be inserted the words “except in such circumstances as may be prescribed”.

(3) After subsection (1) there shall be inserted the following subsection—

(1A) Subsection (1) above has effect in relation to an application made by a person who satisfies the Secretary of State that he intends to commence business as a motor trader or vehicle tester as it has effect in relation to an application made by a motor trader or vehicle tester.

(4) In subsection (3) (which specifies the cases in which regulations may allow a vehicle to be used under a trade licence to carry a load) after paragraph (b) there shall be inserted the following paragraph—

(bb) in the case of a vehicle is being delivered or collected, a load consisting of another vehicle used or to be used for travel from or to the place of delivery or collection; or

(5) Subsection (4) (duration of trade licence) shall be amended as follows—

(a) for the words “A trade licence”. . . to the 1971 Act, there shall be substituted “Subject to subsections (4A) and (4B) below, a trade licence”;

(b) for paragraph (b) there shall be substituted—

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