LegalizeReform history
Finance Act 1987
12 versions
· 1987-05-15
2024-02-22
Finance Act 1987
2016-10-01
Finance Act 1987
2012-07-17
Finance Act 1987
2010-04-01
Finance Act 1987
2009-10-01
Finance Act 1987
2009-07-21
Finance Act 1987
2009-04-01
Finance Act 1987
2008-07-21
Finance Act 1987
2008-04-01
Finance Act 1987
2007-05-03
Finance Act 1987
2006-07-19
Finance Act 1987
Changes on 2006-07-19
@@ -6,7 +6,7 @@
### Duties of excise
#### Unleaded petrol
#### Contract notes.
##### 1
@@ -14,116 +14,84 @@
> (13A)
> (1) On unleaded petrol charged with the excise duty on hydrocarbon oil and delivered for home use there shall be allowed at the time of delivery a rebate of duty at the rate of £0.0096 a litre.
> (2) For the purposes of this section petrol is "unleaded" if it contains not more than 0.013 grams of lead per litre of petrol or, if the petrol is delivered for home use before 1st April 1990, not more than 0.020 grams of lead per litre of petrol.
> (2) For the purposes of this section petrol is “*unleaded*” if it contains not more than 0.013 grams of lead per litre of petrol or, if the petrol is delivered for home use before 1st April 1990, not more than 0.020 grams of lead per litre of petrol.
> (3) Rebate shall not be allowed under this section in any case where it is allowed under section 14 below.
- (2) In section 24 of that Act (control of use of duty-free and rebated oil) in subsection (1) (power of Commissioners to make regulations) after the words "section 12" there shall be inserted "section 13A".
- (3) In section 27 of that Act (interpretation) in the definition of "rebate" after the words "section 11" there shall be inserted "13A".
- (4) This section shall be deemed to have come into force at 6 o'clock in the evening of 17th March 1987.
- (2) In section 24 of that Act (control of use of duty-free and rebated oil) in subsection (1) (power of Commissioners to make regulations) after the words “section 12” there shall be inserted “ section 13A ”.
- (3) In section 27 of that Act (interpretation) in the definition of “rebate” after the words “section 11” there shall be inserted “ 13A ”.
- (4) This section shall be deemed to have come into force at 6 o’clock in the evening of 17th March 1987.
#### Vehicles excise duty
##### 2
- (1) The Vehicles (Excise) Act 1971 and the Vehicles (Excise) Act (Northern Ireland) 1972 shall be amended in accordance with this section.
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) In Schedule 4 to each of the Acts of 1971 and 1972 (annual rates of duty on goods vehicles)—
- (a) in Part I, in sub-paragraph (2) of paragraph 6 (farmer's goods vehicle or showman's goods vehicle having a plated gross weight or a plated train weight) in paragraph (b) (weight exceeding 7.5 tonnes but not exceeding 12 tonnes) for "£155" (which applies to farmers' goods vehicles only) there shall be substituted "£175"; and
- (b) in Part II, for Tables A(1), C(1) and D(1) (rates for farmers' goods vehicles having plated weight exceeding 12 tonnes) there shall be substituted the Tables set out in Part I of Schedule 1 to this Act.
- (3) In section 16 of the Act of 1971, in subsection (5) (annual rates of duty for trade licences), including that subsection as set out in paragraph 12 of Part I of Schedule 7 to that Act, for "£70" and "£14" there shall be substituted respectively "£85" and "£17".
- (4) In section 16 of the Act of 1972, in subsection (6) (annual rates of duty for trade licences), including that subsection as set out in paragraph 12 of Part I of Schedule 9 to that Act, for "£70" and "£14" there shall be substituted respectively "£85" and "£17".
- (5) The amendments of the Acts of 1971 and 1972 set out in Part II of Schedule 1 to this Act shall have effect for the purpose of, and in connection with, establishing recovery vehicles as a class of vehicles . chargeable with a specific duty of excise.
- (6) The Acts of 1971 and 1972 and section 102 of the Customs and Excise Management Act 1979, as it applies in relation to licences under the Act of 1971, shall have effect subject to the further amendments in Part III of Schedule 1 to this Act.
- (7) Subsection (2) above applies in relation to licences taken out after 17th March 1987; and subsections (3) to (5) above apply in relation to licences taken out after 31st December 1987.
- (8) In Part III of Schedule 1 to this Act—
- (a) paragraphs 8 to 11 shall not affect any amount payable in respect of any day before the day on which this Act is passed,
- (b) paragraphs 12 and 13 shall not affect any amount payable in respect of, or any part of, the calendar month in which this Act is passed or in respect of, or any part of, any previous calendar month, and
- (c) paragraphs 20 and 21 shall not affect the penalty for an offence committed before the passing of this Act,
but, subject to that, that Part of that Schedule shall come into force on the passing of this Act.
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . section 102 of the Customs and Excise Management Act of 1979, as it applies in relation to licences under the Act of 1971, shall have effect subject to the further amendments in Part III of Schedule 1 to this Act.
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Abolition of general betting duty on on-course bets
##### 3
- (1) General betting duty shall not be chargeable on any bet made on or after 29th March 1987 which is an on-course bet within the meaning of Part I of the Betting and Gaming Duties Act 1981 (in this section referred to as "the 1981 Act") and, accordingly, with respect to bets made on or after that date, section 1 of the 1981 Act (charge to, and rates of, duty) shall be amended as follows—
- (a) in subsection (1) after the words "on any bet" there shall be inserted "which is not an on-course bet and"; and
- (b) in subsection (2) the words from the beginning of paragraph (a) to "bet" in paragraph (b) shall be omitted.
- (2) With respect to bets made on or after 29th March 1987 but before the betting commencement date within the meaning of section 6 of the Finance Act 1986, Part III of the Miscellaneous Transferred Excise Duties Act (Northern Ireland) 1972 (in this section referred to as "the 1972 Act") (which made separate provision for Northern Ireland corresponding to that made by the 1981 Act and which ceased to have effect on the betting commencement date except in relation to bets made before that date) shall be deemed to have been amended as follows—
- (a) in section 16(1) (charge of duty) after the words "on any bet" there shall be inserted "which is not an on-course bet and"; and
- (b) in section 17 (rates of duty) in subsection (1) paragraph (a) and, in paragraph (b), the words from the beginning to "bet" shall be omitted.
- (1) General betting duty shall not be chargeable on any bet made on or after 29th March 1987 which is an on-course bet within the meaning of Part I of the Betting and Gaming Duties Act 1981 (in this section referred to as “*the 1981 Act*”) and, accordingly, with respect to bets made on or after that date, section 1 of the 1981 Act (charge to, and rates of, duty) shall be amended as follows—
- (a) in subsection (1) after the words “on any bet” there shall be inserted “ which is not an on-course bet and ”; and
- (b) in subsection (2) the words from the beginning of paragraph (a) to “bet” in paragraph (b) shall be omitted.
- (2) With respect to bets made on or after 29th March 1987 but before the betting commencement date within the meaning of section 6 of the Finance Act 1986, Part III of the Miscellaneous Transferred Excise Duties Act (Northern Ireland) 1972 (in this section referred to as “*the 1972 Act*”) (which made separate provision for Northern Ireland corresponding to that made by the 1981 Act and which ceased to have effect on the betting commencement date except in relation to bets made before that date) shall be deemed to have been amended as follows—
- (a) in section 16(1) (charge of duty) after the words “on any bet” there shall be inserted “ which is not an on-course bet and ”; and
- (b) in section 17 (rates of duty) in subsection (1) paragraph (a) and, in paragraph (b), the words from the beginning to “*bet*” shall be omitted.
- (3) In Schedule 1 to the 1981 Act (supplementary provisions)—
- (a) in paragraph 1 (definitions) at the end of the definition of "general betting business" there shall be added the words "or would or might involve such sums becoming so payable if on-course bets were not excluded from that duty"; and
- (b) in paragraph 2 (power to make regulations for administration of general betting duty) in sub-paragraph (4)(a) after the words "liable for duty" there shall be inserted "or would be or might be or become liable for duty if on-course bets were not excluded from duty".
- (a) in paragraph 1 (definitions) at the end of the definition of “general betting business” there shall be added the words “ or would or might involve such sums becoming so payable if on-course bets were not excluded from that duty ”; and
- (b) in paragraph 2 (power to make regulations for administration of general betting duty) in sub-paragraph (4)(a) after the words “liable for duty” there shall be inserted “ or would be or might be or become liable for duty if on-course bets were not excluded from duty ”.
- (4) The amendments made by subsection (3) above shall be deemed to have come into force on 29th March 1987.
- (5) During the period beginning with 29th March 1987 and ending with the betting commencement date within the meaning of section 6 of the Finance Act 1986, in Schedule 2 to the 1972 Act (supplementary provisions) the references to a business which involves, or may involve, general betting duty becoming payable by any person and the references to an activity by reason of which a person is or may be or become liable for that duty shall be deemed to have included respectively references to a business which would or might involve that duty becoming payable, and to an activity by reason of which a person would be or might be or become liable for that duty, if on -course bets were not excluded from that duty.
- (5) During the period beginning with 29th March 1987 and ending with the betting commencement date within the meaning of section 6 of the Finance Act 1986, in Schedule 2 to the 1972 Act (supplementary provisions) the references to a business which involves, or may involve, general betting duty becoming payable by any person and the references to any activity by reason of which a person is or may be or become liable for that duty shall be deemed to have included respectively references to a business which would or might involve that duty becoming payable, and to an activity by reason of which a person would be or might be or become liable for that duty, if on-course bets were not excluded from that duty.
#### Gaming machine licence duty: rates
##### 4
With respect to licences for any period beginning on or after 1st June 1987, for the Tables set out in section 23(1) of the Betting and Gaming Duties Act 1981 there shall be substituted the following Tables—
| Description of machines authorised by the licence | Duty on whole-year licence |
| --- | --- |
| | £ |
| Chargeable at the lower rate | 150 per machine |
| Chargeable at the higher rate | 375 per machine |
| Description of machines authorised by the licence | Duty on whole-year licence |
| --- | --- |
| | £ |
| Chargeable at the lower rate | 375 per machine |
| Chargeable at the higher rate | 960 per machine |
#### Gaming machine licence duty: other amendments
##### 5
- (1) With respect to licences for any period beginning on or after 1st October 1987, in the Betting and Gaming Duties Act 1981 (in this section referred to as "the 1981 Act") for subsection (3) of section 21 (which specifies the periods for which licences may be granted) there shall be substituted the following subsection—
> (3) A gaming machine licence may be a whole-year, a half-year or a quarter-year licence and shall be granted for a period of twelve, six or three months beginning with the first day of any month.
- (2) In subsection (3) of section 26 of the 1981 Act (which provides that if one or more gaming machines are made available on any premises in such a way that they can be played, any gaming machine anywhere on the premises shall be treated as provided for gaming) after the word "and" there shall be inserted "subject to subsection (3A) below".
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) In subsection (3) of section 26 of the 1981 Act (which provides that if one or more gaming machines are made available on any premises in such a way that they can be played, any gaming machine anywhere on the premises shall be treated as provided for gaming) after the word “and” there shall be inserted “ subject to subsection (3A) below ”.
- (3) After subsection (3) of the said section 26 there shall be inserted the following subsection—
> (3A) The Commissioners may by regulations make provision for the purpose of enabling spare gaming machines to be kept on premises for use in the case of the breakdown of other gaming machines on those premises; and such regulations may provide that, in such circumstances and subject to such conditions as may be specified in the regulations, a gaming machine on any premises which is not made available as mentioned in subsection (3) above, or is not in a state in which it can be played, shall not be treated by virtue of that subsection as provided for gaming on those premises.
- (4) With effect from 1st October 1987, in Schedule 4 to the 1981 Act at the beginning of paragraph 4 (months preceding and following licences for summer months) there shall be inserted the words "Subject to sub-paragraph (2) below" and at the end of that paragraph there shall be added the following sub-paragraph—
> (2) Sub-paragraph (1) above shall not apply in relation to the provision of a machine on any premises—
> (a) during March of any year, if any person has become entitled to a repayment of duty under paragraph 11 below on the surrender of a licence in respect of those premises or any machine on those premises during the preceding February,
> (b) during October of any year, if any person has become entitled to such a repayment on the surrender of such a licence during the preceding March, June or September.
- (5) With respect to the surrender of licences on or after 1st October 1987, in Schedule 4 to the 1981 Act, in sub-paragraph (1) of paragraph 11 (surrender of licences) for the words from "be entitled" onwards there shall be substituted "be entitled to a repayment of duty, in respect of each complete month in the unexpired period of the licence, of an amount equal—
- (a) in the case of a whole-year licence, to one-twelfth of the duty paid on the grant of the licence, and
- (b) in the case of a half-year licence, to one-twelfth of the duty that would have been payable on the grant of the licence if it had been a whole-year licence."
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Amendments of the Management Act
@@ -131,53 +99,42 @@
##### 6
- (1) At the end of section 20 of the Customs and Excise Management Act 1979 (approved wharves) there shall be added the following subsection—
> (4) An officer may at any time enter an approved wharf and inspect it and any goods for the time being at the wharf.
- (2) At the end of section 25 of that Act (approval of transit sheds) there shall be added the following subsection—
> (5) An officer may at any time enter a transit shed and inspect it and any goods for the time being in the transit shed.
#### Powers of search and access etc. in respect of vehicles
##### 7
- (1) In section 27 of the Customs and Excise Management Act 1979 (officers' power of boarding) in subsection (1) for the words from "a vehicle" to "any officer" there shall be substituted "a vehicle is—
- (a) entering, leaving or about to leave the United Kingdom,
- (b) within the prescribed area,
- (c) within the limits of or entering or leaving a port or any land adjacent to a port and occupied wholly or mainly for the purpose of activities carried on at the port,
- (d) at, entering or leaving an aerodrome,
- (e) at, entering or leaving an approved wharf, transit shed, customs warehouse or free zone, or
- (f) at, entering or leaving any such premises as are mentioned in subsection (1) of section 112 below,
any officer".
- (2) In section 28 of that Act (officers' powers of access, etc.) in subsection (1) after the words "any vehicle" there shall be inserted "which falls within paragraphs (a) to (f) of subsection (1) of section 27 above or is".
- (1) In section 27 of the Customs and Excise Management Act 1979 (officers’ power of boarding) in subsection (1) for the words from “a vehicle” to “any officer” there shall be substituted
> a vehicle is—
> (a) entering, leaving or about to leave the United Kingdom,
> (b) within the prescribed area,
> (c) within the limits of or entering or leaving a port or any land adjacent to a port and occupied wholly or mainly for the purpose of activities carried on at the port,
> (d) at, entering or leaving an aerodrome,
> (e) at, entering or leaving an approved wharf, transit shed, customs warehouse or free zone, or
> (f) at, entering or leaving any such premises as are mentioned in subsection (1) of section 112 below,
> any officer
.
- (2) In section 28 of that Act (officers’ powers of access, etc.) in subsection (1) after the words “any vehicle” there shall be inserted “ which falls within paragraphs (a) to (f) of subsection (1) of section 27 above or is ”.
#### Local export control
##### 8
- (1) In section 58A of the Customs and Excise Management Act 1979 (local export control) at the end of subsection (1) there shall be inserted "and, subject to and to such modifications as may be specified in the directions, this section and section 58D below shall apply in relation to goods which, for the purposes of any Community regulation relating to export refunds or monetary compensatory amounts, are treated as exports as if the supply of the goods were their exportation or, as the case may require, their shipping for exportation".
- (2) In subsection (3)(b) of that section (conditions for the application of local export control) after the word "shipped" there shall be inserted "for exportation or exported by land".
- (1) In section 58A of the Customs and Excise Management Act 1979 (local export control) at the end of subsection (1) there shall be inserted “ and, subject to and to such modifications as may be specified in the directions, this section and section 58D below shall apply in relation to goods which, for the purposes of any Community regulation relating to export refunds or monetary compensatory amounts, are treated as exports as if the supply of the goods were their exportation or, as the case may require, their shipping for exportation ”.
- (2) In subsection (3)(b) of that section (conditions for the application of local export control) after the word “shipped” there shall be inserted “ for exportation or exported by land ”.
- (3) After subsection (7) of that section (power of Commissioners to relax requirements) there shall be inserted—
> (7A) Without prejudice to the powers of the Commissioners under subsection (7) above, they may direct that, in relation to goods of a description specified in the directions which are shipped for exportation or exported by land by an exporter of a description so specified, paragraph (a) of subsection (3) above shall have effect as if—
> (a) in sub-paragraph (i) the words "time and" were omitted; and
> (a) in sub-paragraph (i) the words “time and” were omitted; and
> (b) for sub-paragraph (ii) there were substituted—
> (ii) at the time that notice is delivered or immediately thereafter, the exporter enters such particulars of the goods and of such other matters as may be required by the directions in a record maintained by him at such place as the proper officer may require; and
> (ii) at the time that notice is delivered or immediately thereafter, the exporter enters such paarticulars of the goods and of such other matters as may be required by the directions in a record maintained by him at such place as the proper officer may require; and
> (iii) the proper officer informs the exporter that he consents to the removal of the goods; and
- (4) In section 58D of that Act (operative date for Community purposes) in subsection (2) (b) for the words following "above" there shall be substituted "as set out in section 58 A(7 A)(b) above, the day entry is made".
- (4) In section 58D of that Act (operative date for Community purposes) in subsection (2) (b) for the words following “above” there shall be substituted “ as set out in section 58A(7A)(b) above, the day entry is made ”.
#### Records relating to importation and exportation
@@ -186,13 +143,13 @@
After section 75 of the Customs and Excise Management Act 1979 there shall be inserted the following—
> (75A)
> (1) Every person who is concerned (in whatever capacity) in the importation or exportation of goods of which an entry or specification is required for that purpose by or under this Act shall keep such records as the Commissioners "may require.
> (1) Every person who is concerned (in whatever capacity) in the importation or exportation of goods of which an entry or specification is required for that purpose by or under this Act shall keep such records as the Commissioners may require.
> (2) The Commissioners may require any records kept in pursuance of this section to be preserved for such period not exceeding four years as they may require.
> (3) The duty under this section to preserve records may be discharged by the preservation of the information contained therein by such means as the Commissioners may approve; and where that information is so preserved a copy of any document forming part of the records shall, subject to the following provisions of this section, be admissible in evidence in any proceedings, whether civil or criminal, to the same extent as the records themselves.
> (4) The Commissioners may, as a condition of an approval under subsection (3) above of any means of preserving information, impose such reasonable requirements as appear to them necessary for securing that the information will be as readily available to them as if the records themselves had been preserved.
> (5) The Commissioners may at any time for reasonable cause revoke or vary the conditions of any approval given under subsection (3) above.
> (6) A statement contained in a document produced by a computer shall not by virtue of subsection (3) above be admissible in evidence—
> (a) in civil proceedings in England and Wales, except in accordance with sections 5 and 6 of the Civil Evidence Act 1968:
> (a) in civil proceedings in England and Wales, except in accordance with sections 5 and 6 of the Civil Evidence Act 1968;
> (b) in criminal proceedings in England and Wales, except in accordance with sections 68 to 70 of the Police and Criminal Evidence Act 1984;
> (c) in civil proceedings in Northern Ireland, except in accordance with sections 2 and 3 of the Civil Evidence Act (Northern Ireland) 1971; and
> (d) in criminal proceedings in Northern Ireland, except in accordance with the said sections 2 and 3, which shall, for the purposes of this section, apply with the necessary modifications to such proceedings.
@@ -201,18 +158,18 @@
##### 10
In section 77 of the Customs and Excise Management Act 1979 (information in relation to goods imported, exported or shipped for carriage coastwise) in subsection (1)(a) the words "importation, exportation or" shall be omitted, and after that section there shall be inserted the following section—
In section 77 of the Customs and Excise Management Act 1979 (information in relation to goods imported, exported or shipped for carriage coastwise) in subsection (1)(a) the words “*importation, exportation or*” shall be omitted, and after that section there shall be inserted the following section—
> (77A)
> (1) Every person who is concerned (in whatever capacity) in the importation or exportation of goods for which an entry or specification is required for that purpose by or under this Act shall—
> (a) furnish to the Commissioners, within such time and in such "form as they may reasonably require, such information relating to the goods or to the importation or exportation as the Commissioners may reasonably specify; and
> (a) furnish to the Commissioners, within such time and in such form as they may reasonably require, such information relating to the goods or to the importation or exportation as the Commissioners may reasonably specify; and
> (b) if so required by an officer, produce or cause to be produced for inspection by the officer—
> (i) at the principal place of business of the person upon whom the demand is made or at such other place as the officer may reasonably require, and
> (ii) at such time as the officer may reasonably require,
> any documents relating to the goods or to the importation or exportation.
> (2) Where, by virtue of subsection (1) above, an officer has power to require the production of any documents from any such person as is referred to in that subsection, he shall have the like power to require production of the documents concerned from any other person who appears to the officer to be in possession of them; but where any such other person claims a lien on any document produced by him, the production shall be without prejudice to the lien.
> (3) An officer may take copies of, or make extracts from, any document produced under subsection (1) or subsection (2) above.
> (4) If it appears to him to be necessary to do so, an officer may, at a reasonable time and for a reasonable period, remove any document produced under subsection (1) or subsection (2) above and shall, on request, provide a receipt for any document so removed; and where a lien is claimed on a document produced under subsection (2) above, the removal of the document under this subsection shall not be regarded as breaking the lien.
> (4) If it appears to him to be necessary to do so, an officer may, at a reasonable time and for a reasonable period, remove any document produced under subsection (1) or subsection (2) above and shall, on request, provide a receipt for any document so removed; and where a lien is claimed on a document produced under subsection (2) above, the removal of the document under this subsection shall not be regarded as breaking lien.
> (5) Where a document removed by an officer under subsection (4) above is reasonably required for the proper conduct of a business, the officer shall, as soon as practicable, provide a copy of the document, free of charge, to the person by whom it was produced or caused to be produced.
> (6) Where any documents removed under the powers conferred by this section are lost or damaged, the Commissioners shall be liable to compensate their owner for any expenses reasonably incurred by him in replacing or repairing the documents.
> (7) If any person fails to comply with a requirement under this section, he shall be liable on summary conviction to a penalty of level 3 on the standard scale.
@@ -223,233 +180,38 @@
##### 11
- (1) At the end of section 14(1) of the principal Act (which provides for tax to be accounted for and paid in accordance with regulations) there shall be added the words ", and regulations may make different provision for different circumstances".
- (2) In Schedule 7 to that Act (administration, collection and enforcement) after sub-paragraph (3) of paragraph 2 there shall be inserted—
> (3A) Regulations under this paragraph may make provision whereby, in such cases and subject to such conditions as may be determined by or under the regulations, tax in respect of a supply may be accounted for and paid by reference to the time when consideration for the supply is received; and any such regulations may make such modifications of the provisions of this Act (including in particular, but without prejudice to the generality of the power, the provisions as to the time when, and the circumstances in which, credit for input tax is to be allowed) as appear to the Commissioners necessary or expedient.
.
#### Credit for input tax
##### 12
- (1) In section 15 of the principal Act, for subsections (1) to (3) there shall be substituted—
> (1) The amount of input tax for which a taxable person is entitled to credit at the end of any period shall be so much of the input tax for the period (that is input tax on supplies and importations in the period) as is allowable by or under regulations as being attributable to supplies within subsection (2) below.
> (2) The supplies within this subsection are the following supplies made or to be made by the taxable person in the course or furtherance of his business—
> (a) taxable supplies;
> (b) supplies outside the United Kingdom which would be taxable supplies if made in the United Kingdom;
> (c) supplies which section 35 below provides are to be disregarded for the purposes of this Act and which would otherwise be taxable supplies.
> (3) The Commissioners shall make regulations for securing a fair and reasonable attribution of input tax to supplies within subsection (2) above, and any such regulations may provide for—
> (a) determining a proportion by reference to which input tax for any prescribed accounting period is to be provisionally attributed to those supplies;
> (b) adjusting, in accordance with a proportion determined in like manner for any longer period comprising two or more prescribed accounting periods or parts thereof, the provisional attribution for any of those periods; and
> (c) the making of payments in respect of input tax, by the Commissioners to a taxable person (or a person who has been a taxable person) or by a taxable person (or a person who has been a taxable person) to the Commissioners, in cases where events prove inaccurate an estimate on the basis of which an attribution was made.
.
- (2) In section 6(1) of that Act, for the words "the charge to tax" there shall be substituted the words "this Act".
- (3) In section 35(1) and (2) of that Act, for the words "shall be disregarded" there shall be substituted the words "shall, except where the contrary intention appears, be disregarded".
- (4) This section shall have effect in relation to supplies and importations made on or after 1st April 1987, and shall be deemed to have come into force on 23rd March 1987.
#### Supplies abroad etc.
##### 13
- (1) The principal Act shall be amended as follows.
- (2) In section 2(5), at the end there shall be added the words ", and a person who is registered under paragraph 11A of that Schedule is a taxable person (notwithstanding that he does not make and does not intend to make taxable supplies)".
- (3) In section 48(1), for the definition of "taxable person" there shall be substituted—
> - 'taxable person' means a person who is a taxable person under section 2(2) or (5) above;
.
- (4) In Schedule 1, after paragraph 11 there shall be inserted—
> (11A)
> (1) Where a person satisfies the Commissioners that he is within sub-paragraph (2) below, they may, if he so requests and they think fit, register him from such date and subject to such conditions as they think fit.
> (2) A person is within this sub-paragraph if—
> (a) he has a business establishment in the United Kingdom or his usual place of residence is in the United Kingdom;
> (b) he does not make and does not intend to make taxable supplies; and
> (c) he makes or intends to make in the course or furtherance of his business supplies within sub-paragraph (3) below.
> (3) A supply is within this sub-paragraph if—
> (a) it is made outside the United Kingdom but it would be a taxable supply if made in the United Kingdom; or
> (b) section 35 of this Act provides that it is to be disregarded for the purposes of this Act, and it would otherwise be a taxable supply.
> (4) The Commissioners may at any time, if they think fit, cancel as from that time the registration of a person who is not liable to be registered and whose registration was effected under this paragraph.
> (5) A registered person whose registration was effected under this paragraph shall, if he makes or forms the intention of making taxable supplies, notify the Commissioners within thirty days that he has done so or formed the intention of doing so.
> (6) Conditions under sub-paragraph (1) above—
> (a) may be imposed wholly or partly by reference to, or without reference to, any conditions prescribed for the purposes of this paragraph; and
> (b) may (whenever imposed) be subsequently varied by the Commissioners.
> (7) Where the Commissioners refuse to act on a request made by a person under sub-paragraph (1) above, or where they cancel a person's registration under sub-paragraph (4) above, they shall give him written notice of their decision and of the grounds on which it was made.
> (8) For the purposes of this paragraph—
> (a) a person carrying on a business through a branch or agency in the United Kingdom shall be treated as having a business establishment in the United Kingdom; and
> (b) 'usual place of residence', in relation to a body corporate, means the place where it is legally constituted.
.
- (5) In Schedule 5, item 2 of and Note (1) to Group 15 shall cease to have effect.
#### Registration
##### 14
- (1) Schedule 1 to the principal Act shall be amended as follows.
- (2) For paragraph 1 there shall be substituted—
> (1)
> (1) Subject to sub-paragraphs (2) to (5) below, a person who makes taxable supplies but is not registered is liable to be registered—
> (a) after the end of any quarter, if the value of his taxable supplies—
> (i) in that quarter has exceeded £7,250; or
> (ii) in the four quarters then ending has exceeded £21,300; or
> (b) at any time, if there are reasonable grounds for believing that the value of his taxable supplies in the period of one year then beginning will exceed £21,300.
> (2) A person is not liable to be registered by virtue of sub-paragraph (1)(a)(i) above after the end of any quarter if the Commissioners are satisfied that the value of his taxable supplies in that quarter and the next three quarters will not exceed £21,300.
> (3) A person is not liable to be registered by virtue of sub-paragraph (1)(a)(ii) above after the end of any quarter if the Commissioners are satisfied that the value of his taxable supplies in the next four quarters will not exceed £20,300.
> (4) In determining the value of a person's supplies for the purposes of sub-paragraph (1)(a) above, supplies made at a time when he was previously registered shall be disregarded if—
> (a) his registration was cancelled otherwise than under paragraph 10 below, and
> (b) the Commissioners are satisfied that before his registration was cancelled he had given them all the information they needed in order to determine whether to cancel the registration.
> (5) In determining the value of a person's supplies for the purposes of sub-paragraph (1) above, supplies of goods that are capital assets of the business in the course or furtherance of which they are supplied shall be disregarded.
.
- (3) For paragraph 2 there shall be substituted—
> (2)
> (1) Subject to sub-paragraph (2) below, a registered person who makes taxable supplies shall cease to be liable to be registered at any time if the Commissioners are satisfied that the value of his taxable supplies in the period of one year then beginning will not exceed £20,300.
> (2) A person shall not cease to be liable to be registered by virtue of sub-paragraph (1) above if the Commissioners are satisfied that the reason the value of his taxable supplies will not exceed £20,300 is that in the period in question he will cease making taxable supplies, or will suspend making them for a period of thirty days or more.
> (3) In determining the value of a person's supplies for the purposes of sub-paragraph (1) above, supplies of goods that are capital assets of the business in the course or furtherance of which they are supplied shall be disregarded.
.
- (4) For paragraph 3 there shall be substituted—
> (3)
> (1) A person who by virtue of paragraph 1(1)(a) above is liable to be registered after the end of any quarter shall notify the Commissioners of that liability within thirty days of the end of that quarter.
> (2) The Commissioners shall register any such person (whether or not he so notifies them) with effect from the end of the month in which the thirtieth day falls or from such earlier date as may be agreed between them and him.
.
- (5) For paragraph 4 there shall be substituted—
> (4)
> (1) A person who by virtue of paragraph 1(1)(b) above is liable to be registered by reason of the value of his taxable' supplies in any period shall notify the Commissioners of that liability within thirty days of the beginning of that period.
> (2) Subject to sub-paragraph (3) below, the Commissioners shall register any such person (whether or not he so notifies them) with effect from the end of the thirty days or from such earlier date as may be agreed between them and him.
> (3) Where there are reasonable grounds for believing that the value of such a person's taxable supplies in the first thirty days of the period will exceed £21,300, the Commissioners may, if they think fit, register him with effect from the beginning of the period.
.
- (6) Paragraph 6 shall cease to have effect.
- (7) For paragraph 7 there shall be substituted—
> (7)
> (1) A registered person who ceases to make taxable supplies shall notify the Commissioners of that fact within thirty days of the day on which he does so.
> (2) Subject to sub-paragraph (3) below, the Commissioners shall cancel the registration of a registered person who ceases to make taxable supplies with effect from the day on which he so ceases or from such later date as may be agreed between them and him.
> (3) The Commissioners shall not be under a duty to cancel the registration of such a person (although they may cancel it if they think fit) if they are satisfied that he is (on ceasing to make taxable supplies) within paragraph 11 A(2) below.
.
- (8) In paragraph 9, for the words "paragraph 2(b)" there shall be substituted the words "paragraph 2".
- (9) In paragraph 11, for sub-paragraph (2) there shall be substituted—
> (2) Where there is a material change in the nature of the supplies made by a person exempted from registration under sub-paragraph (1)(a) above he shall notify the Commissioners of the change—
> (a) within thirty days of the day on which it occurred; or
> (b) if no particular day is identifiable as the day on which it occurred, within thirty days of the end of the quarter in which it occurred.
> (2AA) Where there is a material alteration in any quarter in the proportion of taxable supplies of such a person that are zero-rated, he shall notify the Commissioners of the alteration within thirty days of the end of the quarter.
.
- (10) For paragraph 13 there shall be substituted—
> (13) The value of a supply of goods or services shall be determined for the purposes of this Schedule on the basis that no tax is chargeable on the supply.
.
#### Supplies to groups
##### 15
- (1) In the principal Act, after section 29 there shall be inserted—
> (29A)
> (1) Subject to subsections (2) and (3) below, subsection (4) below applies where—
> (a) a business, or part of a business, carried on by a taxable person is transferred as a going concern to a body corporate treated as a member of a group under section 29 above;
> (b) on the transfer of the business or part, chargeable assets of the business are transferred to the body corporate; and
> (c) the transfer of the assets is treated by virtue of section 3(3)(c) above as neither a supply of goods nor a supply of services.
> (2) Subsection (4) below shall not apply if the representative member of the group is entitled to credit for the whole of the input tax on supplies to it and importations by it—
> (a) during the prescribed accounting period in which the assets are transferred, and
> (b) during any longer period to which regulations under section 15(3)(b) above relate and in which the assets are transferred.
> (3) Subsection (4) below shall not apply if the Commissioners are satisfied that the assets were acquired by the taxable person transferring them more than three years before the day on which they are transferred.
> (4) The chargeable assets shall be treated for the purposes of this Act as being, on the day on which they are transferred, both supplied to the representative member of the group for the purpose of its business and supplied by that member in the course or furtherance of its business.
> (5) A supply treated under subsection (4) above as made by a representative member shall not be taken into account as a supply made by him when determining the allowance of input tax in his case under section 15 above.
> (6) The value of a supply treated under subsection (4) above as made to or by a representative member shall be taken to be the open market value of the chargeable assets.
> (7) For the purposes of this section, the open market value of any chargeable assets shall be taken to be the price that would be paid on a sale (on which no tax is payable) between a buyer and a seller who are not in such a relationship as to affect the price.
> (8) The Commissioners may reduce the tax chargeable by virtue of subsection (4) above in a case where they are satisfied that the person by whom the chargeable assets are transferred has not received credit for the full amount of input tax arising on the acquisition by him of the chargeable assets.
> (9) For the purposes of this section, assets are chargeable assets if their supply in the United Kingdom by a taxable person in the course or furtherance of his business would be a taxable supply (and not a zero-rated supply).
.
- (2) This section shall have effect in relation to transfers of assets made on or after 1st April 1987, and shall be deemed to have come into force on 23rd March 1987.
#### Tour operators
##### 16
- (1) After section 37 of the principal Act there shall be added—
> (37A)
> (1) The Treasury may by order modify the application of this Act in relation to supplies of goods or services by tour operators or in relation to such of those supplies as may be determined by or under the order.
> (2) Without prejudice to the generality of subsection (1) above, an order under this section may make provision—
> (a) for two or more supplies of goods or services by a tour operator to be treated as a single supply of services;
> (b) for the value of that supply to be ascertained, in such manner as may be determined by or under the order, by reference to the difference between sums paid or payable to and sums paid or payable by the tour operator;
> (c) for account to be taken, in determining the tax chargeable on that supply, of the different rates of tax that would have been applicable apart from this section;
> (d) excluding any body corporate from the application of section 29 above;
> (e) as to the time when a supply is to be treated as taking place.
> (3) In this section 'tour operator' includes a travel agent acting as principal and any other person providing for the benefit of travellers services of any kind commonly provided by tour operators or travel agents.
> (4) Section 45(3) below shall not apply to an order under this section, notwithstanding that it makes provision for excluding any tax from credit under section 14 above.
.
- (2) In section 45 of that Act, at the beginning of subsection (4) there shall be inserted the words "Subject to section 37A(4) above".
#### Valuation of supplies at less than market value
##### 17
- (1) In Schedule 4 to the principal Act, at the beginning of paragraph 1(1 )(c) there shall be inserted the words "if the supply is a taxable supply,".
- (2) This section shall have effect in relation to supplies made on or after 1st April 1987, and shall be deemed to have come into force on 23rd March 1987.
#### Issue of securities
##### 18
- (1) In Schedule 6 to the principal Act (exemptions), in Group 5 (finance)—
- (a) at the end of item 5 there shall be added the words "or the underwriting of an issue within item 1"; and
- (b) after item 6 there shall be inserted the following item—
> (6A) The making of arrangements for, or the underwriting of, an issue within item 6.
.
- (2) This section shall have effect in relation to supplies made on or after 1st April 1987, and shall be deemed to have come into force on 23rd March 1987.
#### Interpretation and miscellaneous further amendments
##### 19
- (1) In this Chapter "the principal Act" means the Value Added Tax Act 1983.
- (2) The principal Act shall have effect subject to the further amendments in Schedule 2 to this Act; and the amendment in that Schedule of section 7 of the principal Act shall have effect with respect to services supplied on or after 1st April 1987.
## Part II — Income Tax, Corporation Tax and Capital Gains Tax
### Chapter I — General
@@ -458,21 +220,7 @@
#### Charge of income tax for 1987-88
##### 20
- (1) Income tax for the year 1987-88 shall be charged at the basic rate of 27 per cent.; and in respect of so much of an individual's total income as exceeds the basic rate limit (£17,900) at such higher rates as are specified in the Table below:
| Higher rate bands | Higher rate |
| --- | --- |
| The first £2,500 | 40 per cent. |
| The next £5,000 | 45 per cent. |
| The next £7,900 | 50 per cent. |
| The next £7,900 | 55 per cent. |
| The remainder | 60 per cent. |
and paragraphs (a) .and (b) of subsection (1) of section 32 of the Finance Act 1971 (charge of tax at the basic and higher rates) shall have effect accordingly.
- (2) Section 24(4) of the Finance Act 1980 (indexation of thresholds) shall not, so far as it relates to the higher rate bands, apply for the year 1987-88.
##### 20–39
#### Charge of corporation tax for financial year 1987
@@ -863,60 +611,9 @@
##### 40
- (1) For section 358 of the Taxes Act there shall be substituted—
> (358) In this Act—
> - 'authorised unit trust' means, as respects an accounting period, a unit trust scheme in the case of which an order under section 78 of the Financial Services Act 1986 is in force during the whole or part of the accounting period;
> - 'unit holder' means a person entitled to a share of the investments subject to the trusts of a unit trust scheme;
> - 'unit trust scheme' has the same meaning as in section 354A of this Act.
.
- (2) In section 526(5) of the Taxes Act the following definitions shall be inserted at the appropriate places in alphabetical order—
> - 'authorised unit trust' has the meaning given by section 358 of this Act
;
> - " 'unit holder', in relation to a unit trust scheme, has the meaning given by section 358 of this Act
;
> - " 'unit trust scheme' has the same meaning as in section 354A of this Act
.
- (3) In section 92 of the Capital Gains Tax Act 1979, for the words from the beginning of the section to the end of paragraph (a) there shall be substituted—
> (1) Subject to subsection (2) below, in this Act—
> (a) 'unit trust scheme' has the same meaning as in the Financial Services Act 1986
.
- (4) At the end of section 92 of the Capital Gains Tax Act 1979 there shall be added—
> (2) The Treasury may by regulations provide that any scheme of a description specified in the regulations shall be treated as not being a unit trust scheme for the purposes of this Act.
> (3) Regulations under this section—
> (a) may contain such supplementary and transitional provisions as appear to the Treasury to be necessary or expedient, and
> (b) shall be made by statutory instrument, which shall be subject to annulment in pursuance of a resolution of the House of Commons.
.
- (5) This section, and the repeals effected by section 72 below and Part VI of Schedule 16 to this Act, shall come into force on such day as the Board may by order appoint; and different days may be appointed for different purposes.
- (6) An order under subsection (5) above—
- (a) may contain such transitional provisions as appear to the Board to be necessary or expedient, and
- (b) shall be made by statutory instrument.
#### Investment companies, etc.
##### 41
- (1) In section 304(1) of the Taxes Act, for the words "income for the purposes of Schedule A "'there shall be substituted the words "profits apart from this section".
- (2) This section shall have effect in relation to sums disbursed on or after 1st April 1987.
##### 41–46
### Business expansion scheme
@@ -1107,16 +804,12 @@
> (c) that, by virtue of any material arrangements, the holder has a right to require another person to acquire the shares or is obliged in any circumstances to dispose of them or another person has a right or is in any circumstances obliged to acquire them.
> (5) For the purposes of paragraph (a) of subsection (4) above, shares are to be treated as carrying a preferential entitlement to a dividend as against other shares if, by virtue of any arrangements, there are circumstances in which a minimum dividend will be payable on those shares but not on others; and for the purposes of paragraph (c) of that subsection arrangements relating to shares are material arrangements if the company which issued the shares or a company associated with that company is a party to the arrangements.
### Chapter II — Capital Gains
### Chapter II
#### Retirement relief
##### 47
- (1) In Schedule 20 to the Finance Act 1985 (relief for certain disposals associated with retirement) in paragraphs 13(1) (the amount available for relief) and 16(4)(b) (aggregation of spouse's interest in the business) for "£100,000" there shall be substituted "£125,000".
- (2) Subsection (1) above has effect with respect to qualifying disposals (within the meaning of the said Schedule 20) occurring on or after 6th April 1987.
## Part III — Stamp Duty and Stamp Duty Reserve Tax
### Stamp duty
@@ -1125,15 +818,15 @@
##### 48
In section 57 of the Finance Act 1946 and in section 28 of the Finance (No. 2) Act (Northern Ireland) 1946—
- (a) for the definition in subsection (1) of "unit trust scheme" there shall be substituted—
> - 'unit trust scheme' has the same meaning as in the Financial Services Act 1986 (but subject to subsection (1A) of this section)
—In section of the Finance Act 1946 and in section 28 of the Finance (No. 2) Act (Northern Ireland) 1946—
- (a) for the definition in subsection (1) of “unit trust scheme” there shall be substituted—
> “*unit trust scheme*” has the same meaning as in the Financial Services Act 1986 (but subject to subsection (1A) of this section)
;
- (b) in the definition in subsection (1) of "trust instrument", for the words from "by virtue" to "aforesaid" there shall be substituted the words "on which the property in question is held";
- (b) in the definition in subsection (1) of “trust instrument”, for the words from “by virtue” to “aforesaid” there shall be substituted the words “ on which the property in question is held ”;
- (c) after subsection (1) there shall be inserted—
@@ -1148,61 +841,45 @@
##### 49
- (1) Sections 77 to 79 of the Finance (1909-10) Act 1910, so far as unrepealed, shall cease to have effect.
- (2) Subsection (1) above shall come into force on such day as the Treasury may appoint by order made by statutory instrument.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Warrants to purchase Government stock, etc.
##### 50
- (1) Where an interest in, a right to an allotment of or to subscribe for, or an option to acquire, exempt securities is transferred to or vested in any person by any instrument, no stamp duty shall be chargeable on the instrument by virtue of either of the following headings in Schedule 1 to the Stamp Act 1891—
- (a) "Conveyance or Transfer on Sale";
- (b) "Conveyance or Transfer of any kind not hereinbefore described".
- (2) No stamp duty under the heading "Bearer Instrument" in Schedule 1 to the Stamp Act 1891 shall be chargeable—
- (1) Where an interest in, a right to an allotment of or to subscribe for, or an option to acquire or to dispose of, exempt securities is transferred to or vested in any person by any instrument, no stamp duty shall be chargeable on the instrument by virtue of either of the following headings in Schedule 1 to the Stamp Act 1891 — Part I, or paragraph 16, of Schedule 13 to the Finance Act 1999 (conveyance or transfer on sale or otherwise)
- (2) No stamp duty under Schedule 15 to the Finance Act 1999 (bearer instruments) shall be chargeable —
- (a) on the issue of an instrument which relates to such an interest, right or option as is mentioned in subsection (1) above, or
- (b) on the transfer of the interest, right or option constituted by, or transferable by means of, such an instrument.
- (3) For the purposes of this section, "exempt securities" means—
- (3) For the purposes of this section, “*exempt securities*” means —
- (a) securities the transfer of which is exempt from all stamp duties,
- (b) securities constituted by or transferable by means of an instrument the issue of which is by virtue of section 30 of the Finance Act 1967 or section 7 of the Finance Act (Northern Ireland) 1967 exempt from stamp duty under the heading "Bearer Instrument" in Schedule 1 to the Stamp Act 1891, or
- (c) securities the transfer of which is exempt by virtue of section 30 of the Finance Act 1967 or section 7 of the Finance Act (Northern Ireland) 1967 from stamp duty under that heading;
and "securities" means stock or marketable securities and includes loan capital as defined in section 78(7) of the Finance Act 1986.
- (4) Subsection (1) above applies to any instrument executed on or after 1st August 1987.
- (5) Subsection (2) above applies—
- (a) to any instrument which falls within section 60(1) of the Finance Act 1963, or section 9(1 )(a) of the Finance Act (Northern Ireland) 1963, and is issued on or after 1st August 1987, and
- (b) to any instrument which falls within section 60(2) of the Finance Act 1963, or section 9(1 )(b) of the Finance Act (Northern Ireland) 1963, if the interest, right or option constituted by or transferable by means of it is transferred on or after 1st August 1987.
- (b) securities constituted by or transferable by means of an instrument the issue of which is by virtue of section 30 of the Finance Act 1967 or section 7 of the Finance Act (Northern Ireland) 1967 or section 79(2) of the Finance Act 1986 exempt from stamp duty under the heading “Bearer Instrument” in Schedule 1 to the Stamp Act 1891 , or
- (c) securities the transfer of which is exempt by virtue of section 30 of the Finance Act 1967 or section 7 of the Finance Act (Northern Ireland) 1967 or section 79(2) of the Finance Act 1986 from stamp duty under that heading;
and “*securities*” means stock or marketable securities and includes loan capital as defined in section 78(7) of the Finance Act 1986 .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Bearer instruments relating to stock in foreign currencies
##### 51
- (1) With respect to the issue of instruments and the transfer of stock on or after the day on which this Act is passed, section 30 of the Finance Act 1967 (stamp duty exemption for bearer instruments relating to stock in foreign currencies) and section 7 of the Finance Act (Northern Ireland) 1967 (the equivalent provision for Northern Ireland) shall have effect subject to the amendments in subsections (2) to (4) below.
- (2) In subsection (1) for the words "in the currency of a territory outside the scheduled territories" there shall be substituted "in any currency other than sterling or in any units of account defined by reference to more than one currency (whether or not including sterling)".
- (3) In subsection (2) for the words from "between" to "other currencies" there shall be substituted "between sterling and one or more other currencies".
- (4) Subsection (4) and, in subsection (5), the definition of "the scheduled territories" shall cease to have effect.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Clearance services
##### 52
- (1) In section 70(6) of the Finance Act 1986 (transfer of securities to clearance system), for the word "relevant" (in each place where it occurs) there shall be substituted the words "shares, stock or other marketable".
- (1) In section 70(6) of the Finance Act 1986 (transfer of securities to clearance system), for the word “relevant” (in each place where it occurs) there shall be substituted the words “shares, stock or other marketable”.
- (2) The amendments made by this section have effect in relation to instruments executed on or after 1st August 1987.
@@ -1210,7 +887,7 @@
##### 53
In section 82(6) of the Finance Act 1986, for the words "subsection (3)" there shall be substituted the words "subsection (4)".
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Shared ownership transactions
@@ -1218,9 +895,9 @@
- (1) In section 97 of the Finance Act 1980 (which provides for certain leases to be stamped as conveyances) in subsection (3)(b)—
- (a) for the words "registered under" there shall be substituted the words "within the meaning of, and
- (b) for the words "Article 124" there shall be substituted the words "Part VII".
- (a) for the words “registered under” there shall be substituted the words “ within the meaning of ”, and
- (b) for the words “Article 124” there shall be substituted the words “ Part VII ”.
- (2) Section 97 of the Finance Act 1980 and section 108(5) and (6) of the Finance Act 1981 shall apply to a lease within subsection (3) below as they apply to a lease granted by a body mentioned in section 97(3) of the Finance Act 1980.
@@ -1228,27 +905,27 @@
- (a) by a person against whom the right to buy under Part V of the Housing Act 1985 is exercisable by virtue of section 171A of that Act (preservation of right to buy on disposal to private sector landlord), and
- (b) to a person who is the qualifying person for the purposes of the preserved right to buy and in relation to whom that dwelling-house is the qualifying dwelling-house.
- (4) This section applies to leases granted on or after 1st August 1987.
- (b) to a person who is the qualifying person for the purposes of the preserved right to buy and in relation to whom that dwelling-house is the qualifying dwelling-house.(4) This section applies to leases granted on or after 1st August 1987.
#### Crown exemption
##### 55
- (1) Where any conveyance, transfer or lease is made or agreed to be made to a Minister of the Crown or to the Solicitor for the affairs of Her Majesty's Treasury, no stamp duty shall be chargeable by virtue of any of the following headings in Schedule 1 to the Stamp Act 1891—
- (a) "Conveyance or Transfer on Sale",
- (b) "Conveyance or Transfer of any kind not hereinbefore described",
- (c) "Lease or Tack",
on the instrument by which the conveyance, transfer or lease, or the agreement for it, is effected.
- (2) In this section "Minister of the Crown" has the same meaning as in the Ministers of the Crown Act 1975.
- (3) Article 3(6) of the Secretary of State for the Environment Order 1970 and Article 4(5) of the Secretary of State for Transport Order 1976 (which exempt transfers by, to or with those Ministers) shall cease to have effect.
- (1) Where any conveyance, transfer or lease is made or agreed to be made
- (a) to a Minister of the Crown or
- (b) to the solicitor for the affairs of Her Majesty’s Treasury, or
- (c) to the National Assembly for Wales,or
- (d) to the Northern Ireland Assembly Commission
no stamp duty shall be chargeable under Part I or II, paragraph 16, of Schedule 13 to the Finance Act 1999 on the instrument by which the conveyance, transfer or lease, or the agreement for it is effected.
- (2) In this section “*Minister of the Crown*” has the same meaning as in the Ministers of the Crown Act 1975.
- (3) Article 3(6) of the Secretary of State for the Environment Order 1970 and Article 4(5) of the Secretary of State for Transport Order 1976 (which excempt transfers by, to or with those Ministers) shall cease to have effect.
- (4) This section applies to instruments executed on or after 1st August 1987.
@@ -1258,7 +935,7 @@
##### 56
Schedule 7 to this Act (which contains miscellaneous amendments of Part IV of the Finance Act 1986) shall have effect.
Schedule 7 to this Act (which contains miscellaneous amendments of Part IV of the Finance Act 1986 ) shall have effect.
## Part IV — Inheritance Tax
@@ -1266,19 +943,20 @@
##### 57
- (1) In the Inheritance Tax Act 1984 (in this Part of this Act referred to as "the 1984 Act") section 8(1) (indexation of rate bands) shall not apply to chargeable transfers made in the year beginning 6th April 1987.
- (1) In the Inheritance Tax Act 1984 (in this Part of this Act referred to as “*the 1984 Act*”) section 8(1) (indexation of rate bands) shall not apply to chargeable transfers made in the year beginning 6th April 1987.
- (2) For the Table in Schedule 1 to that Act there shall be substituted the Table set out below:
| Portion of value | Portion of value | Rate of tax |
| --- | --- | --- |
| Lower limit | Upper limit | Per cent. |
| *Lower limit* | *Upper limit* | *Per cent* |
| £ | £ | |
| Lower Limit £ | Upper Limit £ | Per cent. |
| 0 | 90,000 | Nil |
| 90,000 | 140,000 | 30 |
| 140,000 | - 220,000 | 40 |
| 140,000 | 220,000 | 40 |
| 220,000 | 330,000 | 50 |
| 330,000 | — | 60 |
| 330,000 | | 60 |
- (3) Subsection (2) above applies to any chargeable transfer (within the meaning of the 1984 Act) made on or after 17th March 1987.
@@ -1288,7 +966,7 @@
- (1) The 1984 Act and Schedule 20 to the Finance Act 1986 (gifts with reservation) shall have effect subject to the amendments in Schedule 8 to this Act, being amendments—
- (a) making provision with respect to the treatment for the purposes of the 1984 Act of shares and securities dealt in on the Unlisted Securities Market;
- (a) making provisions with respect to the treatment for the purposes of the 1984 Act of shares and securities dealt in on the Unlisted Securities Market;
- (b) making other amendments of Chapter I of Part V of the 1984 Act (business property);
@@ -1310,7 +988,7 @@
##### 60
- (1) In section 233 of the 1984 Act (interest on unpaid tax) in subsection (1), at the beginning of the words following paragraph (c) there shall be inserted the words "then, subject to subsection (1A) below".
- (1) In section 233 of the 1984 Act (interest on unpaid tax) in subsection (1), at the beginning of the words following paragraph (c) there shall be inserted the words “ then, subject to subsection (1A) below ”.
- (2) After subsection (1) of that section there shall be inserted the following subsection—
@@ -1324,7 +1002,7 @@
##### 61
- (1) The provisions of Schedule 10 to this Act shall have effect, being provisions for and in connection with the establishment of a scheme of nominations by participators in oil fields of certain proposed sales, supplies and appropriations of oil.
- (1) The provisions of Schedule 10 to this Act shall have effect, being provisions for and in connection with the establishment of a scheme of nominations by participators in oil fields of certain proposed sales ... of oil.
- (2) Nothing in this section or Schedule 10 to this Act applies—
@@ -1336,40 +1014,38 @@
and references to oil in this section and Schedule 10 to this Act shall be construed accordingly.
- (3) As respects each participator in an oil field, it shall be determined, for each calendar month in a chargeable period beginning with the month of March 1987, whether his aggregate nominated proceeds, as defined in Schedule 10 to this Act, exceed the proceeds of his disposals and appropriations in that month, as defined in subsection (6) below and, if they do, that excess shall be brought into account in accordance with subsection (5) below.
- (4) For each chargeable period of an oil field, "the excess of nominated proceeds for the period", in relation to a participator in that field, means the sum of the excess (if any) of each of the months in that chargeable period, as determined in his case under subsection (3) above.
- (5) In subsection (5) of section 2 of the principal Act (amounts to be taken into account in determining whether a gross profit or loss accrues to a participator in any chargeable period) at the end of paragraph (d) there shall be added
> and
- (3) If the market value of a relevant delivery ascertained in accordance with Schedule 3 to the principal Act exceeds a participator's delivery proceeds of a relevant delivery (within the meaning given by Schedule 10), the excess shall be brought into account by him in accordance with section 2(5)(e) of the principal Act.
- (4) If a relevant delivery is a delivery of blended oil within the meaning of section 63, regulations under section 2(5B) of the principal Act shall apply for the purposes of determining the proportion of the excess attributable to a field.
- (4A) For each month in which a participator makes a relevant delivery, his monthly excess is the sum of his excesses (if any) calculated in accordance with subsection (3).
- (4B) For each chargeable period of an oil field “*the excess of nominated proceeds for the period*” means, in relation to a participator in the oil field, that proportion of the sum of his monthly excesses for the chargeable period (if any) which is attributable to the field.
- (5) In subsection (5) of section 2 of the principal Act (amounts to be taken into account in determining whether a gross profit or loss accures to a participator in any chargeable period) at the end of paragraph (d) there shall be added
> and”
> (e) the excess of the nominated proceeds for that period, as defined in section 61 of the Finance Act 1987.
- (6) In relation to any calendar month, the proceeds of a participator's disposals and appropriations from an oil field means the total of—
- (a) the price received or receivable for so much of any oil forming part of his equity production from the field in that month as was disposed of by him crude in sales at arm's length; and
- (b) the market value, ascertained in accordance with Schedule 3 to the principal Act, of the rest of his equity production from the field in that month;
and in this subsection any reference to a participator's equity production from an oil field in any month shall be construed in accordance with paragraph 1(2) of Schedule 10 to this Act.
- (7) The Treasury may by regulations made by statutory instrument make provision for any purpose for which regulations described as "Treasury regulations" may be made under Schedule 10 to this Act.
- (8) The Board may by regulations made by statutory instrument make provision, including provision having effect with respect to things done on or after 9th February 1987,—
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) The Board may by regulations made by statutory instrument make provision, including provision having effect with respect to things done on or after 1st July 2006,—
- (a) as to oil which is excluded from this section, as mentioned in subsection (2) above; and
- (b) for any purpose for which regulations, other than those described as "Treasury regulations", may be made under Schedule 10 to this Act;
- (b) for any purpose for which regulations, other than those described as “*Treasury regulations*”, may be made under Schedule 10 to this Act;
and regulations made by virtue of paragraph (a) above may amend paragraphs (a) and (b) of subsection (2) above.
- (9) A statutory instrument made in the exercise of the power conferred by subsection (7) or subsection (8) above shall be subject to annulment in pursuance of a resolution of the Commons House of Parliament.
- (9) A statutory instrument made in the exercise of the power conferred by ... subsection (8) above shall (unless otherwise expressly provided) be subject to annulment in pursuance of a resolution of the Commons House of Parliament.
#### Market value of oil to be determined on a monthly basis
##### 62
- (1) In the following provisions of the principal Act (which refer to the market value of oil at the material time in a particular calendar month) the words "at the material time" shall be omitted—
- (1) In the following provisions of the principal Act (which refer to the market value of oil at the material time in a particular calendar month) the words “*at the material time*” shall be omitted—
- (a) in section 2 (assessable profits and allowable losses), in subsection (9), paragraphs (a)(i) and (a)(ii);
@@ -1379,19 +1055,19 @@
- (d) in paragraph 2 of Schedule 2 (returns by participators), sub-paragraphs (2)(a)(iii) and (2)(b)(ii).
- (2) In the following provisions of the principal Act (which refer to the market value of stocks of oil at the end of a chargeable period) for the words "at the end" there shall be substituted "in the last calendar month"—
- (2) In the following provisions of the principal Act (which refer to the market value of stocks of oil at the end of a chargeable period) for the words “at the end” there shall be substituted “ in the last calendar month” ”
- (a) section 2(4)(b);
- (b) section 2(5)(d); and
- (c) in Schedule 2, paragraph 2(2)(d)(ii);
and in the provisions specified in paragraphs (a) and (b) above for the word "then" there shall be substituted "at the end of that period".
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
and in the provisions specified in paragraphs (a) and (b) above for the word “then” there shall be substituted “ at the end of that period ”.
- (3) In Schedule 3 to the principal Act (miscellaneous provisions relating to petroleum revenue tax) paragraphs 2, 2A and 3 (market value of oil) shall be amended in accordance with Part I of Schedule 11 to this Act; and the consequential amendments of the principal Act in Part II of that Schedule shall have effect.
- (4) A participator in an oil field who is required by paragraph 2 of Schedule 2 to the principal Act to deliver to the Board a return for a chargeable period shall, not later than the end of the second month after the end of that period, deliver to the Board an additional return of all relevant sales of oil (as defined in subsection (6) below) stating—
- (4) In any case where paragraph 2 of Schedule 2 to the principal Act requires a participator in any oil field to make a return for any chargeable period (including cases where the latest time for the delivery of that return is deferred), that participator shall also be required, not later than the end of the second month after the end of that chargeable period, to deliver to the Board a return of all relevant sales of oil (as defined in subsection (6) below) stating—
- (a) the date of the contract of sale;
@@ -1399,7 +1075,7 @@
- (c) the name of the buyer;
- (d) the quantity of oil actually sold and, if it is different, the quantity of oil contracted to be sold;
- (d) the quantity od oil actually sold and, if it is different, the quantity of oil contracted to be sold;
- (e) the price receivable for that oil;
@@ -1407,13 +1083,13 @@
- (g) such other particulars as the Board may prescribe.
- (5) Where two or more companies which are participators in the same oil field are members of the same group of companies, within the meaning of section 258 of the Taxes Act, a return made for the purposes of subsection (4) above by one of them and expressed also to be made on behalf of the other or others shall be treated for the purposes of this section as a return made by each of them.
- (6) For the purposes of the return required by subsection (4) above from a participator in an oil field, a relevant sale of oil is a contract for the sale of oil to which the participator or any company which is resident in the United Kingdom and associated with the participator for the purposes of section 115(2) of the Finance Act 1984 is a party (as seller, buyer or otherwise), being a sale of oil—
- (a) for delivery at any time during the chargeable period referred to in subsection (4) above; and
- (b) details of which are not included in the return made for the period under paragraph 2 of Schedule 2 to the principal Act (by virtue of sub-paragraph (3A) thereof); and
- (5) Where two or more companies which are participators in the same oil field are members of the same group of companies, within the meaning of section 413 of the Taxes Act, a return made for the purposes of subsection (4) above by one of them and expressed also to be made on behalf of the other or others shall be treated for the purposes of this section as a return made by each of them.
- (6) For the purposes of the return required by subsection (4) above from a participator in an oil field, a relevant sale of oil is a contract for the sale of oil at arm’s length to which the participator or any company which is resident in the United Kingdom and associated with the participator for the purposes of section 115(2) of the Finance Act 1984 is a party (as seller, buyer or otherwise), being a sale of oil—
- (a) for delivery at anyu time during the chargeable period referred to in subsection (4) above; and
- (b) details of which are not included in a return for the period under paragraph 2 of Schedule 2 to the principal Act which is delivered to the Board at the same time as the return required by subsection (4) above or which was delivered to them previously; and
- (c) which is for the delivery of at least 500 metric tonnes of oil; and
@@ -1437,11 +1113,21 @@
- (1) If, at any time prior to its disposal or relevant appropriation, oil won from an oil field is mixed with oil won from another oil field, the provisions of this section shall have effect to determine what is the share of a participator in one of those fields of the oil won from that field in any chargeable period ending after 1st January 1987; and in the following provisions of this section—
- (a) "blended oil" means oil which has been so mixed; and
- (b) "the originating fields" means the oil fields from which the blended oil is derived.
- (2) If, for the purposes of commerce, blended oil is allocated to the participators in the originating fields in accordance with an agreed method, then, subject to the following provisions of this section, for the purposes of the oil taxation legislation, the blended oil which, in accordance with that method, is allocated to a participator in one of the originating fields in respect of any chargeable period shall be taken to be that participator's share of the oil won from that field in that period.
- (a) “*blended oil*” means oil which has been so mixed; and
- (b) “*the originating fields*” means the oil fields from which the blended oil is derived.
- (1A) In this section—
- (a) “*oil field*” includes an area which is a foreign field for the purposes of section 12 of the Oil Taxation Act 1983;
- (b) “*oil*” includes any substance which would be oil if the enactments mentioned in section 1(1) of the principal Act extended to such an area as is referred to in paragraph (a) above;
- (c) “*blended oil*” means oil which has been mixed as mentioned in subsection (1) above; and
- (d) “*the originating fields*”, in relation to any blended oil, means the oil fields from which the blended oil is derived.
- (2) If, for the purposes of commerce, blended oil is allocated to the participators in the originating fields in accordance with an agreed method, then, subject to the following provisions of this section, for the purposes of the oil taxation legislation, the blended oil which, in accordance with that method, is allocated to a participator in one of the originating fields in respect of any chargeable period shall be taken to be that participator’s share of the oil won from that field in that period.
- (3) With respect to any blended oil, each of the participators in the originating fields (either jointly or individually) shall, not later than 1st August 1987 or, if it is later, not later than thirty days after the date on which the first allocation is made in accordance with a particular method falling within subsection (2) above, furnish to the Board for the purposes of this section such details as may be prescribed with respect to that method and to the blended oil concerned; and if any participator fails to comply with this subsection he shall be liable—
@@ -1465,9 +1151,9 @@
- (7) In this section—
- (a) "the oil taxation legislation" means Part I of the principal Act and any enactment construed as one with that Part; and
- (b) "prescribed" means prescribed by the Board, whether before or after the passing of this Act.
- (a) “*the oil taxation legislation*” means Part I of the principal Act and any enactment construed as one with that Part; and
- (b) “*prescribed*” means prescribed by the Board, whether before or after the passing of this Act.
#### Relief for research expenditure
@@ -1483,7 +1169,7 @@
##### 65
- (1) Where an election is made by a participator in an oil field (in this section referred to as "the receiving field"), up to 10 per cent. of certain expenditure incurred on or after 17th March 1987 in connection with another field, being a field which is for the purposes of this section a relevant new field, shall be allowable in accordance with this section in respect of the receiving field; and in the following provisions of this section the relevant new field in connection with which the expenditure was incurred is referred to as "the field of origin".
- (1) Where an election is made by a participator in an oil field (in this section referred to as “*the receiving field*”), up to 10 per cent. of certain expenditure incurred on or after 17th March 1987 in connection with another field, being a field which is for the purposes of this section a relevant new field, shall be allowable in accordance with this section in respect of the receiving field; and in the following provisions of this section the relevant new field in connection with which the expenditure was incurred is referred to as “*the field of origin*”.
- (2) An election under this section may be made only in respect of expenditure which—
@@ -1491,7 +1177,7 @@
- (b) as regards the field of origin, is allowable under section 3 or section 4 of the principal Act or section 3 of the Oil Taxation Act 1983; and
- (c) as regards the field of origin, has been allowed as qualifying for supplement under section 2(9)(b)(ii) or (c)(ii) of the principal Act (in the following provisions of this section referred to as "supplement"); and
- (c) as regards the field of origin, has been allowed as qualifying for supplement under section 2(9)(b)(ii) or (c)(ii) of the principal Act (in the following provisions of this section referred to as “*supplement*”); and
- (d) is not expenditure falling within subsection (1) of section 5A of the principal Act (allowance of exploration and appraisal expenditure);
@@ -1499,7 +1185,7 @@
- (3) A participator may not make an election under this section in respect of expenditure which was incurred before the date which is his qualifying date, within the meaning of section 113 of the Finance Act 1984 (restriction of PRT reliefs), in relation to the receiving field unless that date falls before the end of the first chargeable period in relation to that field.
- (4) Where, by virtue of an election by. a participator under this section, an amount of expenditure is allowable in respect of the receiving field, it shall be allowable as follows—
- (4) Where, by virtue of an election by a participator under this section, an amount of expenditure is allowable in respect of the receiving field, it shall be allowable as follows—
- (a) it shall be taken into account in that assessment to tax or determination relating to a chargeable period of the receiving field which is specified in Part II of Schedule 14 to this Act; and
@@ -1507,7 +1193,7 @@
- (c) it shall be excluded in determining for the purposes of section 111(2) of the Finance Act 1981 (restriction of expenditure supplement) whether any, and if so what, assessable profit or allowable loss accrues to the participator in any chargeable period of the receiving field.
- (5) Where, by virtue of an election by a participator under this section, an amount of expenditure is allowable in respect of the receiving field, that amount shall be disregarded in determining, as regards the field of origin, the amounts referred to (in relation to the participator or the associated company, as'the case may be) in paragraph (b) or paragraph (c) of subsection (9) of section 2 of the principal Act (allowable expenditure and supplement thereon).
- (5) Where, by virtue of an election by a participator under this section, an amount of expenditure is allowable in respect of the receiving field, that amount shall be disregarded in determining, as regards the field of origin, the amounts referred to (in relation to the participator or the associated company, as the case may be) in paragraph (b) or paragraph (c) of subsection (9) of section 2 of the principal Act (allowable expenditure and supplement thereon.
- (6) In Schedule 14 to this Act—
@@ -1515,13 +1201,13 @@
- (b) Part IV contains provisions supplemental to and consequential upon the allowance of expenditure by virtue of an election under this section, including provisions applicable where a notice of variation is served in respect of expenditure which is already the subject of such an election;
- (c) "the receiving field" and "the field of origin" have the meaning assigned by subsection (1) above;
- (d) "the principal section" means this section;
- (e) "election" means an election under this section; and
- (f) "supplement" has the meaning assigned by subsection (2)(c) above.
- (c) “*the receiving field*” and “*the field of origin*” have the meaning assigned by subsection (1) above;
- (d) “*the principal section*” means this section;
- (e) “*election*” means an election under this section; and
- (f) “*supplement*” has the meaning assigned by subsection (2)(c) above.
#### Oil allowance: adjustment for final periods
@@ -1529,17 +1215,17 @@
- (1) For the purposes of this section—
- (a) "the final allocation period", in relation to an oil field, means the chargeable period of that field in which section 8(6)(b) of the principal Act applies (the earliest chargeable period in which oil allowance is subject to "the necessary restriction" in order to confine it within the overall maximum); and
- (b) "the penultimate period", in relation to an oil field, means the chargeable period of that field which immediately precedes the final allocation period;
- (a) “*the final allocation period*”, in relation to an oil field, means the chargeable period of that field in which section 8(6)(b) of the principal Act applies (the earliest chargeable period in which oil allowance is subject to “the necessary restriction” in order to confine it within the overall maximum); and
- (b) “*the penultimate period*”, in relation to an oil field, means the chargeable period of that field which immediately precedes the final allocation period;
and any reference in this section to the two final periods is a reference to the final allocation period and the penultimate period.
- (2) The following provisions of this section apply if the responsible person gives notice to the Board (in this section referred to as an "apportionment notice") specifying the manner in which the oil allowance for the field is to be apportioned between the participators in each of the two final periods, being a manner designed—
- (2) The following provisions of this section apply if the responsible person gives notice to the Board (in this section referred to as an “apportionment notice”) specifying the manner in which the oil allowance for the field is to be apportioned between the participators in each of the two final periods, being a manner designed—
- (a) to produce, so far as practicable, the result specified in subsection (4) below, being a result which, in the circumstances of the case, could not be achieved under section 8(6)(b) of the principal Act; and
- (b) to secure that adjustments in a participator's share of the oil allowance are made in the final allocation period in preference to the penultimate period.
- (b) to secure that adjustments in a participator’s share of the oil allowance are made in the final allocation period in preference to the penultimate period.
- (3) An apportionment notice shall be of no effect unless—
@@ -1553,9 +1239,9 @@
- (4) The result referred to in subsection (2) above is that the respective shares of the oil allowance utilised by each of two or more participators specified in the apportionment notice bear to each other the same proportion as their respective shares in oil won and saved from the field and, for this purpose—
- (a) a participator's share of the oil allowance means the total amount of the allowance utilised by him over the period specified for the purpose of this paragraph in the apportionment notice; and
- (b) a participator's share in oil won and saved from the field means the total of the oil included in his share of oil won and saved from the field (as specified in returns under Schedule 2 to the principal Act) over the period specified for the purposes of this paragraph in the apportionment notice, being a period which includes that specified for the purposes of paragraph (a) above.
- (a) a participator’s share of the oil allowance means the total amount of the allowance utilised by him over the period specified for the purpose of this paragraph in the apportionment notice; and
- (b) a participator’s share in oil won and saved from the field means the total of the oil included in his share of oil won and saved from the field (as specified in returns under Schedule 2 to the principal Act) over the period specified for the purposes of this paragraph in the apportionment notice, being a period which includes that specified for the purposes of paragraph (a) above.
- (5) If the Board are satisfied that an apportionment notice complies with subsections (2) to (4) above, they shall give notice to the responsible person accepting the apportionment notice and, on the giving of that notice—
@@ -1565,9 +1251,9 @@
- (6) If the Board are not satisfied that an apportionment notice complies with subsections (2) to (4) above, they shall give notice to the responsible person rejecting the apportionment notice and, where the Board give such a notice, the responsible person may, by notice in writing given to the Board within thirty days after the date of the notice of rejection, appeal to the Special Commissioners against the notice.
- (7) Where notice of appeal is given under subsection (6) above—
- (a) if, at any time after the giving of the notice and before the determination of the appeal by the Commissioners, the Board and the. appellant agree that the apportionment notice should be accepted or withdrawn or varied, the same consequences shall ensue as if the Commissioners had determined the appeal to that effect;
- (7) Where notice of appeal is given under subsection (6) abvove—
- (a) if, at any time after the giving of the notice and before the determination of the appeal by the Commissioners, the Board and the appellant agree that the apportionment notice should be accepted or withdrawn or varied, the same consequences shall ensue as if the Commissioners had determined the appeal to that effect;
- (b) if, on the hearing of the appeal, it appears to the majority of the Commissioners present at the hearing that the apportionment notice should be accepted, with or without modifications, they shall allow the appeal and, where appropriate, make such modifications of the apportionment specified in the notice as they think fit; and
@@ -1583,10 +1269,8 @@
In Schedule 7 to the principal Act (claim for allowance of certain exploration expenditure etc.) at the end of the Table set out in paragraph 1(3) (which applies the provisions of Schedule 5 specified in the first column of the Table with the modifications specified in the second column) there shall be added—
| 9 | ... | ... | In sub-paragraph (2) omit paragraphs (b) and (c), in sub-paragraph (8) for the reference to all or any of the participators substitute a reference to the participator by whom the claim is made and in sub-paragraph (11) for "after 15th March 1983" substitute "on or after 17th March 1987." |
| --- | --- | --- | --- |
.
| 9 | In sub-paragraph (2) omit paragraphs (b) and (c), in sub-paragraph (8) for the reference to all or any of the participators substitute a reference to the participator by whom the claim is made and in sub-paragraph (11) for “after 15th March 1983” substitute “ on or after 17th March 1987 ”. |
| --- | --- |
## Part VI — Miscellaneous and Supplementary
@@ -1598,7 +1282,7 @@
- (2) Nothing in subsection (1) above affects the power of the Treasury to issue a certificate under subsection (2) of section 18 of that Act (including that subsection as applied by section 28(3) or section 29(3) of that Act) with respect to acts done before 13th December 1979.
- (3) In section 150 of the Capital Gains Tax Act 1979 (general rules as to valuation), subsection (5) (assets of a kind the sale of which is subject to restrictions imposed under the Exchange Control Act 1947) shall cease to have effect except in relation to the determination of the market value of any assets at a time before 13th December 1979.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Subsections (1) and (2) above extend to the Channel Islands and the Isle of Man.
@@ -1608,46 +1292,40 @@
In section 2 of the Banking and Financial Dealings Act 1971 (power of Treasury to suspend financial dealings)—
- (a) at the end of paragraph (c) of subsection (1) (power to suspend dealings in gold) there shall be added "or, according as may be specified in the order, gold of such kind as may be so specified">; and
- (b) in subsection (6) for the definition beginning "foreign currency" there shall be substituted—
> - "foreign currency" means any currency other than sterling and any units of account defined by reference to more than one currency (whether or not including sterling); and
> - "gold" includes gold coin, gold bullion and gold wafers.
- (a) at the end of paragraph (c) of subsection (1) (power to suspend dealings in gold) there shall be added “ or, according as may be specified in the order, gold of such kind as may be so specified ”; and
- (b) in subsection (6) for the definition beginning “foreign currency” there shall be substituted—
> “*foreign currency*” means any currency other than sterling and any units of account defined by reference to more than one currency (whether or not including sterling); and
> “*gold*” includes gold coin, gold bullion and gold wafers.
#### Arrangements specified in Orders in Council relating to double taxation relief etc.
##### 70
- (1) In section 497 of the Taxes Act (relief by agreement with other countries) after subsection (1) there shall be inserted the following subsection—
> (1A) Without prejudice to the generality of subsection (1) above, if it appears to Her Majesty to be appropriate, the arrangements specified in an Order in Council under this section may include provisions with respect to the exchange of information necessary for carrying out the domestic laws of the United Kingdom and the laws of the territory to which the arrangements relate concerning taxes covered by the arrangements including, in particular, provisions about the prevention of fiscal evasion with respect to those taxes; and where arrangements do include any such provisions, the declaration in the Order in Council shall state that fact.
- (2) In section 158 of the Inheritance Tax Act 1984 (double taxation conventions) after subsection (1) there shall be inserted the following subsection—
> (1A) Without prejudice to the generality of subsection (1) above, if it appears to Her Majesty to be appropriate, the arrangements specified in an Order in Council under this section may include provisions with respect to the exchange of information necessary for carrying out the domestic laws of the United Kingdom and the laws of the territory to which the arrangements relate concerning taxes covered by the arrangements including, in particular, provisions about the prevention of fiscal evasion with respect to those taxes; and where arrangements do include any such provisions, the declaration in the Order in Council shall state that fact.
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Pre-consolidation amendments
##### 71
The enactments specified in Schedule 15 to this Act shall have effect subject to the amendments specified in that Schedule, being amendments designed to facilitate, or otherwise desirable in connection with, the consolidation of the Income Tax Acts and the Corporation Tax Acts.
#### Short title, interpretation, construction and repeals
##### 72
- (1) This Act may be cited as the Finance Act 1987.
- (2) In this Act "the Taxes Act" means the Income and Corporation Taxes Act 1970.
- (2) In this Act “*the Taxes Act*” means the Income and Corporation Taxes Act 1970.
- (3) 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, except section 56 and Schedule 7, shall be construed as one with the Stamp Act 1891.
- (5) In Part IV of this Act "the 1984 Act" means the Inheritance Tax Act 1984.
- (6) Part V of this Act shall be construed as one with Part I of the Oil Taxation Act 1975 and in that Part "the principal Act" means that Act.
- (5) In Part IV of this Act “*the 1984 Act*” means the Inheritance Tax Act 1984.
- (6) Part V of this Act shall be construed as one with Part I of the Oil Taxation Act 1975 and in that Part “*the principal Act*” means that Act.
- (7) The enactments specified in Schedule 16 to this Act (which include enactments which are spent or otherwise unnecessary) 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.
@@ -1661,76 +1339,33 @@
##### 1
In this Part of this Schedule—
- "the 1971 Act" means the Vehicles (Excise) Act 1971; and
- "the 1972 Act" means the Vehicles (Excise) Act (Northern Ireland) 1972.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 2
At the end of Part I of Schedule 3 to each of the 1971 Act and the 1972 Act there shall be added—
> (8)
> (1) In this Schedule "recovery vehicle" means, subject to the provisions of this paragraph, a vehicle which is either constructed or permanently adapted primarily for the purposes of lifting, towing and transporting a disabled vehicle or for any one or more of those purposes.
> (2) Subject to sub-paragraph (3) below, a vehicle which is constructed or permanently adapted as mentioned in sub-paragraph (1) above shall not be a recovery vehicle if at any time it is used for any purpose other than—
> (a) the recovery of a disabled vehicle;
> (b) the removal of a disabled vehicle from the place where it became disabled to premises at which it is to be repaired or scrapped;
> (c) the removal of a disabled vehicle from premises to which it was taken for repair to other premises at which it is to be repaired or scrapped; and
> (d) carrying any load other than fuel and other liquids required for its propulsion and tools and other articles required for the operation of or in connection with apparatus designed to lift, tow or transport a disabled vehicle.
> (3) At any time when a vehicle is being used for purposes specified in paragraphs (a) and (b) of sub-paragraph (2) above, the following uses shall be disregarded in determining whether the vehicle is a recovery vehicle—
> (a) use for the carriage of any person who immediately before a vehicle became disabled, was the driver of or a passenger in that vehicle;
> (b) use for the carriage of any goods which, immediately before a vehicle became disabled, were being carried in the disabled vehicle; and
> (c) use for any purpose prescribed for the purposes of this paragraph.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### The charge of duty
##### 3
At the end of the Table in Part II of Schedule 3 to each of the 1971 Act and the 1972 Act there shall be added—
| 4. Recovery vehicles | — | — | 50 | — |
| --- | --- | --- | --- | --- |
.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Recovery vehicles not chargeable as goods vehicles
##### 4
- (1) In Part I of Schedule 4 to each of the 1971 Act and the 1972 Act (goods vehicles), in paragraph 11 (exempted vehicles) in paragraph (c) for the words "or fisherman's tractor" there shall be substituted "fisherman's tractor or recovery vehicle".
- (2) In paragraph 15(1) of that Schedule (interpretation) after the definition beginning "mobile crane" there shall be inserted—
> - "recovery vehicle" has the same meaning as in Schedule 3 to this Act
.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Exclusion of recovery vehicles from trade licences
##### 5
In section 16 of the 1971 Act (trade licences)—
- (a) in subsection (1)(f) the words from "and all recovery vehicles" to "that business" shall be omitted;
- (b) in paragraph (a) of the proviso to subsection (1) the words from "except" to "disabled vehicle" shall be omitted;
- (c) in subsection (3) paragraph (b) shall be. omitted and at the end of paragraph (e) there shall be added the words "other than a trailer which is for the time being a disabled vehicle"; and
- (d) in subsection (8) the definition of "recovery vehicle" shall be omitted.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 6
In section 16 of the 1972 Act (trade licences)—
- (a) in subsection (1)(a) the words from "and all recovery vehicles" to "that business" shall be omitted;
- (b) in subsection (2)(a) the words from "except" to "disabled vehicle" shall be omitted;
- (c) in subsection (4) paragraph (b) shall be omitted and at the end of paragraph (e) there shall be added the words "other than a trailer which is for the time being a disabled vehicle"; and
- (d) in subsection (10) the definition of "recovery vehicle" shall be omitted.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
## Part III — Miscellaneous Amendments
@@ -1738,147 +1373,63 @@
##### 7
In this Part of this Schedule—
- "the 1971 Act" means the Vehicles (Excise) Act 1971; and
- "the 1972 Act" means the Vehicles (Excise) Act (Northern Ireland) 1972.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Additional liability for evasion of duty
##### 8
In section 9(3) of the 1971 Act (circumstances in which additional liability for keeping unlicensed vehicle not to be payable) paragraphs (b) and (c) (vehicles not used or kept on a public road and vehicles not chargeable with duty) shall be omitted.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 9
In section 9(4) of the 1972 Act (circumstances in which additional liability for keeping unlicensed vehicle not to be payable) paragraphs (b) and (c) (vehicles not used or kept on a public road and vehicles not chargeable with duty) shall be omitted.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 10
In section 18A(7) of the 1971 Act (circumstances in which additional liability in relation to alteration of vehicle or its use not to be payable)—
- (a) for paragraph (b) (vehicle neither used nor kept on public road) there shall be substituted the word "or"; and
- (b) paragraph (d) (vehicle not chargeable with duty) and the word "or" immediately preceding it shall be omitted.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 11
In section 18A(7) of the 1972 Act (circumstances in which additional liability in relation to alteration of vehicle or its use not to be payable)—
- (a) for paragraph (b) (vehicle neither used nor kept on public road) there shall be substituted the word "or"; and
- (b) paragraph (d) (vehicle not chargeable with duty) and the word "or" immediately preceding it shall be omitted.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 12
In Part I of Schedule 7 to the 1971 Act (transitional modifications)—
- (a) in paragraph 7 paragraph (b)(ii) shall be omitted and in paragraph (b)(iii) for the words "paragraphs (c) and (d)" there shall be substituted the words "paragraph (d)"; and ,
- (b) in paragraph 17A,paragraph (b)(ii) shall be omitted and in paragraph (b)(iii) for the words "paragraphs (c) and (d)" and "paragraph (d)" there shall be substituted respectively the words "paragraph (c)" and "that paragraph".
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 13
In Part I of Schedule 9 to the 1972 Act (transitional modifications)—
- (a) in paragraph 7, paragraph (b)(ii) shall be omitted and in paragraph (b)(iii) for the words "paragraphs (c) and (d)" there shall be substituted the words "paragraph (d)"; and
- (b) in paragraph 17A, paragraph (b)(ii) shall be omitted and in paragraph (b)(iii) for the words "paragraphs (c) and (d)" and "paragraph (d)" there shall be substituted respectively the words "paragraph (c)" and "that paragraph".
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Offences relating to trade licences
##### 14
In section 16(7) of the 1971 Act (offences relating to trade licences) after the words "keeping on a road" there shall be inserted "in any circumstances other than such circumstances as may have been prescribed under paragraph (c) of the proviso to subsection (1) above".
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 15
In section 16(8) of the 1972 Act (offences relating to trade licences) after the words "keeping on a road" there shall be inserted "in any circumstances other than such circumstances as may have been prescribed under subsection (2)(c)".
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Regulations concerning transfer etc. of vehicles
##### 16
- (1) Section 23 of the 1971 Act (regulations with respect to the transfer and identification of vehicles) shall be amended as follows.
- (2) In paragraph (e) (inspection and surrender of registration documents) after the word "inspection" there shall be inserted the word ", transfer".
- (3) In that section as set out in paragraph 20 of Part I of Schedule 7 to the Act—
- (a) in subsection (1)(c) (requirements on person to whom vehicle transferred to furnish particulars) after the word "person" there shall be inserted the words "by whom or"; and
- (b) in subsection (1)(d) (issue, surrender etc. of registration books) before the word "surrender" there shall be inserted the word "transfer".
- (4) Regulation 12(1) of the Road Vehicles (Registration and Licensing) Regulations 1971 shall have effect on and after the day on which this paragraph comes into force as if sub-paragraph (3) above had been in force when that regulation was made.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 17
- (1) Section 23(1) of the 1972 Act (regulations with respect to transfer and identification of vehicles) shall be amended as follows.
- (2) In paragraph (e) (inspection and surrender of registration documents) after the word "inspection" there shall be inserted the word "transfer".
- (3) In that section as set out in paragraph 20 of Part I of Schedule 9 to the Act—
- (a) in paragraph (c) (requirements on person to whom vehicle transferred to furnish particulars) after the word "person" there shall be inserted the words "by whom or"; and
- (b) in paragraph (d) (issue, surrender etc. of registration books) before the word "surrender" there shall be inserted the word "transfer".
- (4) Regulation 13(1) of the Road Vehicles (Registration and Licensing) Regulations (Northern Ireland) 1973 shall have effect on and after the day on which this paragraph comes into force as if sub-paragraph (3) above had been in force when that regulation was made.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Increase of certain penalties for offences under regulations
##### 18
- (1) Section 37 of the 1971 Act (regulations) shall be amended as follows.
- (2) For paragraph (a) of subsection (3) (fine of level 3 on the standard scale on conviction for offences against certain regulations) there shall be substituted—
> (a) in the case of regulations prescribed for the purposes of this paragraph, of regulations made under section 24 or of a contravention or failure to comply with requirements imposed in pursuance of section 23(a) above, level 3 on the standard scale;
;
- (3) After that subsection there shall be inserted—
> (3A) The prescribing of regulations for the purposes of subsection (3)(a) above shall not affect the punishment for a contravention of or a failure to comply with those regulations before they were so prescribed.
.
- (4) For subsection (3) of that section as set out in paragraph 24 of Part I of Schedule 7 to the Act there shall be substituted—
> (3) Any person who contravenes or fails to comply with any regulations under this Act (other than regulations under section 2(5), 11(3), 14, 20 or 24) shall be guilty of an offence and liable on summary conviction—
> (a) in the case of regulations prescribed for the purposes of this paragraph, to a fine not exceeding level 3 on the standard scale; and
> (b) in any other case, to a fine not exceeding level 2 on the standard scale.
> (3A) Regulations under section 14, 20 or 24 above may provide that a person who contravenes or fails to comply with any specified provision of the regulations shall be guilty of an offence and a person guilty of such an offence shall be liable on summary conviction—
> (a) in the case of regulations under section 14 or 20, to a fine not exceeding level 1 on the standard scale; and
> (b) in the case of regulations under section 24, to a fine not exceeding level 3 on the standard scale.
> (3B) The prescribing of regulations for the purposes of subsection (3Xa) above shall not affect the punishment for a contravention of or failure to comply with those regulations before they were so prescribed.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 19
- (1) Section 34 of the 1972 Act (regulations) shall be amended as follows.
- (2) For paragraph (a) of subsection (3) (fine of level 3 on the standard scale on conviction of offences against certain regulations) there shall be substituted—
> (a) in the case of regulations prescribed for the purposes of this paragraph, of regulations made under section 24 or of a contravention or failure to comply with requirements imposed in pursuance of section 23(1 )(a), level 3 on the standard scale;
;
- (3) After that subsection there shall be inserted—
> (3A) The prescribing of regulations for the purposes of subsection (3)(a) shall not affect the punishment for a contravention of or failure to comply with those regulations before they were so prescribed.
.
- (4) For subsection (3) of that section as set out in paragraph 24 of Part I of Schedule 9 to the Act there shall be substituted—
> (3) Any person who contravenes or fails to comply with any regulations under this Act (other than regulations under section 2(6), 11(3), 14, 20 or 24) shall be guilty of an offence and liable on summary conviction—
> (a) in the case of regulations prescribed for the purposes of this paragraph, to a fine not exceeding level 3 on the standard scale; and
> (b) in any other case, to a fine not exceeding level 2 on the standard scale.
> (3A) Regulations under section 14, 20 or 24 may provide that a person who contravenes or fails to comply with any specified provision of the regulations shall be guilty of an offence and a person guilty of such an offence shall be liable on summary conviction—
> (a) in the case of regulations under section 14 or 20, to a fine not exceeding level 1 on the standard scale; and
> (b) in the case of regulations under section 24, to a fine not exceeding level 3 ort the standard scale.
> (3B) The prescribing of regulations for the purposes of subsection (3)(a) shall not affect the punishment for a contravention of or failure to comply with those regulations before they were so prescribed.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Dishonoured cheques
@@ -1892,11 +1443,7 @@
##### 21
After paragraph 2 of Part II of Schedule 6 to the 1972 Act (modified application of certain provisions of the Miscellanous Transferred Excise Duties Act (Northern Ireland) 1972) there shall be added the following paragraph—
> (3) Section 10(2) of the Transferred Excise Duties Act shall apply as if for the words from "in the case of onwards there were substituted the words "whichever is the greater of—
> (a) level 3 on the standard scale, or
> (b) an amount equal to five times the annual rate of duty that was payable on the grant of the licence or would have been so payable if it had been taken out for a period of twelve months.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
## SCHEDULE 2
@@ -1906,27 +1453,25 @@
Section 7 of the principal Act (reverse charge on supplies received from abroad) shall be amended as follows—
- (a) in paragraph (b) of subsection (1), for the words "taxable person" there shall be substituted "person (in this section referred to as 'the recipient')";
- (b) in subsection (1), in the words following paragraph (b) for the words "as if the taxable person" there shall be substituted "as if the recipient";
- (c) in subsections (3) and (4) for the words "taxable person" there shall be substituted "recipient"; and
- (d) in subsection (3) for the words "the allowance" there shall be substituted "any allowance".
- (a) in paragraph (b) of subsection (1), for the words “taxable person” there shall be substitiuted “person (in this section referred to as “*the recipient*”)”;
- (b) in subsection (1), in the words following paragraph (b) for the words “as if the taxable person” there shall be substituted “as if the recipient”;
- (c) in subsections (3) and (4) for the words “taxable person” there shall be substituted “recipient”; and
- (d) in subsection (3) for the words “the allowance” there shall be substituted “any allowance”.
### Repayment of tax on importation to those in business overseas
##### 2
In subsection (1) of section 23 of the principal Act (which enables the Commissioners to provide by regulations for the repayment to persons carrying on business in other member States and certain other countries of tax on supplies to them in the United Kingdom) after the words "United Kingdom", where they first occur, there shall be inserted "or on the importation of goods by them into the United Kingdom".
### Transfers of going concerns
##### 3
In section 33 of the principal Act (transfers of going concerns), after subsection (1) there shall be inserted—
> (1A) Where the transferee is liable to be registered by virtue of paragraph 1 (1 )(b) of Schedule 1 to this Act at the time the business is transferred, paragraph 4(2) of that Schedule shall not apply but the Commissioners shall register him with effect from that time.
> (1A) Where the transferee is liable to be registered by virtue of paragraph 1(1)(b) of Schedule 1 to this Act at the time the business is transferred, paragraph 4(2) of that Schedule shall not apply but the Commissioners shall register him with effect from that time.
.
@@ -1940,7 +1485,7 @@
.
## SCHEDULE 3
## SCHEDULES 3–6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
## Part I — The Taxable Maximum
@@ -2304,7 +1849,7 @@
##### 2
- (1) In section 87, after subsection (7) there shall be inserted—
- (1) In section 87, after subsection (7) there shall be inserted —
> (7A) Where there would be no charge to tax under this section in relation to some of the chargeable securities to which the agreement between A and B relates if separate agreements had been made between them for the transfer of those securities and for the transfer of the remainder, this section shall have effect as if such separate agreements had been made.
> (7B) 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.
@@ -2317,7 +1862,7 @@
##### 3
- (1) In section 88(3)(a), after the words "subsection (2)" there shall be inserted the words "the words 'the expiry of the period of two months beginning with' and".
- (1) In section 88(3)(a), after the words “subsection (2)” there shall be inserted the words “the words 'the expiry of the period of two months beginning with' and”.
- (2) This paragraph shall have effect in relation to agreements made on or after 1st August 1987.
@@ -2325,125 +1870,84 @@
##### 4
- (1) In section 89, after subsection (1) there shall be inserted—
> (1A) Section 87 above shall not apply as regards an agreement to transfer securities to B or his nominee if the agreement is made by B in the ordinary course of his business as a market maker in securities consisting of related quoted options; and in this subsection—
> (a) 'quoted options' means options quoted on The Stock Exchange, and
> (b) 'related quoted options' means quoted options to buy or sell securities of the kind transferred.
.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Clearance services
##### 5
- (1) In section 90, for subsection (5) there shall be substituted —
> (5) Section 87 above shall not apply as regards an agreement to transfer securities which the Board are satisfied are held, when the agreement is made, by a person within subsection (6) below.
> (6) A person is within this subsection if his business is exclusively that of holding shares, stock or other marketable securities —
> (a) as nominee or agent for a person whose business is or includes the provision of clearance services for the purchase and sale of shares, stock or other marketable securities, and
> (b) for the purpose of such part of the business mentioned in paragraph (a) above as consists of the provision of such clearance services (in a case where the business does not consist exclusively of that); and in this subsection, 'marketable securities' shall be construed in accordance with section 122(1) of the Stamp Act 1891 .
- (2) This paragraph shall be deemed always to have had effect.
### Clearance services
##### 5
- (1) In section 90, for subsection (5) there shall be substituted—
> (5) Section 87 above shall not apply as regards an agreement to transfer securities which the Board are satisfied are held, when the agreement is made, by a person within subsection (6) below.
> (6) A person is within this subsection if his business is exclusively that of holding shares, stock or other marketable securities—
> (a) as nominee or agent for a person whose business is or includes the provision of clearance services for the purchase and sale of shares, stock or other marketable securities, and
> (b) for the purpose of such part of the business mentioned in paragraph (a) above as consists of the provision of such clearance services (in a case where the business does not consist exclusively of that);
> and in this subsection, 'marketable securities' shall be construed in accordance with section 122(1) of the Stamp Act 1891.
.
- (2) This paragraph shall be deemed always to have had effect.
### Charities etc.
##### 6
- (1) In section 90, at the end there shall be added—
> (7) Section 87 above shall not apply as regards an agreement to transfer securities to—
- (1) In section 90, at the end there shall be added —
> (7) Section 87 above shall not apply as regards an agreement to transfer securities to —
> (a) a body of persons established for charitable purposes only, or
> (b) the trustees of a trust so established, or
> (c) the Trustees of the National Heritage Memorial Fund, or
> (d) the Historic Buildings and Monuments Commission for England.
.
- (2) This paragraph shall be deemed always to have had effect.
### Interest on tax repayments
##### 7
- (1) In section 92, after subsection (4) there shall be inserted—
- (1) In section 92, after subsection (4) there shall be inserted —
> (4A) Interest paid under subsection (2) above shall not constitute income for any tax purposes.
.
- (2) This paragraph shall be deemed always to have had effect.
## SCHEDULE 8
##### 1
In section 10 of the 1984 Act (dispositions not intended to confer gratuitous benefit) in subsection (2) for the words from "shares" to "stock exchange" there shall be substituted "unquoted shares or unquoted debentures".
In section 10 of the 1984 Act (dispositions not intended to confer gratuitous benefit) in subsection (2) for the words from “shares” to “stock exchange” there shall be substituted “ unquoted shares or unquoted debentures ”.
##### 2
In section 98 of the 1984 Act (effect of alterations of capital, etc.) in subsection (1)—
- (a) in paragraph (a) for the words from "shares" onwards there shall be substituted "quoted shares or quoted securities";
- (b) in paragraph (b) for the words from "shares" onwards there shall be substituted "unquoted shares in or unquoted debentures of a close company"; and
- (c) for the words "shares or debentures not so quoted" there shall be substituted "unquoted shares or unquoted debentures".
- (a) in paragraph (a) for the words from “shares” onwards there shall be substituted “ quoted shares or quoted securities ”;
- (b) in paragraph (b) for the words from “shares” onwards there shall be substituted “ unquoted shares in or unquoted debentures of a close company ”; and
- (c) for the words “shares or debentures not so quoted” there shall be substituted “ unquoted shares or unquoted debentures ”.
##### 3
In section 100 of the 1984 Act (alterations of capital where participators are trustees) in subsection (1)(c) for the words from "shares" onwards there shall be substituted "unquoted shares in or unquoted securities of the close company".
In section 100 of the 1984 Act (alterations of capital where participators are trustees) in subsection (1)(c) for the words from “shares” onwards there shall be substituted “ unquoted shares in or unquoted securities of the close company ”.
##### 4
In section 104 of the 1984 Act (relief for business property) in subsection (1)(a) for the words "or (b)" there shall be substituted "(b) or (bb)".
In section 104 of the 1984 Act (relief for business property) in subsection (1)(a) for the words “or (b)” there shall be substituted “ (b) or (bb) ”.
##### 5
- (1) Section 105 of the 1984 Act (relevant business property) shall be amended as follows.
- (2) In subsection (1) after the words "sections 106,108," there shall be inserted "109A" and for paragraph (c) there shall be substituted the following paragraphs—
> (bb) unquoted shares in a company which do not fall within paragraph (b) above and which immediately before the transfer satisfied the condition specified in subsection (1 A) below;
> (c) unquoted shares in a company which do not fall within paragraph (b) or paragraph (bb) above
.
- (3) After subsection (1) there shall be inserted the following subsections—
> (1A) The condition referred to in subsection (1)(bb) above is that the shares (either by themselves or together with other shares or securities owned by the transferor) gave the transferor control of powers of voting on all questions affecting the company as a whole which if exercised would have yielded more than 25 per cent. of the votes capable of being exercised on them; and shares shall be taken to satisfy this condition if, together with any shares which are related property within the meaning of section 161 below, they would have been sufficient to give the transferor such control.
> (1B) Subsections (3) and (4) of section 269 below have effect in relation to subsection (1 A) above as they have effect in relation to subsection (1) of that section.
- (4) After subsection (2) there shall be inserted the following subsection—
> (2A) Shares of a company do not fall within subsection (1)(bb) above if—
> (a) they would not have been sufficient, without other property, to satisfy the condition specified in subsection (1A) above immediately before the transfer; and
> (b) their value is taken by virtue of section 176 below to be less than the value previously determined.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 6
In section 107 of the 1984 Act (replacements) in subsection (4)—
- (a) for the words "section 105(1 )(c)" there shall be substituted "section 105(1)(bb) or (c)"; and
- (b) after the words "section 106 above" there shall be inserted "and section 109A below".
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 7
After section 109 of the 1984 Act there shall be inserted the following section—
> (109A) Shares in a company do not fall within subsection (1)(bb) of section 105 above unless the condition specified in subsection (1 A) of that section was satisfied—
> (a) throughout the two years immediately preceding the transfer, or
> (b) where section 108 or section 109 above applies and the transferor owned the shares for a period of less than two years immediately preceding the transfer, throughout that lesser period.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 8
- (1) In section 113A of the 1984 Act (application of relief for business property to transfers made within seven years before death of transferor) in subsection (3) at the beginning of paragraph (b) there shall be inserted the words "except to the extent that the original property consists of shares or securities to which subsection (3A) below applies".
- (1) In section 113A of the 1984 Act (application of relief for business property to transfers made within seven years before death of transferor) in subsection (3) at the beginning of paragraph (b) there shall be inserted the words “ except to the extent that the original property consists of shares or securities to which subsection (3A) below applies ”.
- (2) After subsection (3) of that section there shall be inserted the following subsection—
@@ -2453,35 +1957,35 @@
##### 9
In section 124A of the 1984 Act (application of agricultural relief to transfers within seven years before death of transferor) in subsection (b) for the words following paragraph (b) there shall be substituted "his period of ownership of the original property shall be treated as including his period of ownership of the shares."
In section 124A of the 1984 Act (application of agricultural relief to transfers within seven years before death of transferor) in subsection (6) for the words following paragraph (b) there shall be substituted “ his period of ownership of the original property shall be treated as including his period of ownership of the shares. ”
##### 10
In section 136 of the 1984 Act (transactions of close companies) in subsection (1)(b) for the words "shares quoted on a recognised stock exchange" there shall be substituted "quoted shares" and for the words "shares in or debentures of the company which are not so quoted" there shall be substituted "unquoted shares in or unquoted debentures of the company".
In section 136 of the 1984 Act (transactions of close companies) in subsection (1)(b) for the words “shares quoted on a recognised stock exchange” there shall be substituted “ quoted shares ” and for the words “shares in or debentures of the company which are not so quoted” there shall be substituted “ unquoted shares in or unquoted debentures of the company ”.
##### 11
In section 140(2) of the 1984 Act (market value for purposes of Chapter IV of Part IV) in paragraph (b) for the words from "shares" to "exchange" there shall be substituted "unquoted shares".
In section 140(2) of the 1984 Act (market value for purposes of Chapter IV of Part IV) in paragraph (b) for the words from “shares” to “exchange” there shall be substituted “ unquoted shares ”.
##### 12
- (1) In section 168 of the 1984 Act (unquoted shares and securities) in subsection (1) before the word "securities" where it first occurs, there shall be inserted "unquoted".
- (1) In section 168 of the 1984 Act (unquoted shares and securities) in subsection (1) before the word “*securities*” where it first occurs, there shall be inserted “ unquoted ”.
- (2) Subsection (2) of that section shall be omitted.
##### 13
- (1) In section 178 of the 1984 Act (sale of shares etc. from deceased's estate) in subsection (1), in the definition of "qualifying investments", for the words from "at the date" to "exchange" there shall be substituted "are quoted at the date of the death in question".
- (1) In section 178 of the 1984 Act (sale of shares etc. from deceased’s estate) in subsection (1), in the definition of “qualifying investments”, for the words from “at the date” to “exchange” there shall be substituted “ are quoted at the date of the death in question ”.
- (2) In subsection (2) of that section—
- (a) after the words "quotation on a recognised stock exchange" there shall be inserted "or dealing on the Unlisted Securities Market"; and
- (b) the words "on a recognised stock exchange", in the second place where they occur, shall be omitted.
- (a) after the words “quotation on a recognised stock exchange” there shall be inserted “ or dealing in the Unlisted Securities Market ”, and
- (b) the words “on a recognised stock exchange”, in the second place where they occur, shall be omitted.
##### 14
In section 180 of the 1984 Act (effect of purchases) in subsection (3) after the word "exchange" there shall be inserted "or separately dealt in on the Unlisted Securities Market".
In section 180 of the 1984 Act (effect of purchases) in subsection (3) after the word “exchange” there shall be inserted “ or separately dealt in on the Unlisted Securities Market ”.
##### 15
@@ -2489,10 +1993,9 @@
> (1A) Subsection (1) above does not apply to—
> (a) tax payable on the value transferred by a potentially exempt transfer which proves to be a chargeable transfer, or
> (b) additional tax becoming payable on the value transferred by any chargeable transfer by reason of the transferor's death within seven years of the transfer,
> except to the extent that the tax is attributable to the value of property which satisfies one of the conditions specified in subsection (1C) below and, in the case of property consisting of unquoted shares or unquoted securities, the further condition specified in section 228(3A) below.
- (2) In subsection (1B) of that section for the words "subsection (1A) above" there shall be substituted "this section".
> (b) additional tax becoming payable on the value transferred by any chargeable transfer by reason of the transferor’s death within seven years of the transfer,except to the extent that the tax is attributable to the value of property which satisfies one of the conditions specified in subsection (1C) below and, in the case of property consisting of unquoted shares or unquoted securities, the further condition specified in section 228(3A) below.
- (2) In subsection (1B) of that section for the words “subsection (1A) above” there shall be substituted “ this section ”.
- (3) After subsection (1B) of that section there shall be inserted the following subsection—
@@ -2502,17 +2005,17 @@
##### 16
- (1) In section 228 of the 1984 Act (shares etc. within section 227) in subsection (1) for the words "not falling under paragraph (a) above and not quoted on a recognised stock exchange", in each place where they occur, there shall be substituted "which do not fall under paragraph (a) above and are unquoted".
- (1) In section 228 of the 1984 Act (shares etc. within section 227) in subsection (1) for the words “not falling under paragraph (a) above and not quoted on a recognised stock exchange”, in each place where they occur, there shall be substituted “ which do not fall under paragraph (a) above and are unquoted ”.
- (2) After subsection (3) of that section there shall be inserted the following subsection—
> (3A) The further condition referred to in section 227(1 A) above is that the shares or securities remained unquoted throughout the period beginning with the date of the chargeable transfer and ending with the death of the transferor (or, if earlier, the death of the transferee).
> (3A) The further condition referred to in section 227(1A) above is that the shares or securities remained unquoted throughout the period beginning with the date of the chargeable transfer and ending with the death of the transferor (or if earlier, the death of the transferee).
##### 17
In section 272 of the 1984 Act (general interpretation) after the definition of "purchaser" there shall be inserted—
> - "quoted", in relation to any shares or securities, means quoted on a recognised stock exchange or dealt in on the Unlisted Securities Market and "unquoted", in relation to any shares or securities, means neither so quoted nor so dealt in
In section 272 of the 1984 Act (general interpretation) after the definition of “purchaser” there shall be inserted—
> “*quoted*”, in relation to any shares or securities, means quoted on a recognised stock exchange or dealt in on the Unlisted Securities Market and “*unquoted*”, in relation to any shares or securities, means neither so quoted nor so dealt in
.
@@ -2520,7 +2023,7 @@
- (1) In Schedule 20 to the Finance Act 1986 (gifts with reservation) paragraph 8 (agricultural and business property) shall be amended as follows.
- (2) In sub-paragraph (1) for the word "Where" there shall be substituted "This paragraph applies where" and the words from "then" onwards shall be omitted.
- (2) In sub-paragraph (1) for the word “Where” there shall be substituted “ This paragraph applies where ” and the words from “then” onwards shall be omitted.
- (3) After sub-paragraph (1) there shall be inserted the following sub-paragraph—
@@ -2528,13 +2031,13 @@
> (a) any question whether, on the material transfer of value, any shares or securities fall within paragraph (b) or paragraph (bb) of section 105(1) of the 1984 Act (which specify shares and securities qualifying for 50 per cent. relief) shall be determined, subject to the following provisions of this paragraph, as if the shares or securities were owned by the donor and had been owned by him since the disposal by way of gift; and
> (b) subject to paragraph (a) above, any question whether, on the material transfer of value, relief is available by virtue of Chapter I or Chapter II of Part V of the 1984 Act and, if relief is available by virtue of Chapter II, what is the appropriate percentage for that relief, shall be determined, subject to the following provisions of this paragraph, as if, so far as it is attributable to the property comprised in the gift, that transfer were a transfer of value by the donee.
- (4) In sub-paragraph (2) for the words "sub-paragraph (1)" there shall be substituted "sub-paragraph (lA)(b)".
- (4) In sub-paragraph (2) for the words “sub-paragraph (1)” there shall be substituted “ sub-paragraph (1A)(b) ”.
- (5) In sub-paragraph (3)—
- (a) for the words "that sub-paragraph shall not apply" there shall be substituted "relief shall not be available by virtue of Chapter II of Part V of the 1984 Act on the material transfer of value"; and
- (b) for the words "by virtue of sub-paragraph (1) above" there shall be substituted "by virtue of sub-paragraph (1 A)(b) above".
- (a) for the words “that sub-paragraph shall not apply” there shall be substituted “ relief shall not be available by virtue of Chapter II of Part V of the 1984 Act on the material transfer of value ”; and
- (b) for the words “by virtue of sub-paragraph (1) above” there shall be substituted “ by virtue of sub-paragraph (1A)(b) above ”.
## SCHEDULE 9
@@ -2546,15 +2049,15 @@
> (1) Subject to the following provisions, subsection (2) below applies where—
> (a) a person dies who immediately before his death was beneficially entitled to an interest in possession in property comprised in a settlement, and
> (b) within two years after his death the property becomes held on trusts (whether of that or another settlement) by virtue of which a direction under paragraph 1 of Schedule 4 to this Act is given in respect of the property.
> (2) Where this subsection applies, this Act shall have effect as if the property had on the death of the deceased become subject to the trusts referred to- in subsection (1)(b) above; and accordingly no disposition or other event occurring between the date of the death and the date on which the property becomes subject to those trusts shall, so far as it relates to the property, be a transfer of value or otherwise constitute an occasion for a charge to tax.
> (2) Where this subsection applies, this Act shall have effect as if the property had on the death of the deceased become subject to the trusts referred to in subsection (1)(b) above; and accordingly no disposition or other event occurring between the date of the death and the date on which the property becomes subject to those trusts shall, so far as it relates to the property, be a transfer of value or otherwise constitute an occasion for a charge to tax.
> (3) Where property becomes held on trusts of the kind specified in paragraph (b) of subsection (1) above as the result of proceedings before a court and could not have become so held without such proceedings, that paragraph shall have effect as if it referred to three years instead of two.
> (4) Subsection (2) above shall not apply if—
> (a) the disposition by which the property becomes held on the trusts referred to in subsection (1)(b) above depends on a condition or is defeasible; or
> (b) the property which becomes held on those trusts is itself an interest in settled property; or
> (c) the trustees who hold the property on those trusts have, for a consideration in money or money's worth, acquired an interest under a settlement in which the property was comprised immediately before the death of the person referred to in subsection (1)(a) above or at any time thereafter; or
> (d) the property which becomes held on those trusts does so for a consideration in money or money's worth, or is acquired by the trustees for such a consideration, or has at any time since the death of the person referred to in subsection (1)(a) above been acquired by any other person for such a consideration.
> (c) the trustees who hold the property on those trusts have, for a consideration in money or money’s worth, acquired an interest under a settlement in which the property was comprised immediately before the death of the person referred to in subsection (1)(a) above or at any time thereafter; or
> (d) the property which becomes held on those trusts does so for a consideration in money or money’s worth, or is acquired by the trustees for such a consideration, or has at any time since the death of the person referred to in subsection (1)(a) above been acquired by any other person for such a consideration.
> (5) If the value of the property when it becomes held on the trusts referred to in subsection (1)(b) above is lower than so much of the value transferred on the death of the person referred to in subsection (1)(a) as is attributable to the property, subsection (2) above shall apply to the property only to the extent of the lower value.
> (6) For the purposes of this section, a person shall be treated as acquiring property for a consideration in money or money's worth if he becomes entitled to it as a result of transactions which include a disposition for such consideration (whether to him or another) of that or other property.
> (6) For the purposes of this section, a person shall be treated as acquiring property for a consideration in money or money’s worth if he becomes entitled to it as a result of transactions which include a disposition for such consideration (whether to him or another) of that or other property.
.
@@ -2572,33 +2075,27 @@
> (15A)
> (1) In relation to settled property to which this paragraph applies, the provisions of this Part of this Schedule shall have effect with the modifications set out in the following sub-paragraphs.
> (2) This paragraph applies to property which became property to which paragraph 8 above applies on the occasion of a transfer of value which was made by a person beneficially entitled to an interest in possession in the property, and which (so far as the value transferred by it was attributable to the property)—
> (2) This paragraph applies to property which become property to which paragraph 8 above applies on the occasion of a transfer of value which was made by a person beneficially entitled to an interest in possession in the property, and which (so far as the value transferred by it was attributable to the property)—
> (a) was an exempt transfer by virtue of the combined effect of either—
> (i) sections 27 and 57(5) of this Act, or
> (ii) sections 27 and 57A of this Act, and
> (b) would but for those sections have been a chargeable transfer;
> and in the following sub-paragraphs "the person entitled to the interest in possession" means the person above referred to.
> and in the following sub-paragraphs “*the person entitled to the interest in possession*” means the person above referred to.
> (3) Paragraph 9(2) shall have effect as if for the reference to the settlor there were substituted a reference to either the settlor or the person entitled to the interest in possession.
> (4) Paragraph 10 shall not apply if the person entitled to the interest in possession had died at or before the time when the property became property to which paragraph 8 above applies; and in any other case shall have effect with the substitution in sub-paragraph (1) of the following words for the words from "on becoming" onwards—
> (4) Paragraph 10 shall not apply if the person entitled to the interest in possession had died at or before the time when the property become property to which paragraph 8 above applies; and in any other case shall have effect with the substitution in sub-paragraph (1) of the following words for the words from “on becoming”—
> (a) on becoming property to which the person entitled to the interest in possession is beneficially entitled, or
> (b) on becoming—
> (i) property to which that person's spouse is beneficially entitled, or
> (ii) property to which that person's widow or widower is beneficially entitled if that person has died in the two years preceding the time when it becomes such property;
> (i) property to which that person’s spouse is beneficilly entitled, or
> (ii) property to which that person’s widow or widower is beneficially entitled if that person has died in the two years preceding the time when it becomes such property;
> but paragraph (b) above applies only where the spouse, widow or widower would have become beneficially entitled to the property on the termination of the interest in possession had the property not then become property to which paragraph 8 above applies.
> (5) Paragraph 11 shall not apply.
> (6) Sub-paragraphs (1)to(3)of paragraph 14 shall have effect as if for the references to the settlor there were substituted references to the person entitled to the interest in possession.
> (7) Sub-paragraph (4) of paragraph 14 shall have effect with the insertion after paragraph (b) of the words
> and
> (c) was, in relation to either of those settlements, property to which paragraph 15A below applied,
> and with the substitution for the words from "settlor shall" onwards of the words "person entitled to the interest in possession shall, if the Board so determine, be construed as references to the person who was the settlor in relation to the current settlement.".
> (8) Sub-paragraph (5) of paragraph 14 shall have effect with the insertion after paragraph (b) of the words
> and
> (c) was, in relation to any of those settlements, property to which paragraph 15A below applied,
> and with the substitution for the words from "settlor shall" onwards of the words "person entitled to the interest in possession shall, if the Board so determine, be construed as references to any person selected by them who was the settlor in relation to any of the previous settlements or the current settlement."
> (6) Sub-paragraphs (1) to (3) of paragraph 14 shall have effect as if for the references to the settlor there were substituted references to the person entitled to the interest in possession.
> (7) Sub-paragraph (4) of paragraph 14 shall have effect with the insertion after paragraph (b) of the words “and(c) was, in relation to either of those settlements, property to which paragraph 15A below applied,”,
> and with the substitution for the words from “settlor shall” onwards of the words “person entitled to the interest in possession shall, if the Board so determine, be construed as references to the person who was the settlor in relation to the current settlement.”.
> (8) Sub-paragraph (5) of paragraph 14 shall have effect with the insertion after paragraph (b) of the words “and (c) was, in relation to any of those settlements, property to which paragraph 15A below applied,”,
> and with the substitution for the words from “settlor shall” onwards of the words “person entitled to the interest in possession shall, if the Board so determine,be construed as references to any person selected by them who was the settlor in relation to any of the previous settlements or the current settlement.”
> (9) Except in a case where the Board have made a determination under sub-paragraph (4) or (5) of paragraph 14, sub-paragraphs (6) and (7) of that paragraph shall have effect as if for the references to the settlor there were substituted references to the person entitled to the interest in possession.
> (10) Sub-paragraph (9) of paragraph 14 shall have effect with the substitution for the words "(if the settlement was made on death)" of the words "(if the person entitled to the interest in possession had died at or before the time when the property became property to which paragraph 8 above applies)".
.
> (10) Sub-paragraph (9) of paragraph 14 shall have effect with the substitution for the words “(if the settlement was made on death)” of the words “ (if the person entitled to the interest in possession had died at or before the time when the property became property to which paragraph 8 applies) ”.
##### 4
@@ -2618,25 +2115,29 @@
##### 1
- (1) In this Schedule—"month" means calendar month;
- "nominal volume" shall be construed in accordance with paragraph 7 below;
- "nominated price" shall be construed in accordance with paragraph 6 below;
- "nomination" means a nomination made in such manner as may be prescribed by regulations made by the Board;
- "proposed sale", "proposed supply" and "proposed appropriation" shall be construed in accordance with paragraphs (a) to (c) of sub-paragraph (1) of paragraph 2 below;
- "proposed delivery month" shall be construed in accordance with paragraph 3 below;
- "proposed transaction" means one falling within paragraph 2(1) below;
- "regulations made by the Board" means regulations under section 61(8) of this Act; and
- "Treasury regulations" means regulations under section 61(7) of this Act.
- (2) For the purposes of this Schedule, a participator's equity production from an oil field in any month is his share of the oil won from the field which, in that month, is either delivered or relevantly appropriated, other than oil which is delivered to the Secretary of State pursuant to a notice served by him.
- (1) In this Schedule—
- “*month*” means calendar month;
- “*nominal volume*” shall be construed in accordance with paragraph 7 below;
- “*nominated price*” shall be construed in accordance with paragraph 6 below;
- “*nominated*” means a nomination made in such manner as may be prescribed by regulations made by the Board;
- “*proposed sale*” ... shall be construed in accordance with paragraph (a) of sub-paragraph (1) of paragraph 2 below;
- “*proposed delivery month*” shall be construed in accordance with paragraph 12A below;
- “*proposed transaction*” means one falling within paragraph 2(1) below;
- “*regulations made by the Board*” means regulations under section 61(8) of this Act; and
- “*Treasury regulations*” means regulations under 61(7) of this Act.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Where an amount of oil is required to be delivered to the Secretary of State pursuant to a notice served by him, any oil which is inadvertently delivered to him in excess of the amount required shall be treated for the purposes of sub-paragraph (2) above as delivered pursuant to the notice.
### Transactions which may be nominated
@@ -2644,89 +2145,95 @@
- (1) The proposed transactions which may be nominated by a participator in an oil field for the purposes of this Schedule are—
- (a) proposed sales at arm's length by the participator of specified quantities of oil for delivery from that oil field; and
- (b) proposed supplies by the participator (being a company) to another company which is associated with the participator of specified quantities of oil for delivery from that oil field for use for refining either by that other company or by a third company associated with the participator; and
- (c) proposed relevant appropriations by the participator of specified quantities of oil won from that field; and
- (d) any other proposed transactions specified for the purposes of this sub-paragraph by Treasury regulations;
and two companies are associated with each other for the purposes of paragraph (b) above if they would be so associated for the purposes of section 115(2) of the Finance Act 1984.
- (a) proposed sales at arms’s length by the participator of specified quantities of oil for delivery from that oil field; and
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
....
- (2) Where a proposed sale is nominated before a contract of sale comes into being, any reference in this Schedule to the contract of sale is a reference to the subsequent contract for the sale of oil in accordance with the terms of the nomination; and, accordingly, if no such contract of sale comes into being, the nomination of the proposed sale shall be of no effect.
- (3) A participator may not nominate a proposed sale if—
- (a) under the terms of the contract of sale as originally entered into, the party undertaking to sell the oil is someone other than the participator; or
- (b) it is of a description prescribed for the purposes of this sub-paragraph by regulations made by the Board.
- (3) A particpator may not nominate a proposed sale if—
- (a) under the terms of the contract of sale as orginally entered into, the party undertaking to sell the oil is someone other than the participator; or
- (b) it is of a description prescibed for the purposes of this sub-paragraph by regulations made by the board.
### Period for which nomination has effect
##### 3
- (1) Subject to sub-paragraph (3) below, a nomination shall have effect with respect to proposed deliveries and appropriations of oil in one month only and, accordingly, where a nomination is of a proposed sale and the contract of sale provides for the supply of oil in more than one month, the nomination shall be effective only in relation to oil proposed to be delivered in the month for which the nomination has effect.
- (2) Subject to sub-paragraph (3) below, in relation to a nomination, "the proposed delivery month" means the month for which the nomination has effect in accordance with sub-paragraph (1) above.
- (3) In relation to a contract of sale of a description specified in the regulations, regulations made by the Board may permit a nomination to have effect as a nomination of a proposed sale for each of a number of months and, in relation to such a nomination, this Schedule shall have effect subject to such modifications as may be prescribed in the regulations.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Timing of nominations
##### 4
- (1) Subject to sub-paragraph (2) below, a nomination shall be effective only if it is made not later than five o'clock in the afternoon of the second business day following the date which, in relation to a proposed transaction of that description, is prescribed as the transaction base date.
- (2) Sub-paragraph (1) above does not apply to a nomination made on or before 16th February 1987 which specified a proposed transaction having a transaction base date earlier than 12th February 1987.
- (3) The transaction base date prescribed for a proposed sale may be a date earlier than the date on which a legally binding agreement for the sale of the oil in question comes into being but may not be later than the date on which there is an agreed price at which any oil which is to be delivered pursuant to the contract of sale will be sold.
- (4) In this paragraph—
- (a) "business day" has the same meaning as in the Bills of Exchange Act 1882;
- (b) "prescribed" means prescribed by regulations made by the Board.
- (1) If a nomination is made during business hours it shall be effective only if—
- (a) it is made within the period of two hours beginning with the transaction base time, and
- (b) it satisfies the requirements of paragraph 5.
- (1A) If a nomination is made outside business hours it shall be effective only if—
- (a) it is made within the period of two hours beginning with the transaction base time, and
- (b) it satisfies the requirements of paragraph 5 or 5A.
- (1B) For the purposes of this paragraph—
- (a) the transaction base time of a proposed transaction is such time on such date as the Board shall prescribe by regulations, and
- (b) “ *business hours* ” means the period beginning with 09.00 and ending with 17.00 ( UK time) on a business day (within the meaning of the Bills of Exchange Act 1882 (c. 61)).
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) The transaction base time prescribed for a proposed sale may be a time earlier than the time on which a legally binding agreement for the sale of the oil in question comes into being but may not be later than the time on which there is an agreed price at which any oil which is to be delivered pursuant to the contract of sale will be sold.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Content of nomination
##### 5
- (1) A nomination of a proposed transaction shall not be effective unless it specifies, with respect to that transaction,—
- (1) The requirements of this paragraph for a nomination in respect of a proposed transaction are,—
- (a) the name of the participator;
- (b) except in the case of a proposed appropriation, the name of the person to whom the oil is to be delivered;
- (c) the field from which the oil is to be delivered or relevantly appropriated;
- (d) the nominated price of the oil to be supplied or relevantly appropriated;
- (b) ..., the name of the person to whom the oil is to be sold;
- (c) the field from which the oil is to be delivered ...;
- (d) the nominated price of the oil to be delivered ...;
- (e) the nominal volume of that oil;
- (f) the proposed delivery month;
- (g) the transaction base date; and
- (g) the transaction base time; and
- (h) such other information as may be prescribed by the Board.
- (2) A nomination shall include a declaration that it is correct and complete and, in the case of a nomination of a proposed sale which is made before the contract of sale comes into being, shall also include a declaration that, to the best of the knowledge and belief of the participator making the nomination, a contract of sale will come into being in accordance with the terms of the nomination.
- (3) Where a participator fraudulently or negligently furnishes any incorrect information or makes any incorrect declaration in or in connection with a nomination he shall be liable to a penalty not exceeding £50,000 or, in the case of fraud, £100,000.
- (2) A nomination made under this paragraph shall include a declaration that it is correct and complete and, in the case of a nomination of a proposed sale which is made before the contract of sale comes into being, shall also include a declaration that, to the best of the knowledge and belief of the participator making the nomination, a contract of sale will come into being in accordance with the terms of the nomination.
- (3) Where a participator fraudently or negligently furnishes any incorrect information or makes any incorrect declaration in or in connection with a nomination made under this paragraph he shall be liable to a penalty not exceeding £50,000 or, in the case of fraud, £100,000 and the nomination shall not be effective.
### Nominated price
##### 6
- (1) Subject to sub-paragraph (3) below, in the case of a proposed sale, the "nominated price", in relation to the oil which is to be delivered pursuant to the sale, is the price specified in the contract of sale (expressed as a unit price) or, as the case may be, the formula under which, in accordance with the contract, the price for that oil (as so expressed) is to be determined.
- (2) Subject to sub-paragraph (3) below, in the case of a proposed supply or proposed appropriation, the "nominated price" of the oil concerned means the market value of that oil, ascertained in accordance with Schedule 3 to the principal Act and expressed as a unit price; and for the purposes of paragraph 5(d) above a statement that the nominated price of oil is its "market value" shall be sufficient.
- (3) Treasury regulations may—
- (a) vary the meaning of "nominated price" in relation to a proposed sale, supply or appropriation and, for that purpose, amend sub-paragraph (1) or sub-paragraph (2) above; and
- (b) make provision as to the meaning of "nominated price" in relation to a proposed transaction falling within paragraph 2(1 )(d) above.
- (1) ... in the case of a proposed sale, the “*nominated price*”, in relation to the oil which is to be delivered pursuant to the sale, is the price specified in the contract of sale (expressed as a unit price) or, as the case may be, the formula under which, in accordance with the contract, the price for that oil (as so expressed) is to be determined.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Nominal volume
@@ -2734,7 +2241,7 @@
- (1) Subject to sub-paragraph (3) below, in the case of a proposed sale, the nominal volume means the quantity of oil which it is proposed should be delivered under the contract of sale in the proposed delivery month.
- (2) Subject to sub-paragraph (3) below, in the case of a proposed supply or proposed appropriation, the nominal volume means the quantity of oil which the participator making the nomination proposes to supply or relevantly appropriate (as the case may be) in the proposed delivery month.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) In the case of any proposed transaction, the nominal volume means the quantity of oil expressed in such manner as may be prescribed by regulations made by the Board.
@@ -2746,85 +2253,47 @@
the nominal volume shall for those purposes be taken to be the specific volume referred to in paragraph (a) above, plus or minus the maximum tolerance permitted by the regulations.
- (5) Where a nominal volume is expressed as a specific volume of oil, plus or minus a tolerance, any reference in paragraph 9 below to the maximum nominal volume or the minimum nominal volume is a reference to that specific volume of oil, plus or minus the tolerance respectively.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) The Board may by regulations prescribe that in specified circumstances the nominal volume in relation to a delivery shall be treated as greater or less than the nominal volume ascertained in accordance with the preceding provisions of this paragraph.
- (7) Regulations under sub-paragraph (6)—
- (a) shall be made by statutory instrument, and
- (b) may not be made unless a draft has been laid before and approved by resolution of the House of Commons.
### Revision of nominations
##### 8
- (1) Except as provided by this paragraph, a nomination may not be amended or withdrawn.
- (2) If a participator who has made a nomination of a proposed sale does not, in whole or in part, fulfil his obligations under the contract of sale by the delivery of oil forming part of his equity production for the proposed delivery month, then, in accordance with regulations made by the Board, he may amend or withdraw the nomination if in his opinion—
- (a) there were good commercial reasons for the failure to fulfil those obligations; or
- (b) the failure was occasioned by circumstances over which neither he nor any person connected or associated with him had control.
- (3) An amendment or withdrawal of a nomination by a participator in accordance with sub-paragraph (2) above shall not be effective unless the Board give notice to the participator that the amendment or withdrawal is accepted, and the Board shall not give such a notice unless they are satisfied—
- (a) as to the matters mentioned in either paragraph (a) or paragraph (b) of sub-paragraph (2) above; and
- (b) if sub-paragraph (2)(a) above applies, that the failure was not part of a scheme or arrangement the main purpose of which was the avoidance of tax.
- (4) For the purposes of sub-paragraph (2)(b) above,—
- (a) section 533 of the Taxes Act (connected persons) applies; and
- (b) two companies of which one is a participator in an oil field are associated with each other if one has control over the other or both are under the control of the same person or persons;
and in paragraph (b) above "control" shall be construed in accordance with section 302 of the Taxes Act.
- (5) Where a nomination is amended in accordance with this paragraph, the preceding provisions of this Schedule shall apply in relation to it subject to such modifications as may be specified in regulations made by the Board.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Effective volume for nominated transactions
##### 9
- (1) The provisions of this paragraph have effect to determine, in relation to each nominated transaction, what is the effective volume of oil.
- (2) In relation to a proposed sale where the nominal volume is expressed as mentioned in paragraph 7(5) above and oil is in fact delivered under the contract of sale, the effective volume is whichever is the greater of—
- (a) the minimum nominal volume; and
- (b) so much of the total volume of oil actually delivered under the contract as does not exceed the maximum nominal volume.
- (3) In relation to any proposed sale which does not fall within sub-paragraph (2) above, the effective volume shall be taken to be the nominal volume.
- (4) In relation to a proposed supply or proposed appropriation, the effective volume is the nominal volume.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Aggregate effective volume for a month
##### 10
- (1) Subject to the provisions of this paragraph, for each month the aggregate effective volume of a participator's nominated transactions is the sum of the effective volumes of all of the proposed transactions nominated by him for that month.
- (2) If a participator's aggregate effective volume for any month, as determined under sub-paragraph (1) above, would exceed his equity production for that month—
- (a) his nominated transactions for that month shall be taken to be reduced by cancelling later nominations in priority to earlier ones until the cancellation of the next nominated transaction would produce an aggregate effective volume less than the participator's equity production; and
- (b) the effective volume of the latest remaining nominated transaction shall be taken to be reduced so far as necessary to secure that the aggregate effective volume is equal to the participator's equity production.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Aggregate nominated proceeds for a month
##### 11
- (1) For each month, a participator's aggregate nominated proceeds for the purposes of section 61 of this Act is the sum of—
- (a) the proceeds of each nominated transaction falling within sub-paragraph (2) below; and
- (b) the market value of any excess falling within sub-paragraph (3) below.
- (2) For each nominated transaction, the effective volume of which forms part of the participator's aggregate effective volume for the month, as defined in paragraph 10 above, the proceeds of the transaction means the effective volume multiplied by the nominated price.
- (3) If the participator's equity production for a month exceeds his aggregate effective volume for that month, as defined in paragraph 10 above, the market value of the excess shall be determined in accordance with Schedule 3 to the principal Act.
- (4) The reference in sub-paragraph (2) above to the nominated price is a reference to that price expressed in sterling; and regulations made by the Board shall make provision with respect to the conversion into sterling of any nominated price which is expressed in a currency other than sterling.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Blended oil
##### 12
In accordance with regulations made by the Board, a person who is a participator in two or more fields may nominate a proposed sale, supply or appropriation of oil which is blended oil, within the meaning of section 63 of this Act; and the preceding provisions of this Schedule shall have effect in relation to such a nomination subject to such modifications as may be prescribed by regulations made by the Board.
- (1) If a person is a participator in two or more oil fields which, in relation to any blended oil, are or are included among the originating fields, then, in accordance with regulations made by the Board, he may make a nomination, having effect with respect to all the originating fields in which he is a participator, of a proposed sale ... of the blended oil; and the preceding provisions of this Schedule shall have effect in relation to such a nomination subject to such modifications as may be prescribed by regulations made by the Board.
- (2) In sub-paragraph (1) above “ *blended oil* ” and “ *the originating fields* ” have the same meaning as in section 63 of this Act.
### Returns
@@ -2835,7 +2304,7 @@
> (3A) A return under this paragraph for a chargeable period shall—
> (a) state the amount (if any) which, in the case of the participator, is to be brought into account for that period in accordance with section 2(5)(e) of this Act;
> (b) contain such particulars as the Board may prescribe (whether before or after the passing of the Finance Act 1987) with respect to any nominated transaction under Schedule 10 to that Act—
> (i) the effective volume of which forms part of the participator's aggregate effective volume (construing those terms in accordance with that Schedule) for any calendar month comprised in that chargeable period; and
> (i) the effective volume of which forms part of the participator’s aggregate effective volume (construing those terms in accordance with that Schedule) for any calendar month comprised in that chargeable period; and
> (ii) which has not led to deliveries of oil or relevant appropriations of which particulars are included in the return by virtue of sub-paragraph (2) above; and
> (c) contain such other particulars as the Board may prescribe (as mentioned above) in connection with the application of section 61 of and Schedule 10 to the Finance Act 1987.
@@ -2851,91 +2320,43 @@
> (1) The market value of any oil in any calendar month shall be determined for the purposes of this Part of this Act in accordance with this paragraph.
- (3) In sub-paragraph (2) for the words from the beginning to "to be delivered" in paragraph (b) there shall be substituted—
> (2) Subject to the following provisions of this paragraph, the market value of any oil in a calendar month (in this paragraph referred to as "the relevant month") is the price at which oil of that kind might reasonably have been expected to be sold under a contract of sale satisfying the following conditions—
> (a) the contract is for the sale of the oil at arm's length to a willing buyer;
> (b) the contract is for the delivery of the oil at a time in the relevant month;
> (c) the contract is entered into within the period beginning at the beginning of the month preceding the relevant month and ending on the middle day of the relevant month or, if the Treasury by order so direct, within such other period as may be specified in the order;
> (d) the contract requires the oil to have been subjected to appropriate initial treatment before delivery;
> (e) the contract requires the oil to be delivered
.
- (4) In sub-paragraph (2), paragraph (c) shall become paragraph (f) and shall be amended as follows—
- (a) for the words "as at a particular time" there shall be substituted "as in a particular month"; and
- (b) for the words "as at that time" there shall be substituted "as in that month".
- (5) At the end of sub-paragraph (2) there shall be added the words "and, for the purposes of paragraph (c) above, the middle day of a month containing an even number of days shall be taken to be the last day of the first half of the month, and the power to make an order under that paragraph shall be exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of the Commons House of Parliament."
- (6) After sub-paragraph (2) there shall be inserted the following sub-paragraphs—
> (2A) For the purpose of sub-paragraph (2) above, the price of any oil in a calendar month shall be determined, subject to sub-paragraphs (2B) and (2C) below, by taking the average of the prices under actual contracts for the sale of oil of that kind—
> (a) which are contracts for the sale of oil by a participator in an oil field or by a company which, for the purposes of section 115(2) of the Finance Act 1984, is associated with such a participator; and
> (b) which, subject to sub-paragraph (2B) below, satisfy the conditions in paragraphs (a) to (e) of sub-paragraph (2) above; and
> (c) which do not contain terms as to payment which differ from those customarily contained in contracts for the sale at arm's length of oil of the kind in question.
> (2B) For the purposes of sub-paragraph (2A)(b) above, a contract shall be treated as fulfilling the condition in paragraph (c) of sub-paragraph (2) above if it contains provisions under which the price for oil to be delivered in the relevant month either is determined or subject to review in the period relevant for the purposes of that paragraph or is determined by reference to other prices which are themselves determined in that period, being prices for oil to be delivered in the relevant month.
> (2C) The average referred to in sub-paragraph (2A) above shall be determined—
> (a) by establishing an average price for oil of the kind in question for each business day within the period relevant for the purposes of sub-paragraph (2)(c) above; and
> (b) by taking the arithmetic mean of the average prices so established;
> and in this sub-paragraph "business day" has the same meaning as in the Bills of Exchange Act 1882.
> (2D) If or in so far as the Board are satisfied that it is impracticable or inappropriate to determine for the purposes of sub-paragraph (2) above the price of any oil in a calendar month as mentioned in sub-paragraph (2A) above (whether by virtue of an insufficiency of contracts satisfying the conditions or of information relating to such contracts or by virtue of the nature of the market for oil of the kind in question or for any other reason), that price shall be determined,—
> (a) so far as it is practicable and appropriate to do so by reference to such other contracts (whether or not relating to oil of the same kind) and in accordance with the principles in sub-paragraph (2C) above; and
> (b) so far as it is not practicable or appropriate to determine it as mentioned in paragraph (a) above, in such other manner as appears to the Board to be appropriate in the circumstances.
- (7) In sub-paragraph (3)—
- (a) for the words "as at a particular time" there shall be substituted "as in a particular month";
- (b) the words "at that time", where they first occur, shall be omitted;
- (c) after the words "was disposed of there shall be inserted "in that month";
- (d) for the words "and (2)" there shall be substituted "to (2D)";
- (e) for the words "as at that time" there shall be substituted "as in that month"; and
- (f) for "(2)(b)" there shall be substituted "(2)(e)".
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 2
In paragraph 2A of that Schedule (modifications in the case of oil consisting of gas)—
- (a) in sub-paragraphs (1) and (3) for "(1) and (2)" there shall be substituted "(1)to(2D)";
- (b) in sub-paragraph (2) for "(2)(a)" in each place where it occurs, there shall be substituted "(2)(d)"; and
- (c) in sub-paragraph (3) for "(2)(b)" there shall be substituted "(2)(e)".
- (a) in sub-paragraphs (1) and (3) for “(1) and (2)” there shall be substituted “ (1) to (2D) ”;
- (b) in sub-paragraph (2) for “(2)(a)” in each place where it occurs, there shall be substituted “ (2)(d) ”; and
- (c) in sub-paragraph (3) for “(2)(b)” there shall be substituted “ (2)(e) ”.
##### 3
In paragraph 3 of that Schedule (aggregate market value of oil for purposes of section 2(5))—
- (a) in sub-paragraph (1) the words "at the material time" shall be omitted; and
- (b) in sub-paragraph (2) the words from "and 'the material time' " onwards shall be omitted.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
## Part II — Consequential Amendments of Principal Act
##### 4
In section 5A (allowance of exploration and appraisal expenditure) in subsection (5C)(a) for "(c)" there shall be substituted "(f)".
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 5
In section 12 (interpretation) in subsection (1) in the definition beginning "calendar month" for the words from "and" to "have" there shall be substituted "has".
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 6
In section 14 (valuation of oil disposed of or appropriated in certain circumstances)—
- (a) in subsections (1) and (2) for the words "at a particular time" there shall be substituted "in a particular month";
- (b) in subsection (5) for the words from the beginning to "this Act", in the first place where those words occur, there shall be substituted "In subsections (4) and (4A) above "calendar month" means a month of the calendar year"; and
- (c) in paragraph (a) of subsection (5) for "(2)(c)" there shall be substituted "(2)(f)" and for "(c)" there shall be substituted "(f)".
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 7
@@ -2951,13 +2372,13 @@
In this Schedule—
- (a) "the principal section" means section 63 of this Act;
- (b) "blended oil" and "the originating fields" have the same meaning as in the principal section;
- (c) a "method of allocation" means such a method as is referred to in subsection (2) of the principal section; and
- (d) "the oil taxation legislation" means Part I of the principal Act and any enactment construed as one with that Part.
- (a) “*the principal section*” means section 63 of this Act;
- (b) “*blended oil*” and “*the originating fields*” have the same meaning as in the principal section;
- (c) a “*method of allocation*” means such a method as is referred to in subsection (2) of the principal section; and
- (d) “*the oil taxation legislation*” means Part I of the principal Act and any enactment construed as one with that Part.
### Amendments of allocation by the Board
@@ -2967,7 +2388,7 @@
- (a) they shall give notice in writing to each of the participators in those fields informing them of that fact and proposing amendments which would render the method acceptable to the Board; and
- (b) subject to the following provisions of this Schedule, for any chargeable period beginning after the date of a notice under paragraph (a) above, the method of allocation shall be treated for the purposes of the oil taxation legislation as amended in accordance with the Board's proposals.
- (b) subject to the following provisions of this Schedule, for any chargeable period beginning after the date of a notice under paragraph (a) above, the method of allocation shall be treated for the purposes of the oil taxation legislation as amended in accordance with the Board’s proposals.
### Appeals
@@ -2977,9 +2398,9 @@
- (2) Where notice of appeal is given under sub-paragraph (1) above—
- (a) the Board shall give notice in writing to all those participators in the originating fields who have not given notice of appeal and they shall, by virtue of that notice, become parties to the appeal and be entitled to appear accordingly;
- (b) if, before the determination of the appeal by the Special Commissioners, the Board and the participators in the originating fields agree that the method of allocation concerned should not be amended or should have effect with particular amendments, the same consequences shall ensue as if the Commissioners had determined the appeal to that effect;
- (a) the Board shall give notice in writing to all those participators in the originating fields who have not given notice of appeal and they shall, by virtue of that notice, become parties to the appeal and be entitled to appear accordingly.
- (b) if, before the determination of the appeal by the Special Commisssioners, the Board and the participators in the originating fields agree that the method of allocation concerned should not be amended or should have effect with particular amendments, the same consequences shall ensue as if the Commissioners had determined the appeal to that effect;
- (c) if, on the hearing of the appeal, it appears to the majority of the Commissioners present that the method of allocation concerned is satisfactory, with or without modifications, for the purposes of the oil taxation legislation they shall allow the appeal and, where appropriate, shall amend the method of allocation accordingly for those purposes; and
@@ -2991,7 +2412,7 @@
## SCHEDULE 13
## Part I — Section to be Inserted after Section 5A of the Principal Act
## Part I — Section to be Inserted After Section 5A of the Principal Act
## Part II — Amendments Relating to the New Allowance
@@ -3006,32 +2427,32 @@
##### 2
In section 3 of that Act, in subsection (3) (expenditure not allowable under that section if already allowed under other provisions) after the words "section 5A" there shall be inserted "or section 5B".
In section 3 of that Act, in subsection (3) (expenditure not allowable under that section if already allowed under other provisions) after the words “section 5A” there should be inserted “ or section 5B ”.
##### 3
In section 9 of that Act (limit on amount of tax payable) in subsection (2)(a)(ii) for the words "and (f)" there shall be substituted "(f) and (g)".
In section 9 of that Act (limit on amount of tax payable) in subsection (2)(a)(ii) for the words “and (f)” there shall be inserted “ (f) and (g) ”.
##### 4
In paragraph 2 of Schedule 2 to that Act (returns by participators) in sub-paragraph (2A) (initial return to include particulars of certain expenditure already claimed) for the words "exploration and appraisal expenditure to which section 5A" there shall be substituted "expenditure to which section 5A or section 5B".
In paragraph 2 of Schedule 2 to that Act (returns by participators) in sub-paragraph (2A) (initial return to include particulars of certain expenditure already claimed) for the words “exploration and appraisal expenditure to which section 5A” there shall be substituted “ expenditure to which section 5A or section 5B ”.
##### 5
- (1) In Schedule 7 to that Act (claim for allowance of certain exploration expenditure etc.) at the end of paragraph 1(1 )(b) there shall be added
- (1) In Schedule 7 to that Act (claim for allowance of certain exploration expenditure etc.) at the end of paragraph 1(1)(b) there shall be added
> or
> (c) of any research expenditure allowable under section 5B of this Act
.
- (2) In paragraph 1(3) of that Schedule after the words "section 5 A" there shall be inserted "or section 5B".
- (2) In paragraph 1(3) of that Schedule after the words “section 5A” there shall be inserted “ or section 5B ”.
### The Petroleum Revenue Tax Act 1980
##### 6
In the Schedule to the Petroleum Revenue Tax Act 1980 (computation of payment on account) in paragraph 2(4) for the words "or (f)" there shall be substituted "(f) or (g)".
In the Schedule to the Petroleum Revenue Tax Act 1980 (computation of payment on account) in paragraph 2(4) for the words “or (f)” there shall be substituted “ (f) or (g) ”.
### The Finance Act 1980
@@ -3045,7 +2466,7 @@
##### 8
In section 111 of the Finance Act 1981 (restriction of expenditure supplement) in subsection (3)(a) the words following "the principal Act" (which specify certain types of expenditure and losses) shall be omitted.
In section 111 of the Finance Act 1981 (restriction of expenditure supplement) in subsection (3)(a) the words following “the principal Act” (which specify certain types of expenditure and losses) shall be omitted.
### The Finance Act 1984
@@ -3053,15 +2474,15 @@
- (1) In section 113 of the Finance Act 1984 (restriction on PRT reliefs), in subsection (1)—
- (a) the words "abortive exploration expenditure or exploration and appraisal" shall be omitted; and
- (b) after the words "section 5A" there shall be inserted "or section 5B".
- (a) the words “*abortive exploration expenditure or exploration and appraisal*” shall be omitted; and
- (b) after the words “section 5A” there shall be inserted “ or section 5B ”.
- (2) In subsection (6) of that section—
- (a) after the words "section 5A" there shall be inserted "or section 5B"; and
- (b) for the words "paragraph 16 or paragraph 16A" there shall be substituted "paragraphs 16 to 16B".
- (a) after the words “section 5A” there shall be inserted “ or section 5B ”; and
- (b) for the words “paragraph 16 or paragraph 16A” there shall be substituted “ paragraphs 16 to 16B ”.
## Part III — Receipts to be Set Against Allowable Expenditure
@@ -3069,15 +2490,15 @@
In this Part of this Schedule—
- "allowable expenditure" means expenditure which, in accordance with section 5B of the principal Act, is allowable on a claim made by a participator under Schedule 7 to that Act; and
- "qualifying receipt" means a sum the amount of which falls, by virtue of subsection (6) of section 5 of the principal Act, to be applied by way of reduction in the amount of expenditure which would otherwise be allowable expenditure.
- “*allowable expenditure*” means expenditure which, in accordance with section 5B of the principal Act, is allowable on a claim made by a participator under Schedule 7 to that Act; and
- “*qualifying receipt*” means a sum the amount of which falls, by virtue of subsection (6) of section 5 of the principal Act, to be applied by way of reduction in the amount of expenditure which would otherwise be allowable expenditure.
##### 11
- (1) A return made by a participator for a chargeable period under paragraph 2 of Schedule 2 to the principal Act shall give details of any qualifying receipt (whether received by him or by a person connected with him) of which details have not been given in a return made by him for an earlier chargeable period.
- (2) Section 533 of the Taxes Act (connected persons) applies for the purposes of this paragraph.
- (2) Section 839 of the Taxes Act (connected persons) applies for the purposes of this paragraph.
##### 12
@@ -3087,7 +2508,7 @@
- (b) as a result of the receipt (whether before or after the making of the claim) of a qualifying receipt, the amount allowed by way of allowable expenditure on the claim exceeds what it should have been.
- (2) In determining, in a case where this paragraph applies, the assessable profit or allowable loss accruing to the participator in the chargeable period in which the qualifying receipt is received, the amount of the excess referred to in sub-paragraph (1)(b) above shall be taken into account under section 2 of the principal Act as an amount which is to be included among the positive amounts referred to in subsection (3)(a) of that section.
- (2) In determining, in a case where this paragraph applies, the assessable profit or allowable loss accruing to the participator in the chargeable period in which the qualifying receipt is recived, the amount of the excess referred to in sub-paragraph (1)(b) above shall be taken into account under section 2 of the principal Act as an amount which is to be included among the positive amounts referred to in subsection (3)(a) of that section.
- (3) In the application of section 9 of the principal Act (limit on amount of tax payable) to a chargeable period in respect of which sub-paragraph (2) above applies, the amount of the excess referred to in sub-paragraph (1)(b) above shall be deducted from the amount which would otherwise be the total ascertained under subsection (2)(a)(ii) of that section and, if the amount of that excess is greater than the amount which would otherwise be that total, that total shall be a negative amount equal to the difference.
@@ -3103,7 +2524,7 @@
- (2) Without prejudice to sub-paragraph (1) above, an election shall specify—
- (a) the expenditure in respect of which it is made and the amount of that expenditure (in this Part of this Schedule referred to as "the elected amount"), which shall not exceed 10 per cent., which is to be allowable under the principal section;
- (a) the expenditure in respect of which it is made and the amount of that expenditure (in this Part of this Schedule referred to as “*the elected amount*”), which shall not exceed 10 per cent., which is to be allowable under the principal section;
- (b) the field of origin and the receiving field;
@@ -3141,7 +2562,7 @@
- (b) notice of that assessment or determination is given to the participator or, as the case may be, the associated company, under paragraph 10 of Schedule 2 to the principal Act.
- (2) Where the earliest date for the making of an election in respect of a particular amount of expenditure is a date determined under paragraph 2(2)(b) or paragraph 2(2)(c) above, such an election may be made at any time before notice is given as mentioned in sub-paragraph (1 )(b) above or, if it is later, before the expiry of the period of thirty days beginning on the day following that earliest date.
- (2) Where the earliest date for the making of an election in respect of a particular amount of expenditure is a date determined under paragraph 2(2)(b) or paragraph 2(2)(c) above, such an election may be made at any time before notice is given as mentioned in sub-paragraph (1)(b) above or, if it is later, before the expiry of the period of thirty days beginning on the day following that earliest date.
### Two or more elections relating to same expenditure
@@ -3149,11 +2570,7 @@
Where more than one election is made in respect of the same amount of expenditure—
- (a) the maximum of 10 per cent. specified in paragraph 1(2)(a) above shall be cumulative; and
- (b) if the elected amount specified in a second or subsequent election is such that, when aggregated with the elected amount or amounts specified in the earlier election or elections, it would exceed 10 per cent., that second or subsequent election shall have effect as if it specified such an elected amount as would, when so aggregated, be equal to 10 per cent. of the expenditure concerned; and
- (c) an election shall be of no effect if it is made after one or more earlier elections have specified (or been treated by paragraph (b) above as having specified) an elected amount or an aggregate of elected amounts equal to 10 per cent.
- (a) the maximum of 10 per cent
## Part II — Effect on Receiving Field
@@ -3183,23 +2600,21 @@
##### 8
- (1) For the purposes of the principal section "relevant new field" means, subject to sub-paragraph (2) below, an oil field—
- (1) For the purposes of the principal section “*relevant new fields*” means, subject to sub-paragraph (2) below, an oil field—
- (a) no part of which lies in a landward area, within the meaning of the Petroleum (Production) Regulations 1982 or in an area to the East of the United Kingdom and between latitudes 52° and 55° North; and
- (b) for no part of which consent for development has been granted to the licensee by the Secretary of State before 17th March 1987; and
- (c) for no part of which a programme of development had been served on the licensee or approved by the Secretary of State before that date.
- (2) In determining, in accordance with sub-paragraph (1) above, whether an oil field (in this sub-paragraph referred to as "the new field") is a relevant new field, no account shall be taken of a consent for development granted before 17th March 1987 or a programme of development served on the licensee or approved by the Secretary of State before that date if—
- (a) in whole or in part that consent or programme related to another oil field for which a determination under Schedule 1 to the principal Act was made before the determination under that Schedule for the new field; and
- (b) for no part of which consent for development has been granted to the licensee by the Secretary of State before 17th March 1987; and(c) for no part of which a programme of development had been served on the licensee or approved by the Secretary of State before that date.
- (2) In determining, in accordance with sub-paragraph (1) above, whether an oil field (in this sub-paragraph referred to as “*the new field*”) is a relevant new field, no account shall be taken of a consent for develoment granted before 17th March 1987 or a programme of development served on the licensee or approved by the Secretary of State before that date if—
- (a) in whole or part that consent or programme related to another oil field for which a determination under Schedule 1 to the principal Act was made before the determination under that Schedule for the new field; and
- (b) on or after 17th March 1987 a consent for development is or was granted or a programme of development is or was served on the licensee or approved by the Secretary of State and that consent or programme relates, in whole or in part, to the new field.
##### 9
- (1) In paragraph 8 above "development" means—
- (1) In paragraph 8 above “*development*” means—
- (a) the erection or carrying out of permanent works for the purpose of getting oil from the field or for the purpose of conveying oil won from the field to a place on land; or
@@ -3207,7 +2622,7 @@
and consent for development does not include consent which is limited to the purpose of testing the characteristics of an oil-bearing area and does not relate to the erection or carrying out of permanent works.
- (2) In sub-paragraph (1) above "permanent works" means any structures or other works whatsoever which are intended by the licensee to be permanent and are neither designed to be moved from place to place without major dismantling nor intended by the licensee to be used only for searching for oil.
- (2) In sub-paragraph (1) above “*permanent works*” means any structures or other works whatsoever which are intended by the licensee to be permanent and are neither designed to be moved from place to place without major dismantling nor intended by the licensee to be used only for searching for oil.
### Associated companies
@@ -3215,13 +2630,13 @@
- (1) For the purposes of the principal section, a company is an associated company of a participator (being itself a company) making an election under that section if—
- (a) throughout that part of the relevant period in which both were in existence one was a 51 per cent subsidiary of the other and the other was not a 51 per cent subsidiary of any company; or
- (b) each of them was, throughout that part of the relevant period in which it was in existence, a 51 per cent subsidiary of a third company which was not itself a 51 per cent subsidiary of any company.
- (2) In this paragraph "company" means any body corporate and section 532 of the Taxes Act (subsidiaries) applies for the purposes of this paragraph.
- (3) For the purposes of this paragraph the relevant period ends on the date on which the election in question is made and begins—
- (a) throughout that part of the relevant period in which both were in existence one was a 51 per cent. subsidary of the other and the other was not a 51 per cent. subsidary of any company; or
- (b) each of them was, throughout that part of the relevant period in which it was in existence, a 51 per cent, subsidary of a third company which was not itself a 51 per cent. subsidiary of any company.
- (2) In this paragraph “*company*” means any body corporate and section 838 of the Taxes Act (subsidiaries) applies for the purposes of this paragraph.
- (3) For the purposes of this paragraph the relevant periods ends on the date on which the election in question is made and begins—
- (a) in the case of an election relating to expenditure incurred in the first claim period of the field of origin, on the date on which any part of that field was first determined under Schedule 1 to the principal Act; and
@@ -3241,15 +2656,15 @@
- (c) a notice of variation is served under paragraph 9 of Schedule 5 to the principal Act; and
- (d) on that notice of variation becoming effective for the purposes of the said paragraph 9, the amount of the expenditure referred to in paragraph (a) above is taken for the purposes of Part I of the principal Act as having been reduced.
- (d) on that notice of variation becoming effective for the purposes of the said paragraph 9, the amount of the expenditure referred to in paragraph (a) above is taken for the purposes of Part I of the Principal Act as having been reduced.
- (2) In sub-paragraph (3) below—
- (a) "the original expenditure" means the amount of expenditure referred to in sub-paragraph (1)(a) above, disregarding the effect of the notice of variation;
- (b) "the reduced expenditure" means the amount of that expenditure after the notice of variation became effective for the purposes of paragraph 9 of Schedule 5 to the principal Act; and
- (c) "the expenditure originally allowable" means the amount of the original expenditure which, having regard to the election or elections in respect of that expenditure but disregarding the effect of the notice of variation, was allowable in accordance with the principal section.
- (a) “*the original expenditure*” means the amount of expenditure referred to in sub-paragraph (1)(a) above, disregarding the effect of the notice of variation;
- (b) “*the reduced expenditure*” means the amount of expenditure after the notice of variation became effective for the purposes of paragraph 9 of Schedule 5 to the principal Act; and
- (c) “*the expenditure originally allowable*” means the amount of the original expenditure which, having regard to the election or elections in respect of that expenditure but disregarding the effect of the notice of variation, was allowable in accordance with the principal section.
- (3) If the expenditure originally allowable exceeds 10 per cent. of the reduced expenditure, the principal section shall have effect as if the election or elections had specified an amount of that expenditure equal (or equal in the aggregate) to 10 per cent. of the reduced expenditure and, where there was more than one election, paragraph 4 above shall be taken to have applied accordingly.
@@ -3299,9 +2714,9 @@
### The Capital Allowances Act 1968 (c. 3)
##### 1
In section 34(4) of the Capital Allowances Act 1968 for the words "Part VIII of the principal Act" there shall be substituted the words "Part III of the Finance Act 1976".
##### 1–11
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### The Income and Corporation Taxes Act 1970 (c. 10)
@@ -3477,28 +2892,17 @@
##### 12
In Schedule 1 to the Interpretation Act 1978 for the definitions of "the Corporation Tax Acts" and "the Tax Acts" there shall be substituted the following definitions—
> - The Corporation Tax Acts" means the enactments relating to the taxation of the income and chargeable gains of companies and of company distributions (including provisions relating to income tax);;
> - "The Tax Acts" means the Income Tax Acts and the Corporation Tax Acts.
In Schedule 1 to the Interpretation Act 1978 for the definitions of “the Corporation Tax Acts” and “the Tax Acts” there shall be substituted the following definitions—
- “*The Corporation Tax Acts*” means the enactments relating to the taxation of the income and chargeable gains of companies and of company distributions (including provisions relating to income tax);
- “*The Tax Acts*” means the Income Tax Acts and the Corporation Tax Acts.
### The Finance Act 1980 (c. 48)
##### 13
- (1) At the end of section 53 of the Finance Act 1980 there shall be added the following subsection—
> (6) In sections 77, 79 and 80 of the Taxes Act references to section 72 of that Act shall be read as including references to this section.
- (2) In Schedule 10 to that Act—
- (a) at the end of paragraph 1(1)(b) there shall be added the words—
> and the matters as to which the Board are required to be so satisfied are referred to below as 'the relevant requirements'
; and
- (b) in paragraph 3(1) for "they cease to be satisfied as mentioned in paragraph 1 above" there shall be substituted "any of the relevant requirements cease to be satisfied".
##### 13–17
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### The Finance Act 1981 (c. 35)
@@ -4101,39 +3505,3 @@
[^key-5b5f9f81db84839014651815d735b2a5]: Words in [Sch. 10 para. 12(1)](https://www.legislation.gov.uk/ukpga/1987/16/schedule/10/paragraph/12/1) repealed (with effect in accordance with s. 150(14) of the amending Act) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [s. 150(12)](https://www.legislation.gov.uk/ukpga/2006/25/section/150/12), [Sch. 26 Pt. 5(2)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/26/part/5/2)
[^key-0bf3ce9bd9629869c868cf34cdc24adf]: Sch. 11 para. 1(3)-(7) repealed (with effect in accordance with Sch. 26 Pt. 5(1) Note 2 of the amending Act) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 26 Pt. 5(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/26/part/5/1)
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Records relating to importation and exportation.
#### Contract notes.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Crown exemption.
#### Nomination of disposals and appropriations.
#### Market value of oil to be determined on a monthly basis.
#### Blends of oil from two or more fields.
#### Abolition of enactments relating to exchange control.
#### Arrangements specified in Orders in Council relating to double taxation relief etc.
#### Relief for research expenditure.
#### Abolition of enactments relating to exchange control.
#### Arrangements specified in Orders in Council relating to double taxation relief etc.
#### Blends of oil from two or more fields.
#### Abolition of enactments relating to exchange control.
#### Arrangements specified in Orders in Council relating to double taxation relief etc.
#### Securities, other business property and agricultural property.
1987-05-15
Finance Act 1987
original version
Text at this date