Finance Act 1995

• (b) to an amount shown in a profit and loss account (“an earlier account”) prepared in accordance with the scheme in a form in which it stood before the alteration,

then, for the purposes of the determination of the pool, the amount shown in the earlier account shall be recalculated using the same method as that used to calculate the amount mentioned in paragraph (a) above.

• (10) The alteration of the existing scheme shall be treated as being within subsection (8) of section 177B of the Taxes Act 1988 (alterations which are registrable and which once registered cannot give rise to Board’s power of cancellation).

• (11) In subsections (6) to (10) above “an existing scheme” means a scheme which, immediately before the day on which this Act is passed, is registered under Chapter III of Part V of the Taxes Act 1988.

• (12) After paragraph 19 of Schedule 8 to the Taxes Act 1988 there shall be inserted—

(19A) (1) The Treasury may by order amend paragraph 19 above so as to add to, delete or vary any of the items mentioned in sub-paragraph (6) of that paragraph. (2) In this paragraph references to an order are references to an order under sub-paragraph (1) above. (3) Subject to sub-paragraphs (4) to (8) below, any amendment or amendments made by virtue of an order shall have effect in relation to the preparation, for the purposes of a scheme, of a profit and loss account in respect of a period beginning on or after the day on which the order comes into force. (4) Any amendment or amendments made by virtue of an order shall not have effect in relation to an existing scheme unless, before the end of the period of 6 months beginning with the day on which the order comes into force, the scheme is altered to take account of the amendment or amendments. (5) Sub-paragraphs (6) to (8) below apply where, before the end of the period mentioned in sub-paragraph (4) above, an existing scheme is altered as mentioned in that sub-paragraph. (6) The provision made by the scheme in compliance with paragraph 20(1) below shall not prevent a profit and loss account being prepared in accordance with the alteration. (7) Where the distributable pool would but for this sub-paragraph be determined by reference— (a) to an amount shown in a profit and loss account prepared in accordance with the altered scheme, and (b) to an amount shown in a profit and loss account (“an earlier account”) prepared in accordance with the scheme in a form in which it stood before the alteration, then, for the purposes of the determination of the pool, the amount shown in the earlier account shall be recalculated using the same method as that used to calculate the amount mentioned in paragraph (a) above. (8) The alteration of the existing scheme shall be treated as being within subsection (8) of section 177B. (9) An order may include such supplementary, incidental or consequential provisions as appear to the Treasury to be necessary or expedient. (10) In this paragraph “an existing scheme”, in relation to an order, means a scheme which, immediately before the day on which the order comes into force, is a registered scheme.

Part-time workers: miscellaneous provisions

137

• (1) In Schedule 8 to the Taxes Act 1988 (profit-related pay schemes) paragraph 8(a) (employees working less than 20 hours a week excluded by scheme from receiving profit-related pay) shall be omitted.

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

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

• (4) In Part V of Schedule 9 to the Taxes Act 1988 (profit sharing schemes) in paragraph 36(1)(a) (certain full-time employees and directors must be eligible to participate in scheme on similar terms) for the words “a full-time employee” there shall be substituted “ an employee ”.

• (5) In Schedule 5 to the Finance Act 1989 (employee share ownership trusts) in paragraph 4(2)(c) (trust deed must provide that certain persons are beneficiaries if they work at rate of at least 20 hours a week) for the words “at that given time he worked as an employee or” there shall be substituted “ in the case of a director, at that given time he worked as a ”.

• (6) Subsection (1) above shall apply in relation to any scheme not registered before the day on which this Act is passed.

• (7) Subsection (4) above shall apply in relation to any scheme not approved before the day on which this Act is passed.

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

• (9) Subsection (5) above shall apply in relation to trusts established on or after the day on which this Act is passed; and for this purpose a trust is established when the deed under which it is established is executed.

Charities, etc.: lotteries

138

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

Sub-contractors in the construction industry

139

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

Valuation of trading stock on discontinuance of trade

140

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

Incapacity benefit

141

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

Annuities purchased where certain claims or actions are settled

142

The following sections shall be inserted after section 329 of the Taxes Act 1988—

(329A) (1) In a case where— (a) an agreement is made settling a claim or action for damages for personal injury, (b) under the agreement the damages are to consist wholly or partly of periodical payments, and (c) under the agreement the person entitled to the payments is to receive them as the annuitant under one or more annuities purchased for him by the person against whom the claim or action is brought or, if he is insured against the claim concerned, by his insurer, the agreement is for the purposes of this section a qualifying agreement. (2) In a case where— (a) an agreement is made settling a claim or action for damages for personal injury, (b) under the agreement the damages are to consist wholly or partly of periodical payments, and (c) a later agreement is made under which the person entitled to the payments is from a future date to receive them as the annuitant under one or more annuities purchased for him by the person against whom the claim or action is brought or, if he is insured against the claim concerned, by his insurer, the agreement mentioned in paragraph (c) above is for the purposes of this section a qualifying agreement. (3) Subsection (4) below applies where— (a) a person receives a sum as the annuitant under an annuity purchased for him pursuant to a qualifying agreement, or (b) a person receives a sum on behalf of the annuitant under an annuity purchased for the annuitant pursuant to a qualifying agreement. (4) Where this subsection applies the sum shall not be regarded as the recipient’s or annuitant’s income for any purposes of income tax and accordingly shall be paid without any deduction under section 349(1). (5) Subsections (6) to (10) below apply for the purposes of subsection (1) above. (6) The periodical payments may be for the life of the claimant, for a specified period or of a specified number or minimum number or include payments of more than one of those descriptions. (7) The amounts of the periodical payments (which need not be at a uniform rate or payable at uniform intervals) may be— (a) specified in the agreement, with or without provision for increases of specified amounts or percentages, (b) subject to adjustment in a specified manner so as to preserve their real value, or (c) partly specified as mentioned in paragraph (a) and partly subject to adjustment as mentioned in paragraph (b) above. (8) The annuity or annuities must be such as to provide sums which as to amount and time of payment correspond to the periodical payments described in the agreement. (9) Personal injury includes any disease and any impairment of a person’s physical or mental condition. (10) A claim or action for personal injury includes— (a) such a claim or action brought by virtue of the Law Reform (Miscellaneous Provisions) Act 1934; (b) such a claim or action brought by virtue of the Law Reform (Miscellaneous Provisions) Act (Northern Ireland) 1937; (c) such a claim or action brought by virtue of the Damages (Scotland) Act 1976; (d) a claim or action brought by virtue of the Fatal Accidents Act 1976; (e) a claim or action brought by virtue of the Fatal Accidents (Northern Ireland) Order 1977. (11) For the purposes of subsection (2) above— (a) subsections (6), (9) and (10) above apply; (b) subsection (7) above applies as if the reference to the agreement were to that mentioned in subsection (2)(a) above; (c) subsection (8) above applies as if the reference to periodical payments described in the agreement were to periodical payments described in the agreement mentioned in subsection (2)(a) above and falling to be made after the later agreement takes effect. (12) This section does not apply unless the sum concerned is received after the day on which the Finance Act 1995 is passed, but it is immaterial when— (a) the agreement mentioned in subsection (1) above is made or takes effect, or (b) either of the agreements mentioned in subsection (2) above is made or takes effect. (329B) (1) In a case where— (a) an agreement is made settling a claim or action for damages for personal injury, (b) under the agreement the damages are to consist wholly or partly of periodical payments, (c) the person against whom the claim or action is brought (or, if he is insured against the claim concerned, his insurer) purchases one or more annuities, and (d) a later agreement is made under which the annuity is, or the annuities are, assigned in favour of the person entitled to the payments so as to secure that from a future date he receives the payments as the annuitant under the annuity or annuities, the agreement mentioned in paragraph (d) above is for the purposes of this section a qualifying agreement. (2) Subsection (3) below applies where— (a) a person receives a sum as the annuitant under an annuity assigned in his favour pursuant to a qualifying agreement, or (b) a person receives a sum on behalf of the annuitant under an annuity assigned in the annuitant’s favour pursuant to a qualifying agreement. (3) Where this subsection applies the sum shall not be regarded as the recipient’s or annuitant’s income for any purposes of income tax and accordingly shall be paid without any deduction under section 349(1). (4) For the purposes of subsection (1) above— (a) subsections (6), (9) and (10) of section 329A apply; (b) subsections (7) and (8) of section 329A apply as if references to the agreement were to that mentioned in subsection (1)(a) above. (5) This section does not apply unless the sum concerned is received after the day on which the Finance Act 1995 is passed, but it is immaterial when either of the agreements mentioned in subsection (1) above is made or takes effect.

Lloyd’s underwriters: new-style special reserve funds

143

• (1) In Schedule 20 to the Finance Act 1993 (Lloyd’s underwriters: special reserve funds) paragraph 2 (general requirements about special reserve funds) shall be deemed to have been enacted with the modification in subsection (2) below.

• (2) For sub-paragraphs (2) and (3) there shall be substituted—

(2) The arrangements must be such as to secure that— (a) any income arising to the trustee or trustees of the special reserve fund shall be added to the capital of the fund and held on the same trusts as the fund; and (b) except as required or permitted by this Schedule, no payments shall be made into or out of the special reserve fund.

Local government residuary body

144

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

Payment of rent &c., under deduction of tax

145

• (1) In section 119(1) of the Taxes Act 1988 (rent, &c., payable in connection with mines, quarries and similar concerns), the words from “and, subject to subsection (2) below, shall be subject to deduction of income tax” to the end shall cease to have effect.

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

• (3) The provisions of this section have effect in relation to payments made after the passing of this Act.

Part IV — Petroleum Revenue Tax

Restriction of unrelievable field losses

146

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

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

• (3) After subsection (4) of that section there shall be inserted—

(5) Subsections (6) to (9) below apply if— (a) a claim is made for the allowance of an unrelievable field loss; and (b) the person to whom the loss accrued made a claim or election for the allowance of any expenditure unrelated to that field; and (c) that claim or election was received by the Board on or after 29th November 1994; and (d) the whole or a part of the expenditure to which the claim or election relates is allowed and, accordingly, falls to be taken into account under section 2(8)(a) of this Act for a chargeable period (whether beginning before or after 29th November 1994). (6) Subject to subsection (7) below, where this subsection applies, from the amount which, apart from this subsection, would be the amount of the unrelievable field loss referred to in paragraph (a) of subsection (5) above there shall be deducted an amount equal to so much of any expenditure unrelated to the field as is allowed on a claim or election as mentioned in paragraph (d) of that subsection. (7) If— (a) claims are made for the allowance of more than one unrelievable field loss derived from the same abandoned field, and (b) the person to whom the loss accrued is the same in respect of each of the unrelievable field losses, subsection (6) above shall have effect as if the deduction referred to in that subsection fell to be made from the aggregate amount of those losses. (8) Where subsection (7) above applies, the deduction shall be set against the unrelievable field losses in the order in which the claims for the allowance of each of those losses were received by the Board. (9) In subsections (5) and (6) above, “expenditure unrelated to the field” means— (a) expenditure allowable under any of sections 5, 5A and 5B of this Act; (b) expenditure allowable under this section (derived from a different abandoned field); or (c) expenditure falling within section 65 of the Finance Act 1987 which is accepted by the Board as allowable in accordance with Schedule 14 to that Act; and, in relation to expenditure falling within section 65 of the Finance Act 1987, “election” means an election under Part I of Schedule 14 to that Act.

Removal of time limits for claims for unrelievable field losses

147

• (1) In Schedule 8 to the Oil Taxation Act 1975 (procedural provisions as to allowance of unrelievable field losses), in paragraph 4 (claims)—

• (a) in sub-paragraph (1) (which requires a participator to make a claim to the Board within a time limit), for the words from “and must be made” to “that is to say” there shall be substituted “ at any time after ” and the words from “and the date” to the end of the sub-paragraph shall be omitted; and

• (b) in sub-paragraph (2) the words “within the time allowed for making the original claim” shall be omitted.

• (2) This section applies to claims made on or after the day on which this Act is passed.

Transfer of interests in fields: restriction of transferred losses

148

• (1) In Schedule 17 to the Finance Act 1980 (transfer of interests in oil fields) paragraph 7 (transfer of unused losses from the old to the new participator) shall be amended as follows.

• (2) At the beginning of sub-paragraph (2) there shall be inserted “ Subject to the following provisions of this paragraph ”.

• (3) After sub-paragraph (2) there shall be inserted the following sub-paragraphs—

(3) If, in the case of a transfer of the whole or part of an interest on or after 29th November 1994,— (a) the old participator made a claim or election for the allowance of any expenditure unrelated to the field, and (b) the claim or election was received by the Board on or after that date, and (c) the expenditure allowed on the claim or election fell to be taken into account in computing the assessable profit or allowable loss of the old participator for the transfer period or any earlier chargeable period, then, from the sum which, apart from this sub-paragraph, would be the aggregate of all the losses transferred to the new participator under this paragraph there shall be deducted (subject to sub-paragraphs (5) and (6) below) so much of the expenditure referred to in paragraph (a) above as is allowed on the claim or election (and, accordingly, the amount so deducted shall not fall to be transferred to the new participator under this paragraph). (4) In this paragraph “expenditure unrelated to the field” means expenditure allowable under any of the following provisions— (a) section 5 (abortive exploration expenditure); (b) section 5A (exploration and appraisal expenditure); (c) section 5B (research expenditure); (d) section 6 (unrelievable loss from abandoned field); and (e) section 65 of the Finance Act 1987 (cross-field allowance of certain expenditure incurred on new fields); and, in relation to any such expenditure, “claim” means a claim under Schedule 7 or Schedule 8 and “election” means an election under Part I of Schedule 14 to the Finance Act 1987 and, in relation to such an election, expenditure shall be regarded as allowed if it is accepted by the Board as allowable in accordance with that Schedule. (5) Where, in accordance with sub-paragraph (1) above, only a part of a loss (corresponding to the part of the interest transferred) falls to be transferred under this paragraph, only a corresponding part of the expenditure referred to in sub-paragraph (3) above shall be deducted under that sub-paragraph. (6) Where the amount of the deduction under sub-paragraph (3) above equals or exceeds the sum from which it is to be deducted, no part of any loss shall be transferred to the new participator under this paragraph.

Part V — Stamp Duty

Transfer: associated bodies

149

• (1) Section 42 of the Finance Act 1930 (relief from transfer stamp duty in case of transfer of property as between associated bodies corporate) shall be amended as mentioned in subsections (2) to (5) below.

• (2) In subsection (2) (as substituted by section 27(2) of the Finance Act 1967) for the words from “that the effect” to the end of the subsection there shall be substituted

that— (a) the effect of the instrument is to convey or transfer a beneficial interest in property from one body corporate to another, and (b) the bodies in question are associated at the time the instrument is executed.

• (3) The following subsections shall be inserted after subsection (2) (as so substituted)—

(2A) For the purposes of this section bodies corporate are associated at a particular time if at that time one is the parent of the other or another body corporate is the parent of each. (2B) For the purposes of this section one body corporate is the parent of another at a particular time if at that time the first body is beneficial owner of not less than 75 per cent. of the ordinary share capital of the second body.

• (4) In subsection (3) (as so substituted) for “(2)” there shall be substituted “ (2B) ”, and the words from “with the substitution” to the end shall be omitted.

• (5) The following subsection shall be inserted after subsection (3) (as so substituted)—

(4) In this section “ordinary share capital”, in relation to a body corporate, means all the issued share capital (by whatever name called) of the body corporate, other than capital the holders of which have a right to a dividend at a fixed rate but have no other right to share in the profits of the body corporate.

• (6) In section 27 of the Finance Act 1967 (which relates to section 42 of the Finance Act 1930) in subsection (3)(c) for the words from “a change” to “third body corporate” there shall be substituted “ the transferor or a third body corporate ceasing to be the transferee’s parent (within the meaning of the said section 42) ”.

• (7) This section shall apply in relation to instruments executed on or after the day on which this Act is passed.

Northern Ireland transfer: associated bodies

150

• (1) Section 11 of the Finance Act (Northern Ireland) 1954 (relief from stamp duty in case of transfer of property between associated bodies corporate) shall be amended as follows.

• (2) In subsection (2)(c)(iii) for the words from “a change” to “third body corporate” there shall be substituted “ the transferor or a third body corporate ceasing to be the transferee’s parent ”.

• (3) The following subsections shall be substituted for subsection (3)—

(3) For the purposes of this section a body corporate is associated with another body corporate at a particular time if at that time one is the parent of the other or another body corporate is the parent of each. (3AA) For the purposes of this section one body corporate is the parent of another at a particular time if at that time the first body is beneficial owner of not less than 75 per cent. of the ordinary share capital of the second body.

• (4) In subsection (3A) for the words “paragraphs (i) and (ii) of subsection (3)” there shall be substituted “ subsection (3AA) ”, and the words from “with the substitution” to the end shall be omitted.

• (5) The following subsection shall be inserted after subsection (3A)—

(3AB) In this section “ordinary share capital”, in relation to a body corporate, means all the issued share capital (by whatever name called) of the body corporate, other than capital the holders of which have a right to a dividend at a fixed rate but have no other right to share in the profits of the body corporate.

• (6) This section shall apply in relation to instruments executed on or after the day on which this Act is passed.

Lease or tack: associated bodies

151

• (1) Stamp duty under Part II of Schedule 13 to the Finance Act 1999 (lease) shall not be chargeable on an instrument which is—

• (a) a lease,

• (b) an agreement for a lease, or

• (c) an agreement with respect to a letting,

as respects which the condition in subsection (2) below is satisfied. This subsection is subject to subsection (4A) below.

• (2) The condition is that it is shown to the satisfaction of the Commissioners of Inland Revenue that—

• (a) the lessor is a body corporate and the lessee is another body corporate,

• (b) those bodies are associated at the time the instrument is executed,

• (c) in the case of an agreement, the agreement is for the lease or letting to be granted to the lessee or to a body corporate which is associated with the lessee at the time the instrument is executed, and

• (d) the instrument is not executed in pursuance of or in connection with an arrangement falling within subsection (3) below.

• (3) An arrangement falls within this subsection if it is one under which—

• (a) the consideration, or any part of the consideration, for the lease or agreement was to be provided or received (directly or indirectly) by a person other than a body corporate which at the relevant time was associated with either the lessor or the lessee, or

• (b) the lessor and the lessee were to cease to be associated by reason of the lessor or a third body corporate ceasing to be the lessee’s parent;

and the relevant time is the time of the execution of the instrument.

• (4) Without prejudice to the generality of paragraph (a) of subsection (3) above, an arrangement shall be treated as within that paragraph if it is one under which the lessor or the lessee or a body corporate associated with either at the relevant time was to be enabled to provide any of the consideration, or was to part with any of it, by or in consequence of the carrying out of a transaction which involved (or transactions any of which involved) a payment or other disposition by a person other than a body corporate associated with the lessor or the lessee at the relevant time.

• (4A) An instrument shall not be exempt from stamp duty by virtue of subsection (1) above if at the time the instrument is executed arrangements are in existence by virtue of which at that or some later time any person has or could obtain, or any persons together have or could obtain, control of the lessee but not of the lessor.

• (5) An instrument mentioned in subsection (1) above shall not be treated as duly stamped unless—

• (a) it is duly stamped in accordance with the law that would apply but for that subsection, or

• (b) it has, in accordance with section 12 of the Stamp Act 1891, been stamped with a particular stamp denoting either that it is not chargeable with any duty or that it is duly stamped.

• (6) In this section—

• (a) references to the lessor are to the person granting the lease or (in the case of an agreement) agreeing to grant the lease or letting;

• (b) references to the lessee are to the person being granted the lease or (in the case of an agreement) agreeing for the lease or letting to be granted to him or another.

• (7) For the purposes of this section bodies corporate are associated at a particular time if at that time one is the parent of the other or another body corporate is the parent of each.

• (8) For the purposes of this section one body corporate is the parent of another at a particular time if at that time the first body.

• (a) is beneficial owner of not less than 75 per cent. of the ordinary share capital of the second body.

• (b) is beneficially entitled to not less than 75 per cent of any profits available for distribution to equity holders of the second body; and

• (c) would be beneficially entitled to not less than 75 per cent of any assets of the second body available for distribution to its equity holders on a winding-up.

• (9) In subsection (8) above “ordinary share capital”, in relation to a body corporate, means all the issued share capital (by whatever name called) of the body corporate, other than capital the holders of which have a right to a dividend at a fixed rate but have no other right to share in the profits of the body corporate.

• (10) The ownership referred to in paragraph (a) of subsection (8) above is ownership either directly or through another body corporate or other bodies corporate, or partly directly and partly through another body corporate or other bodies corporate; and Part I of Schedule 4 to the Finance Act 1938 (determination of amount of capital held through other bodies corporate) shall apply for the purposes of that paragraph.

• (10A) Chapter 6 of Part 5 of the Corporation Tax Act 2010 shall apply for the purposes of paragraphs (b) and (c) of subsection (8) as it applies for the purposes of section 151(4)(a) and (b) of that Act; but this is subject to subsection (10B).

• (10B) In determining for the purposes of this section whether a body corporate is the parent of the lessor, sections 171(1)(b) and (3), 173, 174 and 176 to 178 of the Corporation Tax Act 2010 shall not apply for the purposes of paragraph (b) or (c) of subsection (8) above.

• (10C) In this section, “control” shall be construed in accordance with section 1124 of the Corporation Tax Act 2010.

• (11) This section shall apply in relation to instruments executed on or after the day on which this Act is passed.

Part VI — Miscellaneous and General

Miscellaneous

Open-ended investment companies

152

• (1) The Treasury may, by regulations, make such provision as they consider appropriate for securing that the enactments specified in subsection (2) below have effect in relation to—

• (a) open-ended investment companies of any such description as may be specified in the regulations,

• (b) holdings in, and the assets of, such companies, and

• (c) transactions involving such companies,

in a manner corresponding, subject to such modifications as the Treasury consider appropriate, to the manner in which they have effect in relation to unit trusts, to rights under, and the assets subject to, such trusts and to transactions for purposes connected with such trusts.

• (2) The enactments referred to in subsection (1) above are—

• (a) the Tax Acts and the Taxation of Chargeable Gains Act 1992; and

• (b) the enactments relating to stamp duty and stamp duty reserve tax.

• (3) The power of the Treasury to make regulations under this section in relation to any such enactments shall include power to make provision which does any one or more of the following, that is to say—

• (a) identifies the payments which are or are not to be treated, for the purposes of any prescribed enactment, as the distributions of open-ended investment companies;

• (b) modifies the operation in relation to open-ended investment companies, or in relation to payments falling to be treated as the distributions of such companies, of any of the following provisions of Part 23 of the Corporation Tax Act 2010—

• (i) any provision of Chapter 2, except section 1000(2),

• (ii) sections 1030 to 1048,

• (iii) section 1049(1) and (3),

• (iv) sections 1059 to 1063, and

• (v) Chapter 5.

• (c) applies and adapts any of the provisions of the enactments relating to stamp duty or stamp duty reserve tax for the purpose of making in relation to transactions involving open-ended investment companies any provision corresponding (with or without modifications) to that which applies under those enactments in the case of equivalent transactions involving unit trusts;

• (d) provides for any or all of the provisions of sections 75 to 77 of the Finance Act 1986 to have effect or not to have effect in relation to open-ended investment companies or the undertakings of, or any shares in, such companies;

• (e) so modifies the operation of any prescribed enactment in relation to any such companies as to secure that arrangements for treating the assets of an open-ended investment company as assets comprised in separate pools are given an effect corresponding, in prescribed respects, to that of equivalent arrangements constituting the separate parts of an umbrella scheme;

• (f) requires prescribed enactments to have effect in relation to an open-ended investment company as if it were, or were not, a member of the same group of companies as one or more other companies;

• (g) identifies the holdings in open-ended investment companies which are, or are not, to be treated for the purposes of any prescribed enactment as comprised in the same class of holdings;

• (h) preserves a continuity of tax treatment where, in connection with any scheme of re-organisation, assets of one or more unit trusts become assets of one or more open-ended investment companies, or vice versa;

• (i) treats the separate parts of the undertaking of an open-ended investment company in relation to which provision is made by virtue of paragraph (e) above as distinct companies for the purposes of any regulations under this section;

• (j) amends, adapts or applies the provisions of any subordinate legislation made under or by reference to any enactment modified by the regulations.

• (4) The power to make regulations under this section shall be exercisable by statutory instrument and shall include power—

• (a) to make different provision for different cases; and

• (b) to make such incidental, supplemental, consequential and transitional provision as the Treasury may think fit.

• (5) A statutory instrument containing regulations under this section shall be subject to annulment in pursuance of a resolution of the House of Commons.

• (6) In this section—

• “the enactments relating to stamp duty” means the Stamp Act 1891, and any enactment (including any Northern Ireland legislation) which amends or is required to be construed together with that Act;

• “the enactments relating to stamp duty reserve tax” means Part IV of the Finance Act 1986 and any enactment which amends or is required to be construed as one with that Part;

• “Northern Ireland legislation” shall have the meaning given by section 24(5) of the Interpretation Act 1978;

• “open-ended investment company” shall have the meaning given by section 236 of the Financial Services and Markets Act 2000;

• “prescribed” means prescribed by regulations under this section;

• “subordinate legislation” means any subordinate legislation within the meaning of the Interpretation Act 1978 or any order or regulations made by statutory instrument under Northern Ireland legislation; and

• “umbrella scheme” shall have the meaning given by section 619 of the Corporation Tax Act 2010;

and references in this section to the enactments relating to stamp duty, or to any of them, or to Part IV of the Finance Act 1986 shall have effect as including references to enactments repealed by sections 107 to 110 of the Finance Act 1990.

• (7) Any reference in this section to unit trusts has effect—

• (a) for the purposes of so much of this section as confers power in relation to the enactments specified in paragraph (a) of subsection (2) above, as a reference to authorised unit trusts (within the meaning of sections 616 and 619(3) of the Corporation Tax Act 2010), and

• (b) for the purposes of so much of this section as confers power in relation to the enactments specified in paragraph (b) of that subsection, as a reference to any unit trust scheme (within the meaning given by section 57 of the Finance Act 1946).

• (8) For the purposes of this section the enactments which shall be taken to make provision in relation to companies that are members of the same group of companies shall include any enactments which make provision in relation to a case—

• (a) where one company has, or in relation to another company is, a subsidiary, or a subsidiary of a particular description, or

• (b) where one company controls another or two or more companies are under the same control.

Electronic lodgement of tax returns, etc

153

Short rotation coppice

154

• (1) ... The cultivation of short rotation coppice shall be regarded for the purposes of ... the Taxation of Chargeable Gains Act 1992 as farming (and, where relevant, as husbandry or agriculture) and not as forestry; and land in the United Kingdom on which the activity is carried on shall accordingly be regarded for those purposes as farm land or agricultural land, as the case may be, and not as woodlands.

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

• (2) For the purposes of the Inheritance Tax Act 1984 the cultivation of short rotation coppice shall be regarded as agriculture; and accordingly for those purposes—

• (a) land on which short rotation coppice is cultivated shall be regarded as agricultural land, and

• (b) buildings used in connection with the cultivation of short rotation coppice shall be regarded as farm buildings.

• (3) In subsections (1) and (2) “short rotation coppice” means a perennial crop of tree species planted at high density, the stems of which are harvested above ground level at intervals of less than ten years.

• (4) Subsection (1) and subsection (3) so far as relating to subsection (1) shall be deemed to have come into force on 29th November 1994.

• (5) Subsection (2) and subsection (3) so far as relating to subsection (2) shall have effect in relation to transfers of value or other events occuring on or after 6th April 1995.

Inheritance tax: agricultural property

155

• (1) In section 116 of the Inheritance Tax Act 1984 (relief for transfers of agricultural property) in subsection (2) (rate of relief) the word “either” shall be omitted and at the end of paragraph (b) there shall be inserted

or (c) the interest of the transferor in the property immediately before the transfer does not carry either of the rights mentioned in paragraph (a) above because the property is let on a tenancy beginning on or after 1st September 1995;

.

• (2) After subsection (2) of that section there shall be inserted the following subsection—

(2A) In the application of this section as respects property in Scotland, the reference in subsection (2)(c) above to a tenancy beginning on or after 1st September 1995 includes a reference to its being acquired on or after that date by right of succession (the date of acquisition being taken to be the date on which the successor gives relevant notice under section 12 of the Agricultural Holdings (Scotland) Act 1991).

• (3) Subsections (1) and (2) above shall apply in relation to transfers of value made, and other events occurring, on or after 1st September 1995.

Proceedings for tax in sheriff court

156

• (1) Section 67 of the Taxes Management Act 1970 (proceedings for tax in sheriff court) shall be amended as follows.

• (2) In subsection (1) (tax not exceeding a specified sum recoverable in sheriff court) for the words from “where” to “the tax” there shall be substituted “ tax due and payable under any assessment ”.

• (3) The following subsection shall be inserted after subsection (1)—

(1A) An officer of the Board who is authorised by the Board to do so may address the court in any proceedings under this section.

• (4) This section shall apply in relation to proceedings commenced after the day on which this Act is passed.

Certificates of tax deposit

157

• (1) If, whether before or after the passing of this Act—

• (a) any person (“the depositor”) has received any sum on the making, on or after 6th April 1990, of a withdrawal for cash of a tax deposit made before that date,

• (b) the whole or any part of any qualifying tax liability has been discharged by any payment made otherwise than by the application of a tax deposit, and

• (c) that payment was made in the period beginning one month before the withdrawal and ending one month afterwards,

the depositor shall be entitled to receive compensation under this section from the Board.

• (2) In this section “qualifying tax liability”, in relation to a tax deposit, means so much of any liability as is—

• (a) a liability of any person for any tax for the year 1990-91 or any subsequent year of assessment, or for interest on such tax;

• (b) a liability that relates to tax for a year of assessment during the whole or any part of which that person was married to the depositor; and

• (c) a liability of such a description that, if it had been a liability of the depositor (and the withdrawal were to be disregarded), the whole or any part of it could have been discharged, immediately before the time of the payment mentioned in subsection (1)(b) above, by the application of that deposit and of accrued interest thereon.

• (3) Subject to the following provisions of this section, the amount of the compensation to which the depositor is entitled under this section in the case of any deposit withdrawn for cash shall be equal to the difference between—

• (a) the sum received as mentioned in subsection (1)(a) above on the withdrawal; and

• (b) the sum that would have been received if interest had accrued on the relevant part of the sum received at the rate applicable under the relevant terms to sums applied in the payment of tax, instead of at the rate applicable to a withdrawal for cash.

• (4) In subsection (3) above, the reference to the relevant part of the sum received on the withdrawal of a deposit is a reference to the following amount, that is to say—

• (a) in a case where the sum received on the withdrawal is equal to or smaller than the amount of the liability discharged by the payment mentioned in subsection (1)(b) above, the amount equal to such part of the sum actually received as does not represent interest that has accrued under the relevant terms; and

• (b) in any other case, to the amount which would have been the amount specified in paragraph (a) above if the sum actually received on the withdrawal had been equal to the amount of qualifying tax liability so discharged.

• (5) The amount of compensation to which any person is entitled under this section shall also include an amount equal to interest, for the period from the withdrawal mentioned in subsection (1)(a) above until the payment of the compensation, on the amount determined in accordance with subsection (3) above; and a liability to compensation under this section shall not bear interest apart from in accordance with this subsection.

• (6) Section 178 of the Finance Act 1989 (interest rates) shall apply to subsection (5) above for determining the rate of the interest treated, by virtue of that subsection, as included in any compensation under this section; and any regulations under that section which are in force at the passing of this Act shall be deemed, subject to the powers of the Treasury under that section, to have effect in relation to this section as they have effect in relation to the enactments specified in subsection (2)(f) of that section (interest on overdue tax).

• (7) The part of any compensation under this section that represents interest under subsection (5) above shall not be treated as included in the income of the depositor for the purposes of income tax; but the remainder shall be chargeable to income tax under Chapter 2 of Part 4 of the Income Tax (Trading and Other Income) Act 2005 (interest).

• (8) No compensation shall be paid under this section unless a claim for it has been made to the Board.

• (9) Where any claim is made under this section with respect to any withdrawal for cash of a tax deposit—

• (a) this section shall have effect if there is, in the period mentioned in subsection (1)(c) above, more than one such payment as is mentioned in subsection (1)(b) above as if (subject to paragraph (b) below) all the payments in that period were, for the purposes of that claim, to be aggregated and treated as one such payment; and

• (b) the amount of compensation payable under this section on that claim shall be computed without regard to so much of any payment discharging a qualifying tax liability as, in pursuance of any claim under this section, has been or is to be so taken into account as to affect the amount of compensation payable in the case of any other withdrawal.

• (10) Sums required by the Board for paying compensation under this section shall be issued to the Board by the Treasury out of the National Loans Fund.

• (11) A withdrawal for cash of a tax deposit shall be taken for the purposes of this section to occur at the same time as, under the relevant terms, it is deemed to occur for the purposes of the calculation of interest on the amount withdrawn.

• (12) This section shall be construed as one with the Tax Acts, and in this section—

• (a) references to a tax deposit are references to the whole or any part of any deposit in respect of which a certificate of tax deposit has been issued by the Treasury under section 12 of the National Loans Act 1968; and

• (b) references to the relevant terms, in relation to a tax deposit, are references to the terms applicable to that deposit and to the certificate issued in respect of it.

Amendment of the Exchequer and Audit Departments Act 1866

158

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

Ports levy

159

• (1) In Part I of the Ports Act 1991 (transfer of statutory port undertakings), after section 15 (duty to provide information for purposes of levy) insert—

(15A) (1) Where a notice of assessment has been served under section 14(2) above on a former relevant port authority (“the authority”), the authority may, within the period mentioned in section 14(3) above, by notice in writing request the appropriate Minister to reconsider the amount of the assessment. The request shall set out the grounds on which the authority allege that the amount assessed is incorrect. (2) If it appears to the Minister that there are reasonable grounds for believing that the amount of the assessment may be excessive, he may direct that section 14(3) and (4) above shall not apply to the whole amount of the assessment but only to such lesser amount as he may specify. (3) If a request for reconsideration is duly made, the appropriate Minister shall reconsider the amount of the assessment and may confirm or reduce it. An appeal lies to the High Court or, in Scotland, to the Court of Session as the Court of Exchequer in Scotland from any decision of the Minister under this subsection. (4) The appropriate Minister may reconsider the amount of an assessment under section 14(2) above in any other case, if he thinks fit, and may confirm or reduce it. (5) When the amount of the assessment is finally determined— (a) if the amount of the assessment is less than the amount paid by the authority, the appropriate Minister shall make such payment to the authority as is required to put the authority in the same position as if the reduced amount had been specified in the original assessment; (b) if a further amount is payable by the authority, section 14(3) and (4) above shall apply in relation to that amount as if the reference to the date of issue of the notice of assessment were a reference to the date of the determination. (6) Except as provided by this section a notice of assessment under section 14(2) above shall not be questioned in any legal proceedings whatsoever.

.

• (2) Sections 115 to 120 of the Finance Act 1990 (levy on privatisation of certain ports) shall cease to have effect.

• (3) An Order in Council under paragraph 1(1)(b) of Schedule 1 to the Northern Ireland Act 1974 (legislation for Northern Ireland in the interim period) which states that it is made only for purposes corresponding to those of subsection (1) above—

• (a) shall not be subject to paragraph 1(4) and (5) of that Schedule (affirmative resolution of both Houses of Parliament), but

• (b) shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Tax simplification.

160

General

Interpretation

161

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

• (2) In Part III of this Act “the Management Act” means the Taxes Management Act 1970.

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

Repeals

162

The provisions specified in Schedule 29 to this Act (which include provisions which are already spent) are hereby repealed to the extent specified in the third column of that Schedule, but subject to any provision of that Schedule.

Short title

163

This Act may be cited as the Finance Act 1995.

SCHEDULE 1

Part I — Wine or made-wine of a strength not exceeding 22 per cent.

Part II — Wine or made-wine of a strength exceeding 22 per cent.

SCHEDULE 2

The Alcoholic Liquor Duties Act 1979

1

In section 4(1) of the Alcoholic Liquor Duties Act 1979 (interpretation)—

• (a) for the definition of “authorised methylator” there shall be substituted the following definition—

“authorised denaturer” means a person authorised under section 75(1) below to denature dutiable alcoholic liquor;

• (b) in the definition of “British compounded spirits”, for “methylated spirits” there shall be substituted “ denatured alcohol ”;

• (c) after the definition of “compounder” there shall be inserted the following definition—

“denatured alcohol” means denatured alcohol within the meaning of section 5 of the Finance Act 1995, and references to denaturing a liquor are references to subjecting it to any process by which it becomes denatured alcohol;

• (d) for the definition of “licensed methylator” there shall be substituted the following definition—

“licensed denaturer” means a person holding a licence under section 75(2) below;

.

2

Section 9 of that Act (remission of duty on spirits for methylation) shall cease to have effect.

3

In section 10 of that Act (remission of duty on spirits), for “methylated spirits” there shall be substituted “ denatured alcohol ”.

4

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

5

In sections 75, 77, 79 and 80 of that Act (which contain provisions regulating methylation)—

• (a) for the words “methylate”, “methylates”, “methylator” and “methylators”, wherever they occur, and for the word “methylated”, where it occurs outside the expression “methylated spirits”, there shall be substituted, respectively, “ denature ”, “ denatures ”, “ denaturer ”, “ denaturers ” and “ denatured ”;

• (b) for the words “methylation” and “methylating”, wherever they occur, there shall be substituted, in each case, “ denaturing ”;

• (c) for the word “spirits”, wherever it occurs outside the expression “methylated spirits”, there shall be substituted “ dutiable alcoholic liquor ”;

• (d) for the words “methylated spirits”, wherever they occur, there shall be substituted “ denatured alcohol ”.

6

In section 77(2) of that Act (provisions supplemental to powers to make regulations), after paragraph (a) there shall be inserted the following paragraph—

(aa) frame any provision of the regulations with respect to the supply, receipt or use of denatured alcohol by reference to matters to be contained from time to time in a notice published in accordance with the regulations by the Commissioners and having effect until withdrawn in accordance with the regulations; and

.

7

For section 78 of that Act (additional provisions relating to methylated spirits) there shall be substituted the following section—

(78) (1) This subsection applies if, at any time when an account is taken and a balance struck of the quantity of any kind of denatured alcohol in the possession of an authorised or licensed denaturer, there is a difference between— (a) the quantity (“the actual amount”) of the dutiable alcoholic liquor of any description in the denatured alcohol in his possession; and (b) the quantity (“the proper amount”) of dutiable alcoholic liquor of that description which, according to any such accounts as are required to be kept by virtue of any regulations under section 77 above, ought to be in the denatured alcohol in his possession. (2) Subsection (1) above shall not apply if the difference constitutes— (a) an excess of the actual amount over the proper amount of not more than 1 per cent. of the aggregate of— (i) the quantity of dutiable alcoholic liquor of the description in question in the balance of dutiable alcoholic liquor struck when an account was last taken; and (ii) the quantity of dutiable alcoholic liquor of that description which has since been lawfully added to the denaturer’s stock; or (b) a deficiency such that the actual amount is less than the proper amount by not more than 2 per cent. of that aggregate. (3) If, where subsection (1) above applies, the actual amount exceeds the proper amount, the relevant amount of any dutiable alcoholic liquor of the description in question which is in the possession of the denaturer shall be liable to forfeiture; and for this purpose the relevant amount is the amount corresponding to the amount of the excess or such part of that amount as the Commissioners consider appropriate. (4) If, where subsection (1) above applies, the actual amount is less than the proper amount, the denaturer shall, on demand by the Commissioners, pay on the amount of the deficiency, or on such part of it as the Commissioners may specify in the demand, the duty payable on dutiable alcoholic liquor of the description comprised in the deficiency. (5) If any person— (a) supplies to another, in contravention of any regulations under section 77 above, any denatured alcohol containing dutiable alcoholic liquor of any description, or (b) uses any such denatured alcohol in contravention of any such regulations, that person shall, on demand by the Commissioners, pay on the amount of dutiable alcoholic liquor of that description comprised, at the time of its supply or use, in the denatured alcohol that is so supplied or used, or on such part of it as the Commissioners may specify, the duty payable on dutiable alcoholic liquor of that description. (6) Any supply of denatured alcohol to a person who— (a) by virtue of any regulations under section 77 above is prohibited from receiving it unless authorised to do so by or under the regulations, and (b) is not so authorised in the case of the denatured alcohol supplied to him, shall be taken for the purposes of subsection (5) above to be a supply in contravention of those regulations. (7) A demand made for the purposes of subsection (4) or (5) above shall be combined, as if there had been a default such as is mentioned in that section, with an assessment and notification under section 12 of the Finance Act 1994 (assessments to excise duty) of the amount of duty due in consequence of the making of the demand.

The Finance Act 1994

8

In paragraph 3(1)(d) of Schedule 5 to the Finance Act 1994 (decisions under or for the purposes of section 9 or 10 of the Alcoholic Liquor Duties Act 1979 to be subject to review and appeal), for “section 9 or 10 (remission of duty on spirits for methylation or” there shall be substituted “ section 10 (remission of duty on spirits ”.

SCHEDULE 3

Introductory

1

The Betting and Gaming Duties Act 1981 shall be amended in accordance with paragraphs 2 to 11 below.

Amusement machine licences

2

• (1) In section 21 (gaming machine licences)—

• (a) in subsection (1), for the words “gaming machine” and “for gaming” there shall be substituted, respectively, “ amusement machine ” and “ for play ”;

• (b) in subsection (2), for “a gaming machine licence” there shall be substituted “ an amusement machine licence ”; and

• (c) in subsection (3), for “A gaming machine licence” there shall be substituted “ An amusement machine licence ”.

• (2) In subsection (3A) of that section (excepted machines), for paragraph (b) there shall be substituted the following paragraphs—

(b) a five-penny machine which is a prize machine without being a gaming machine or which (if it is a gaming machine) is a small-prize machine, or (c) a thirty-five-penny machine which is not a prize machine.

Amusement machine licence duty

3

• (1) In subsection (1) of section 22 (duty on gaming machine licences), for “gaming machine” there shall be substituted “ amusement machine ”.

• (2) In subsection (2) of that section (meaning of “small-prize machine”), for “a gaming machine is a small-prize machine if” there shall be substituted “ an amusement machine is a small-prize machine if it is a prize machine and ”.

Rate of duty

4

• (1) In subsection (1) of section 23 (determination of rate of duty by reference to Table), for “a gaming machine licence” there shall be substituted “ an amusement machine licence ”.

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

• (a) in paragraph (b), for “or column 3” there shall be substituted “ , column 3 or column 4 ”; and

• (b) in the words after that paragraph, for the words “gaming” and “or the rate in column 3” there shall be substituted, respectively, “ amusement ” and “ , the rate in column 3 or the rate in column 4 ”.

• (3) For the Table in that subsection (as substituted by section 13 of this Act) there shall be substituted the following Table—

(1) Period (in months) for which licence granted	(2) Machines that are not gaming machines	(3) Gaming machines that are small-prize machines or are five-penny machines without being small-prize machines	(4) Other machines
	£	£	£
1	30	60	150
2	50	105	275
3	75	155	400
4	95	205	520
5	120	250	645
6	140	295	755
7	160	340	880
8	185	390	1,005
9	205	435	1,115
10	225	480	1,235
11	240	510	1,305
12	250	535	1,375

Restrictions on provision of machines

5

In section 24 (restrictions on provision of gaming machines)—

• (a) for the words “Gaming machines”, “gaming machines” and “gaming machine”, wherever they occur, there shall be substituted, respectively, “ Amusement machines ”, “ amusement machines ” and “ amusement machine ”;

• (b) for the word “a”, where it occurs before “gaming machine” in subsection (5)(f), there shall be substituted “ an ”; and

• (c) for the words “for gaming”, wherever they occur, there shall be substituted “ for play ”.

Meaning of “amusement machine”

6

• (1) For subsections (1) to (3) of section 25 (meaning of “gaming machine”) there shall be substituted the following subsections—

(1) A machine is an amusement machine for the purposes of this Act if— (a) the machine is constructed or adapted for the playing of any game (whether a game of chance, a game of skill or a game of chance and skill combined); (b) the game is one played by means of the machine (whether automatically or by the operation of the machine by the player or players); (c) a player pays to play the game (except where he has an opportunity to play without payment as a result of having previously played successfully) either by inserting a coin or token into the machine or in some other way; (d) the machine automatically— (i) applies some or all of the rules of the game or displays or records scores in the game; and (ii) determines when a player who has paid to play a game by means of the machine can no longer play without paying again; and (e) the machine is a gaming machine, a video machine or a pinball machine. (1A) A machine constructed or adapted for the playing of a game is a gaming machine for the purposes of this Act if— (a) it is a prize machine; (b) the game which is played by means of the machine is a game of chance, a game of chance and skill combined or a pretended game of chance or of chance and skill combined; and (c) the outcome of the game is determined by the chances inherent in the action of the machine, whether or not provision is made for manipulation of the machine by a player; and for the purposes of this subsection a game in which the elements of chance can be overcome by skill shall be treated as a game of chance and skill combined if there is an element of chance in the game that cannot be overcome except by superlative skill. (1B) A machine constructed or adapted for the playing of a game is a video machine for the purposes of this Act if— (a) a micro-processor is used to control some or all of the machine’s functions; and (b) the playing of the game involves information or images being communicated or displayed to the player or players by means of any description of screen, other than one consisting only in a blank surface onto which light is projected. (1C) For the purposes of this Act an amusement machine is a prize machine unless it is constructed or adapted so that a person playing it once and successfully either receives nothing or receives only— (a) an opportunity, afforded by the automatic action of the machine, to play again (once or more often) without paying, or (b) a prize, determined by the automatic action of the machine and consisting in either— (i) money of an amount not exceeding the sum payable to play the machine once, or (ii) a token which is, or two or more tokens which in the aggregate are, exchangeable for money of an amount not exceeding that sum.

• (2) In subsection (4) of that section (machines playable by more than one person), for “a gaming machine” there shall be substituted “ a machine of any description ”.

• (3) For subsections (5) to (9) of that section there shall be substituted the following subsections—

(5) For the purposes of sections 21 to 24 above a machine (the actual machine) in relation to which the number determined in accordance with subsection (5A) below is more than one shall be treated (instead of as one machine) as if it were a number of machines (accountable machines) equal to the number so determined. (5A) That number is— (a) except where paragraph (b) below applies, the number of individual playing positions provided on the machine for persons to play simultaneously (whether or not while participating in the same game); and (b) where— (i) that machine is a video machine but not a gaming machine, and (ii) the number of such playing positions is more than the number of different screens used for the communication or display of information or images to any person or persons playing a game by means of the machine, the number of such screens. (6) Subsection (5) above does not apply in the case of any machine which is an excepted machine for the purposes of section 21 above or in the case of a pinball machine. (7) Any question whether the accountable machines are, or are not, machines falling within any of the following descriptions, that is to say— (a) gaming machines, (b) prize machines, (c) small-prize machines, or (d) five-penny machines, shall be determined according to whether or not the actual machine is a machine of that description, with the accountable machines being taken to be machines of the same description as the actual machine.

7

After section 25 there shall be inserted the following section—

(25A) (1) The Treasury may by order modify the provisions of section 25 above— (a) by adding to the machines for the time being specified in subsection (1)(e) of that section any description of machines which it appears to them, having regard to the use to which the machines are put, to be appropriate for the protection of the revenue so to add to those machines; or (b) by deleting any description of machines for the time being so specified. (2) An order under this section may make such incidental, consequential or transitional provision as the Treasury think fit, including provision modifying section 21 or section 25(5A) above for the purpose of— (a) specifying the circumstances (if any) in which a machine added to section 25(1)(e) above is to be an excepted machine for the purposes of section 21 above; or (b) determining the number which, in the case of a machine so added, is to be taken into account for the purposes of section 25(5) above.

Supplementary provisions

8

• (1) In section 26 (supplementary provisions)—

• (a) for the words “gaming machine licence duty” in subsection (1) there shall be substituted “ amusement machine licence duty ”;

• (b) for the words “a gaming machine” and “gaming machines”, wherever they occur, there shall be substituted, respectively, “ an amusement machine ” and “ amusement machines ”; and

• (c) for the words “for gaming”, wherever they occur, there shall be substituted “ for play ”.

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

• (a) after the definition of “United Kingdom” there shall be inserted the following definitions—

“video machine” has the meaning given by section 25(1B) above; “prize machine” has the meaning given by section 25(1C) above;

and

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

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

(2A) References in sections 21 to 25 above and in this section and Schedule 4 to this Act to a game, in relation to any machine, include references to a game in the nature of a quiz or puzzle and to a game which is played solely by way of a pastime or against the machine, as well as one played wholly or partly against one or more contemporaneous or previous players.

9

• (1) In sections 31 and 33(2) (protection of officers and savings for prohibitions of gaming etc.), for the words “gaming machine licences”, in each case, there shall be substituted “ amusement machine licences ”.

• (2) In section 32(3) (orders subject to affirmative procedure), for “or 14(3)” there shall be substituted “ , 14(3) or 25A ”.

• (3) In section 33(1) (interpretation), in the definition of “gaming”, the words “(except where it refers to a machine provided for gaming)” shall be omitted.

10

In Schedule 3 (bingo duty)—

• (a) in paragraph 5(1)(b), for “a gaming machine licence” there shall be substituted “ an amusement machine licence ”; and

• (b) in paragraph 6, for “a gaming machine” there shall be substituted “ an amusement machine ”.

11

• (1) In Schedule 4 (supplementary provisions in relation to gaming machine licence duty)—

• (a) for the words “gaming machine” and “gaming machines”, wherever they occur, there shall be substituted, respectively, “ amusement machine ” and “ amusement machines ”; and

• (b) for the indefinite article, wherever it occurs before an expression amended by paragraph (a) above, there shall be substituted “ An ” or “ an ”, as the case may require.

• (2) In paragraph 1(2) of that Schedule (conditions of exemption for charitable entertainments etc.)—

• (a) in paragraph (a), for “of gaming by means of any machine” there shall be substituted “ from any amusement machines ”; and

• (b) in paragraph (b), for “and any other provided for gaming” there shall be substituted “ and any other amusement machines provided ”.

• (3) In paragraph 2(2)(c) of that Schedule (conditions of exemption for pleasure fairs), for “and any other provided for gaming” there shall be substituted “ and any other amusement machines provided ”.

• (4) In paragraph 4 of that Schedule—

• (a) for the words “small-prize machines”, wherever they occur, there shall be substituted “ relevant machines ”; and

• (b) after sub-paragraph (7) there shall be inserted the following sub-paragraph—

(7A) An amusement machine is a relevant machine for the purposes of this paragraph unless it is a gaming machine which is not a small-prize machine.

;

and in relation to the winter period beginning with November 1995, sub-paragraph(4) of that paragraph shall have effect as if the references by virtue of this paragraph to an amusement machine licence included references to a gaming machine licence.

• (5) After paragraph 7 of that Schedule there shall be inserted the following paragraph—

(7A) (1) The Commissioners may make and publish arrangements setting out the circumstances in which, and the conditions subject to which, a person to whom an amusement machine licence is granted for a period of twelve months may, at his request and if the Commissioners think fit, be permitted to pay the duty on that licence by regular instalments during the period of the licence, instead of at the time when it is granted. (2) Arrangements under this paragraph shall provide for the amount of each instalment to be such that the aggregate amount of all the instalments to be paid in respect of any licence is an amount equal to 105 per cent. of what would have been the duty on that licence apart from this paragraph. (3) Sub-paragraph (4) below applies if a person who has been permitted, in accordance with arrangements under this paragraph, to pay the duty on any amusement machine licence by instalments— (a) fails to pay any instalment at the time when it becomes due in accordance with the arrangements; and (b) does not make good that failure within seven days of being required to do so by notice given by the Commissioners. (4) Where this sub-paragraph applies— (a) the licence shall be treated as having ceased to be in force as from the time when the instalment became due; (b) the person to whom the licence was granted shall become liable to any unpaid duty to which he would have been liable under paragraph 11(1C) below if he had surrendered the licence at that time; and (c) any amusement machines found on the premises to which the licence related shall be liable to forfeiture. (5) Sections 14 to 16 of the Finance Act 1994 (review and appeals) shall have effect in relation to any decision of the Commissioners refusing an application for permission to pay duty by instalments in accordance with arrangements under this paragraph as if that decision were a decision of a description specified in Schedule 5 to that Act.

• (6) In paragraph 11 of that Schedule (surrender), after sub-paragraph (1B) there shall be inserted the following sub-paragraph—

(1C) Where, in a case where duty is being paid in accordance with arrangements made under paragraph 7A above, the amount of duty actually paid on a licence that is surrendered is less than the amount which would have been paid on that licence if the period for which it was granted had been reduced by the number of complete months in that period which have not expired when the licence is surrendered, the difference between those amounts shall be treated as unpaid duty.

• (7) Paragraph 13 of that Schedule (labelling and marking of machines) shall cease to have effect.

• (8) In paragraph 14 of that Schedule (power to enter premises), for the words “for gaming” there shall be substituted “ for play ”.

• (9) In paragraph 16 of that Schedule (enforcement), after sub-paragraph (1) there shall be inserted the following sub-paragraph—

(1A) This paragraph does not apply to any contravention or failure to comply with arrangements under paragraph 7A above or to any failure or refusal to comply with a requirement made under or for the purposes of any such arrangements.

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

Consequential amendment of the Customs and Excise Management Act 1979

12

In section 102(3)(a) of the Customs and Excise Management Act 1979 (penalty for failure to deliver up a licence), for “a gaming machine licence” there shall be substituted “ an amusement machine licence ”.