Legalize / United Kingdom / Public General Act

Finance Act 2000

Type Public General Act

Publication 2000-07-28

Last updated 2026-04-07

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

Part I — Excise duties

Alcoholic liquor duties

Rebates, marking and reliefs.

1

(1) In section 36(1) of the Alcoholic Liquor Duties Act 1979 (rate of duty on beer), for “£11.50" substitute “ £11.89 ”.

(2) This section shall be deemed to have come into force on 1st April 2000.

Rates of duty on cider

2

(1) In section 62(1A) of the Alcoholic Liquor Duties Act 1979 (rates of duty on cider)—

(a) in paragraph (a) (rate of duty per hectolitre in the case of sparkling cider of a strength exceeding 5.5 per cent.), for “£161.20" substitute “ £166.70 ”;

(b) in paragraph (b) (rate of duty per hectolitre in the case of cider of a strength exceeding 7.5 per cent. which is not sparkling cider), for “£37.92" substitute “ £39.21 ”; and

(2) This section shall be deemed to have come into force on 1st April 2000.

Limit on amount of group relief in case of consortium claim.

3

(1) For Part I of the Table of rates of duty in Schedule 1 to the Alcoholic Liquor Duties Act 1979 (wine and made-wine) substitute—

Description of wine or made-wine	Rates of duty per hectolitre
	£
Wine or made-wine of a strength not exceeding 4 per cent.	47.58
Wine or made-wine of a strength exceeding 4 per cent. but not exceeding 5.5 per cent.	65.42
Wine or made-wine of a strength exceeding 5.5 per cent. but not exceeding 15 per cent. and not being sparkling	154.37
Sparkling wine or sparkling made-wine of a strength exceeding 5.5 per cent. but less than 8.5 per cent.	166.70
Sparkling wine or sparkling made-wine of a strength of 8.5 per cent. or of a strength exceeding 8.5 per cent. but not exceeding 15 per cent.	220.54
Wine or made-wine of a strength exceeding 15 per cent. but not exceeding 22 per cent.	205.82

(2) This section shall be deemed to have come into force on 1st April 2000.

Hydrocarbon oil duties

Payments under deduction of tax.

4

(1) In section 6(1A) of the Hydrocarbon Oil Duties Act 1979 (rates of duty on hydrocarbon oil)—

(a) in paragraph (a) (light oil), for “£0.5288" substitute “ £0.5468 ”;

(b) in paragraph (b) (ultra low sulphur diesel), for “£0.4721" substitute “ £0.4882 ”; and

(2) In section 11(1) of that Act (rebate on heavy oil)—

(a) in paragraph (a) (fuel oil), for “£0.0265" substitute “ £0.0274 ”; and

(b) in each of paragraphs (b) and (ba) (gas oil which is not ultra low sulphur diesel and ultra low sulphur diesel), for “£0.0303" substitute “ £0.0313 ”.

(3) In section 13A(1A) of that Act (rebate on unleaded petrol)—

(a) in paragraph (a) (higher octane unleaded petrol), for “£0.0367" substitute “ £0.0379 ”; and

(b) in paragraph (b) (other unleaded petrol), for “£0.0567" substitute “ £0.0586 ”.

(4) In section 14(1) of that Act (rebate on light oil for use as furnace fuel), for “£0.0265" substitute “ £0.0274 ”.

(5) This section shall be deemed to have come into force at 6 o’clock in the evening of 21st March 2000.

Deduction for contribution to plan trust

5

(1) In section 1 of the Hydrocarbon Oil Duties Act 1979 (definitions of oil), after subsection (3) insert—

(3A) “Ultra low sulphur petrol” means unleaded petrol (other than higher octane unleaded petrol)— (a) the sulphur content of which does not exceed 0.005 per cent. by weight or is nil, and (b) the aromatics content of which does not exceed 35 per cent. by volume. (3B) “Unleaded petrol” means petrol that contains not more than 0.013 grams of lead per litre of petrol; and petrol is “leaded petrol” if it is not unleaded. (3C) “Higher octane unleaded petrol” means unleaded petrol— (a) whose research octane number is not less than 96 and whose motor octane number is not less than 86; or (b) which is delivered for home use as petrol that satisfies the condition in paragraph (a) above; or (c) which is delivered for home use as petrol that is suitable to be used as fuel for engines for which leaded petrol is suitable by virtue of being leaded; or (d) which is delivered for home use under such a description, or in such a manner, as tends, in the circumstances, to suggest that it is— (i) petrol satisfying the condition in paragraph (a) above, or (ii) petrol that is suitable to be used as fuel for engines for which leaded petrol is suitable by virtue of being leaded.

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

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

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

(5) In section 27(1) of that Act (interpretation), at the appropriate places insert—

“ultra low sulphur petrol” has the meaning given by section 1(3A) above;

;

“unleaded petrol” and “leaded petrol” have the meaning given by section 1(3B) above.

;

and

“higher octane unleaded petrol” has the meaning given by section 1(3C) above;

(6) This section shall come into force on such day as the Commissioners of Customs and Excise may appoint by order made by statutory instrument.

Mixing of rebated light oils

6

(1) Schedule 2A to the Hydrocarbon Oil Duties Act 1979 (mixing of rebated oils) is amended in accordance with Schedule 1 to this Act.

(2) The amendments in that Schedule come into force on the day appointed under section 5(6).

Power to amend definitions of types of hydrocarbon oil

7

In the Hydrocarbon Oil Duties Act 1979, after section 2 insert—

(2A) (1) The Treasury may by order made by statutory instrument amend the definitions for the purposes of this Act of— “ultra low sulphur petrol"; “unleaded petrol" and “leaded petrol"; “higher octane unleaded petrol"; and “ultra low sulphur diesel". (2) An order under this section may contain such incidental, supplementary and transitional provision as appears to the Treasury to be appropriate. (3) No order shall be made under this section unless a draft of it has been laid before and approved by a resolution of the House of Commons.

Penalties for misuse of rebated heavy oil

8

(1) Section 13 of the Hydrocarbon Oil Duties Act 1979 (penalties for misuse of rebated heavy oil) is amended as follows.

(2) In subsection (1)—

(a) for “or, as the case may be, his becoming so liable" substitute “ or his becoming so liable (or, where his conduct includes both, each of them) ”, and

(b) omit the words from “; and the Commissioners" to the end.

(3) After subsection (1) insert—

(1A) Where oil is used, or is taken into a road vehicle, in contravention of section 12(2) above, the Commissioners may— (a) assess an amount equal to the rebate on like oil at the rate in force at the time of the contravention as being excise duty due from any person who used the oil or was liable for the oil being taken into the road vehicle, and (b) notify him or his representative accordingly.

(4) This section shall have effect in relation to liability arising on or after 1st May 2000.

Use of rebated heavy oil as fuel

9

(1) Schedule 1 to the Hydrocarbon Oil Duties Act 1979 (which sets out the categories of excepted vehicle which may use rebated heavy oil as fuel) is amended as follows.

(2) Omit the following provisions—

(a) paragraph 2(1)(b) (which provides that off-road tractors are excepted vehicles) and the word “or" immediately preceding it, and

(b) paragraph 2(4) (which defines off-road tractors).

(3) This section shall have effect in relation to the use of rebated heavy oil as fuel on or after 1st May 2000.

Rebates, marking and reliefs

10

(1) The Hydrocarbon Oil Duties Act 1979 is amended in accordance with subsections (2) to (4).

(2) In section 11 (rebate on heavy oil), after subsection (2) insert—

(3) This subsection applies in any case where— (a) oil is delivered for home use, (b) regulations under section 24 below require, as a condition of allowing a rebate on the oil under subsection (1) above, that a marker prescribed by regulations under that section shall have been added to the oil, and (c) the marker is present at the time of delivery for home use but in such a proportion that its presence falls to be disregarded by virtue of provision made by regulations under that section. (4) In any case where subsection (3) above applies, a rebate may be allowed on the oil at the time it is delivered for home use if it appears to the Commissioners to be appropriate to allow it. (5) Where a rebate is allowed under subsection (4) above, the rate at which the rebate is allowed— (a) shall be such rate as appears to the Commissioners to be appropriate, but (b) shall not be less than 95 per cent. of, and shall not exceed, the rate of rebate specified in the relevant paragraph of subsection (1) above.

(3) In section 20AA(2) (provision in connection with allowing reliefs)—

(a) in paragraph (a) (relief may take form of repayment or remission), after “repayment or remission" insert “ or an allowance to be set off against duty payable to the Commissioners by the person claiming relief ”; and

(b) after paragraph (g) insert—

(ga) provide for oil on which relief is allowed to be treated for the purposes of this Act as oil on which a rebate has been allowed;

(4) In section 24 (regulations controlling use of duty-free and rebated oil), after subsection (4B) insert—

(4C) In a case where subsection (4D) below applies, the power of the Commissioners under subsection (4A) above includes power, if it appears to them to be appropriate, to assess (and notify) an amount less than the amount of the rebate concerned. (4D) This subsection applies in any case where— (a) the Commissioners have power to assess (and notify) an amount under subsection (4A) above by virtue of a contravention of, or failure to comply with, a requirement such as is mentioned in paragraph 5 of Schedule 4 to this Act, and (b) the marker whose addition is required by the requirement is present at the time of the contravention or failure but in such a proportion that its presence falls to be disregarded by virtue of provision made by regulations under this section for the purpose mentioned in paragraph 7 of that Schedule.

(5) In paragraph 4 of Schedule 5 to the Finance Act 1994 (decisions under the Hydrocarbon Oil Duties Act 1979 of which a review may be required), after sub-paragraph (1) insert—

(1A) Any decision which is made under or for the purposes of any regulations made under section 20AA of the Hydrocarbon Oil Duties Act 1979 and is a decision as to whether or not relief is to be allowed.

Emulsions of water in gas oil

11

(1) In section 6A of the Hydrocarbon Oil Duties Act 1979 (duty on fuel substitutes), after subsection (2) (definition of chargeable use) insert—

(2A) But the use of water is not a chargeable use if— (a) the water is comprised in an emulsion of water in gas oil, and (b) the emulsion is stabilised by additives.

(2) This section shall have effect in relation to duty charged on or after the day on which this Act is passed.

Tobacco products duty

Rates of tobacco products duty

12

(1) For the Table of rates of duty in Schedule 1 to the Tobacco Products Duty Act 1979 substitute—

1. Cigarettes	An amount equal to 22 per cent. of the retail price plus £90.43 per thousand cigarettes.
2. Cigars	£132.33 per kilogram.
3. Hand-rolling tobacco	£95.12 per kilogram.
4. Other smoking tobacco and chewing tobacco	£58.17 per kilogram.

(2) This section shall be deemed to have come into force at 6 o’clock in the evening of 21st March 2000.

Basis of calculation of ad valorem element of duty on cigarettes

13

(1) Section 5 of the Tobacco Products Duty Act 1979 (retail price of cigarettes) is amended as follows.

(2) In subsection (1) (meaning of retail price) for the words from “shall be taken to be" to the end substitute

shall be taken to be— (a) the higher of— (i) the recommended price for the sale by retail at that time in the United Kingdom of cigarettes of that description, and (ii) any (or, if more than one, the highest) retail price shown at that time on the packaging of the cigarettes in question, or (b) if there is no such price recommended or shown, the highest price at which cigarettes of that description are normally sold by retail at that time in the United Kingdom.

(3) In subsection (3) (determination of price by Commissioners), for “paragraph (a) of subsection (1)" substitute “ paragraph (b) of subsection (1) ”.

(4) In subsection (4) (reference to arbitration of Commissioners’ determination), for “subsection (1)(a)" substitute “ subsection (1)(b) ”.

Fiscal marks on tobacco products

14

After section 8 of the Tobacco Products Duty Act 1979 insert the following sections—

(8A) Fiscal marking applies to tobacco products that are— (a) cigarettes, or (b) hand-rolling tobacco. (8B) (1) The Commissioners may by order made by statutory instrument amend section 8A above for the purpose of causing fiscal marking— (a) to apply to any description of tobacco products to which it does not apply, or (b) to cease to apply to any description of tobacco products to which it does apply. (2) Where fiscal marking applies to any description of tobacco products, the Commissioners may by regulations provide that fiscal marking does not apply to such products of that description as are of a description specified in the regulations. (3) A statutory instrument containing (whether alone or with other provisions) an order under subsection (1)(a) above shall not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament. (4) A statutory instrument that— (a) contains (whether alone or with other provisions) an order under subsection (1) above, and (b) is not subject to any requirement that a draft of the instrument be laid before and approved by a resolution of each House of Parliament, shall be subject to annulment in pursuance of a resolution of either House of Parliament. (8C) (1) The Commissioners may make provision by regulations— (a) requiring the carrying of fiscal marks by tobacco products to which fiscal marking applies, and (b) as to such matters relating to fiscal marks as appear to the Commissioners to be necessary or expedient. (2) In this Act “fiscal mark” means a mark carried by tobacco products indicating all or any of the following— (a) that excise duty has been paid on the products; (b) the rate at which excise duty was paid on the products; (c) the amount of excise duty paid on the products; (d) when excise duty was paid on the products; (e) that sale of the products— (i) is only permissible on dates ascertainable from the mark; (ii) is not permissible after (or on or after) a date so ascertainable; (iii) is not permissible before (or before or on) a date so ascertainable. (3) Regulations under this section may, in particular, make provision about— (a) the contents of a fiscal mark; (b) the appearance of a fiscal mark; (c) in the case of tobacco products that have more than one layer of packaging, which of the layers is (or are) to carry a fiscal mark; (d) the positioning of a fiscal mark on the packaging of any tobacco products; (e) when tobacco products are required to carry a fiscal mark. (4) Regulations under this section may make different provision for different cases. (8D) (1) The Commissioners may by notices published by them regulate any of the matters mentioned in paragraphs (a) to (d) of section 8C(3) above. (2) A notice under this section may provide for provision made by regulations under section 8C above to have effect subject to provisions of the notice. (3) A notice under this section may make different provision for different cases. (8E) (1) This section applies if a person fails to comply with any requirement imposed by or under— (a) regulations made under section 8C above, or (b) a notice published under section 8D above. (2) Any article in respect of which the person fails to comply with the requirement shall be liable to forfeiture. (3) The person’s failure to comply shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties). (4) The Commissioners may by regulations make such provision as is mentioned in subsection (5) below about the calculation of the penalty in a case where the failure involves post-dating of any tobacco products. For this purpose “post-dating” means that the products carry a fiscal mark (“the later period mark”) that— (a) is not one they are required to carry by virtue of this Act, and (b) is one they would be required to carry by virtue of this Act if the requirement to pay the duty charged on them under section 2 above took effect at a time later than that at which it in fact takes effect. (5) The provision that may be made by regulations under subsection (4) above is for the penalty to be calculated by reference to the duty currently charged on the products. For this purpose “the duty currently charged" on the products is the amount of the duty charged under section 2 above that would be payable on the products if the requirement to pay the duty took effect at the time of the failure. (8F) (1) This section applies if provision made by or under— (a) regulations made under section 8C above, or (b) a notice published under section 8D above, provides for any tobacco products to carry a period of sale mark. (2) In this section— - “a period of sale mark” means a fiscal mark indicating any of the matters mentioned in subsection (2)(e) of section 8C above; and - “prohibited time”, in relation to tobacco products that carry a period of sale mark, means a time when, according to the mark, sale of the products is not permissible. (3) If— (a) a person sells by way of retail sale, or exposes for retail sale, any tobacco products that carry a period of sale mark, and (b) he so sells or exposes the products at a prohibited time, his so selling or exposing the products shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties) and the products are liable to forfeiture. (8G) (1) In this section “unmarked products" means tobacco products that are subject to fiscal marking but do not carry a compliant duty-paid fiscal mark. (2) For the purposes of this section “duty-paid fiscal mark” means a fiscal mark carried by tobacco products indicating that excise duty has been paid on the products. (3) For the purposes of this section a duty-paid fiscal mark carried by tobacco products of any description is “compliant” if it complies with all relevant requirements for any duty-paid fiscal mark that by virtue of this Act is required to be carried by such tobacco products of that description as are by virtue of this Act required to carry such a mark. For this purpose “relevant requirement” means a requirement, imposed by virtue of this Act, as to any of the matters mentioned in paragraphs (a) to (d) of section 8C(3) above (contents, appearance and positioning etc. of fiscal marks). (4) If a person— (a) is in possession of, transports or displays, or (b) sells, offers for sale or otherwise deals in, unmarked products then, except in such cases as may be prescribed in regulations made by the Commissioners, that person commits an offence and the products are liable to forfeiture. (5) It is a defence for a person charged with an offence under subsection (4) above to prove that the unmarked products were not required by virtue of this Act to carry a duty paid fiscal mark. (6) A person guilty of an offence under subsection (4) above shall be liable on summary conviction to a fine not exceeding level 5 on the standard scale. (8H) (1) A manager of premises commits an offence if he suffers the premises to be used for the sale of unmarked products. In this section “unmarked products” has the same meaning as in section 8G above. (2) It is a defence for a person charged with an offence under subsection (1) above to prove that the unmarked products were not required by virtue of this Act to carry a duty-paid fiscal mark. For this purpose “duty-paid fiscal mark” has the same meaning as in section 8G above. (3) A person guilty of an offence under subsection (1) above shall be liable on summary conviction to a fine not exceeding level 5 on the standard scale. (4) A court by or before which a person is convicted of an offence under subsection (1) above may make an order prohibiting the use of the premises in question for the sale of tobacco products during a period specified in the order. (5) The period specified in an order under subsection (4) above shall not exceed six months; and the first day of the period shall be the day specified as such in the order. (6) A manager of premises commits an offence if he suffers the premises to be used in breach of an order under subsection (4) above. (7) A person guilty of an offence under subsection (6) above shall be liable on summary conviction to a fine not exceeding level 5 on the standard scale. (8) For the purposes of this section a person is a manager of premises if he— (a) is entitled to control their use, (b) is entrusted with their management, or (c) is in charge of them. (8J) (1) This section applies where a person— (a) alters or overprints any fiscal mark carried by any tobacco products in compliance with any provision made under this Act, or (b) causes any such mark to be altered or overprinted. (2) His altering or overprinting of the mark, or his causing it to be altered or overprinted, shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties). (3) The products that carried the mark shall be liable to forfeiture. (4) The penalty under subsection (2) above shall be calculated by reference to the duty currently charged on the products. For this purpose “the duty currently charged" on the products is the amount of the duty charged under section 2 above that would be payable on the products if the requirement to pay the duty took effect at the time of the conduct attracting the penalty.

Management of excise duty on tobacco products

15

(1) The Tobacco Products Duty Act 1979 has effect subject to the following amendments.

(2) In section 2(2) (remission or repayment of duty where tobacco products exported, shipped as stores or used for research or experiment), for the words from “that" to the end of paragraph (b) substitute—

that— (a) the products in question have been— (i) exported or shipped as stores, or (ii) used solely for the purposes of research or experiment; and (b) any fiscal marks carried by the products have been obliterated;

(3) Section 7 (regulations for management of duty) is amended as follows.

(4) After paragraph (a) of subsection (1) (method of charging duty and securing and collecting duty) insert—

(aa) for charging the duty, in such circumstances as may be specified in the regulations, by reference to the weight of the tobacco products at a time specified in the regulations or by the Commissioners (whether the time at which the products become chargeable or that at which the duty becomes payable or any other time);

(5) In paragraph (b) of subsection (1) (registration of premises for storage of tobacco), after “regulating their" insert “ storage and ”.

(6) After that paragraph insert—

(ba) for the registration of premises for the manufacture of tobacco products, for restricting or prohibiting the manufacture of tobacco products otherwise than in premises so registered and for regulating their storage and treatment in, and removal from, such premises;

(7) In paragraph (c) of subsection (1), omit sub-paragraph (i) (which is superseded by the amendment made by subsection (6) above).

(8) In paragraph (d) of subsection (1), for “and the making of such returns, as may be specified in the regulations" substitute “ the notification of such information, and the making of such returns, as may be specified in the regulations or required by the Commissioners ”.

(9) After subsection (1) insert—

(1A) Regulations under subsection (1) above may, in particular, include provision— (a) imposing, or providing for the imposition under the regulations of, conditions and restrictions relating to any of the matters mentioned in that subsection; (b) enabling the Commissioners to dispense with compliance with any provision contained in the regulations in such circumstances and subject to such conditions (if any) as they may determine.

Gaming duty

Rates of gaming duty

16

(1) For the table in section 11(2) of the Finance Act 1997 (rates of gaming duty) substitute—

Part of gross gaming yield	Rate
The first £470,500	2½ per cent.
The next £1,045,500	12½ per cent.
The next £1,045,500	20 per cent.
The next £1,830,000	30 per cent.
The remainder	40 per cent.

(2) This section has effect in relation to accounting periods beginning on or after 1st April 2000.

Amusement machine licence duty

17

Schedule 2 to this Act (which amends the Betting and Gaming Duties Act 1981) shall have effect.

Air passenger duty

Rates of duty

18

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

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

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

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

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

(6) At the end of the section add—

(10) In this section “standard class travel”, in relation to carriage on an aircraft, means— (a) in the case of an aircraft on which only one class of travel is available, that class of travel; (b) in any other case, the lowest class of travel available on the aircraft.

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

(8) This section applies to any carriage of a passenger on an aircraft which begins on or after 1st April 2001.

Changes in exemption from duty

19

(1) Section 31 of the Finance Act 1994 is amended as follows.

(2) Omit subsections (1) and (2) (exemption in relation to passengers making return journeys within the United Kingdom).

(3) After subsection (4A) insert—

(4B) A passenger is not a chargeable passenger in relation to a flight if under his agreement for carriage (whether or not it is evidenced by a ticket) the flight is to depart from an airport which is in a region of the United Kingdom designated by order. (4C) An order may be made for the purposes of subsection (4B) above in respect of any region which has a population density of not more than 12.5 persons per square kilometre. (4D) In subsections (4B) and (4C) above, references to a region are references to an area which is determined by the Treasury to constitute a region for the purposes of those subsections.

(4) Omit subsection (6) (provision by regulations for subsection (1) to have effect in relation to journeys begun in the Isle of Man).

(5) In consequence of the provision made by subsection (2) above, in section 43 of the Finance Act 1994 (interpretation)—

(a) in subsection (2) (meaning of “journey” etc), omit “Subject to subsection (3) below”, and

(b) omit subsection (3) (interpretation of references to a return ticket).

(6) This section applies to any carriage of a passenger on an aircraft which begins on or after 1st April 2001.

Vehicle excise duty

Threshold for reduced general rate

20

(1) In paragraph 1 of Schedule 1 to the Vehicle Excise and Registration Act 1994 (rate of duty applicable where no other rate specified), in sub-paragraphs (2) and (2A) for “1,100 cubic centimetres" (the reduced rate threshold) substitute “ 1,200 cubic centimetres ”.

This amendment applies to licences issued on or after 1st March 2001.

(2) Refunds shall be made by the Secretary of State, in accordance with the following provisions of this section, in respect of licences—

(a) issued in the period beginning with 1st March 2000 and ending with 28th February 2001, and

(b) not surrendered before the end of that period,

where the amount of vehicle excise duty chargeable on the licence would have been less if the amendment in subsection (1) had applied.

(3) The amount of the refund is—

(a) £55 for a 12 month licence, and

(b) £27.50 for a 6 month licence.

(4) The person entitled to the refund is—

(a) in the case of a licence in force on 28th February 2001, the keeper of the vehicle on that date;

(b) in the case of a licence that has ceased to be in force before that date, the keeper of the vehicle when the licence expired.

(5) For the purposes of subsection (4) the keeper of the vehicle shall be taken to be—

(a) the person registered as keeper of the vehicle on the date in question, or

(b) if the Secretary of State has received notification of a change of ownership of the vehicle as a result of which another person is on that date entitled to be registered as the new keeper of the vehicle, that person.

(6) A refund shall only be made if an application is made for it in such form, and containing such particulars and supported by such documents, as the Secretary of State may require.

(7) The Secretary of State shall give notice in writing to any person appearing to him to be entitled to a refund—

(a) informing him that he appears to be entitled to a refund,

(b) enclosing an application form, and

(8) An application for, or the making of, a refund under this section in respect of a licence does not affect the validity of the licence.

(9) For the purposes of section 19 of the Vehicle Excise and Registration Act 1994 (surrender of licences) as it applies to the surrender on or after 1st March 2001 of a licence in respect of which a refund under this section has been made, or applied for, the annual rate of duty chargeable on the licence shall be taken to be that which would have been chargeable if the amendment in subsection (1) above had applied.

(10) Section 45 of that Act (offence of false or misleading declaration) applies to a declaration in connection with an application for a refund under this section as it applies to a declaration in connection with an application for a vehicle licence.

(11) In the application of this section to Northern Ireland, references to registration as the keeper of a vehicle shall be read as references to registration as the owner of the vehicle.

Increase in general rate

21

(1) In paragraph 1 of Schedule 1 to the Vehicle Excise and Registration Act 1994 (rate of duty applicable where no other rate specified)—

(a) in sub-paragraph (2) (the standard rate), for “£155" substitute “ £160 ”; and

(b) in sub-paragraph (2A) (the reduced rate), for “£100" substitute “ £105 ”.

(2) This section applies to licences issued on or after 1st March 2001.

Rates of duty for new cars and vans

22

Schedule 3 to this Act has effect with respect to vehicle excise duty on light passenger vehicles and light goods vehicles first registered on or after 1st March 2001.

Enforcement provisions for graduated rates

23

Schedule 4 to this Act has effect with respect to vehicle licences for vehicles in respect of which vehicle excise duty is chargeable at different rates.

Rates of duty for goods vehicles

24

(1) Schedule 5 to this Act (which makes provision for new rates of vehicle excise duty for goods vehicles etc.) has effect.

(2) The provisions of that Schedule apply in relation to licences issued after 21st March 2000.

Enforcement of duties

Power to search premises

25

In Part XII of the Customs and Excise Management Act 1979 (general supplementary provisions), for section 161 (power to search premises) substitute—

(161) (1) The powers conferred by this section are exercisable by an officer having a writ of assistance if there are reasonable grounds to suspect that anything liable to forfeiture under the customs and excise Acts— (a) is kept or concealed in any building or place, and (b) is likely to be removed, destroyed or lost before a search warrant can be obtained and executed. (2) The powers are— (a) to enter the building or place at any time, whether by day or night, on any day, and search for, seize, and detain or remove any such thing, and (b) so far as is necessary for the purpose of such entry, search, seizure, detention or removal, to break open any door, window or container and force and remove any other impediment or obstruction. (3) An officer shall not exercise the power of entry conferred by this section by night unless accompanied by a constable. (4) A writ of assistance shall continue in force during the reign in which it is issued and for six months thereafter. (161A) (1) If a justice of the peace is satisfied by information upon oath given by an officer that there are reasonable grounds to suspect that anything liable to forfeiture under the customs and excise Acts is kept or concealed in any building or place, he may by warrant under his hand authorise any officer, and any person accompanying an officer, to enter and search the building or place named in the warrant. (2) An officer or other person so authorised has power— (a) to enter the building or place at any time, whether by day or night, on any day, and search for, seize, and detain or remove any such thing, and (b) so far as is necessary for the purpose of such entry, search, seizure, detention or removal, to break open any door, window or container and force and remove any other impediment or obstruction. (3) Where there are reasonable grounds to suspect that any still, vessel, utensil, spirits or materials for the manufacture of spirits is or are unlawfully kept or deposited in any building or place, subsections (1) and (2) above apply in relation to any constable as they would apply in relation to an officer. (4) The powers conferred by a warrant under this section are exercisable until the end of the period of one month beginning with the day on which the warrant is issued. (5) A person other than a constable shall not exercise the power of entry conferred by this section by night unless accompanied by a constable.

Power to search articles

26

In Part XII of the Customs and Excise Management Act 1979 (general supplementary provisions), after section 163 (power to search vehicles or vessels) insert—

(163A) (1) Without prejudice to any other power conferred by the Customs and Excise Acts 1979, where there are reasonable grounds to suspect that a person in the United Kingdom (referred to in this section as “the suspect”) has with him, or at the place where he is, any goods to which this section applies, an officer may— (a) require the suspect to permit a search of any article that he has with him or at that place, and (b) if the suspect is not under arrest, detain him (and any such article) for so long as may be necessary to carry out the search. (2) The goods to which this section applies are dutiable alcoholic liquor, or tobacco products, which are— (a) chargeable with any duty of excise, and (b) liable to forfeiture under the customs and excise Acts. (3) Notwithstanding anything in subsection (4) of section 24 of the Criminal Law (Consolidation) (Scotland) Act 1995 (detention and questioning by customs officers), detention of the suspect under subsection (1) above shall not prevent his subsequent detention under subsection (1) of that section.

Security for customs and excise duties

27

(1) Section 157 of the Customs and Excise Management Act 1979 (bonds and security) is amended as follows.

(2) In subsection (1) (power to require security), for “by bond" substitute “ (or further security) by bond, guarantee ”.

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

(4) In subsection (2) (bonds for the purposes of assigned matters), after “Any bond" insert “ , guarantee or other security ”.

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

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

Civil penalties for breach of excise duty requirements

28

In section 9(2)(a) of the Finance Act 1994 (how to calculate the penalty in cases where provision is made by any enactment for conduct to attract a penalty calculated by reference to an amount of excise duty), for “or any other enactment" substitute “ , or by or under any other enactment, ”.

Correction of reference

29

In section 127 of the Finance Act 1999 (interest on repayments of customs duty), in subsection (1)(b) for “Council Regulation 2454/93" substitute “ Commission Regulation 2454/93 ”.

Part II — Climate change levy

Climate change levy

30

(1) Schedule 6 to this Act (which makes provision for a new tax that is to be known as climate change levy) shall have effect.

(2) Schedule 7 to this Act (climate change levy: consequential amendments) shall have effect.

(3) Part V of Schedule 6 to this Act (registration for the purposes of climate change levy) shall not come into force until such date as the Treasury may appoint by order made by statutory instrument; and different days may be appointed under this subsection for different purposes.

Part III — Income Tax, Corporation Tax and Capital Gains Tax

Chapter I — Charge and rates

Income tax

Charge and rates for 2000-01

31

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

Extension of starting rate to savings income of individuals

32

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

Deduction of income tax from foreign dividends

33

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

Children’s tax credit

34

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

Corporation tax

Charge and main rate for financial year 2001

35

Corporation tax shall be charged for the financial year 2001 at the rate of 30%.

Small companies' rate for financial year 2000

36

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

Capital gains tax

Application of starting rate to capital gains tax

37

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

Chapter II — Other provisions

Giving to charity

Payroll deduction scheme

38

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

Gift aid payments by individuals

39

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

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

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

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

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

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

(7) In subsection (12), paragraphs (b) and (e) and the word “and" immediately preceding paragraph (e) shall cease to have effect.

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

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

(10) This section has effect in relation to—

(a) gifts made on or after 6th April 2000 which are not covenanted payments; and

(b) covenanted payments falling to be made on or after that date;

and any regulations made under subsection (3) of section 25 of the Finance Act 1990 (as substituted by subsection (4) above) within three months of the passing of this Act may be so made as to apply to any payments in relation to which this section has effect.

Gift aid payments by companies

40

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

Covenanted payments to charities

41

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

(2) In section 347A of that Act (annual payments and interest: general rule), subsections (2)(b), (7) and (8) shall cease to have effect.

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

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

(5) In subsection (6) of section 505 of that Act (charities: general), the words “and, for this purpose, all covenanted payments to charity (within the meaning of section 347A(7)) shall be treated as a single item” shall cease to have effect.

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

(7) Section 59 of the Finance Act 1989 (covenanted subscriptions) shall cease to have effect.

(8) Where a deed of covenant executed by an individual before 6th April 2000 provides for the payment of specified amounts, any amount payable under the deed on or after that date shall be determined as if the individual were entitled to deduct tax from that amount at the basic rate.

(9) This section shall have effect in relation to covenanted payments—

(a) falling to be made by individuals on or after 6th April 2000; or

(b) made by companies on or after 1st April 2000.

Millennium gift aid

42

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

Gifts of shares and securities to charities etc

43

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

Gifts to charity from certain trusts

44

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

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

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

(5A) This section applies if—

(a) in a year of assessment qualifying income arises under a UK settlement,

(b) the qualifying income consists of charitable income and non-charitable income, and

(c) expenses of the trustees are to be used to reduce the charitable income for the purpose of calculating a beneficiary's liability to corporation tax.

(5B) The amount of those expenses which can used for that purpose is limited to the amount allocated to the charitable income.

(5C) The amount of the expenses allocated to the charitable income is determined by apportioning them rateably between the charitable income and the non-charitable income.

(5D) In this section—

“charitable income” means income within section 628(1) or 630(1) of ITTOIA 2005,

“non-charitable income” means income which is not charitable income, and

“qualifying income” and “UK settlement” have the same meaning as in section 628 of ITTOIA 2005.

(6) This section has effect in relation to qualifying income arising to a UK trust on or after 6th April 2000.

Loans to charities

45

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

Exemption for small trades etc

46

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

47

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

48

(1) In the Taxation of Chargeable Gains Act 1992, after section 236 insert—

(236A) Schedule 7C (which makes provision for roll-over relief where shares are transferred to an approved employee share ownership plan) shall have effect.

(2) After Schedule 7B to that Act insert the Schedule 7C set out in Schedule 9 to this Act.

49

(1) The Board shall not approve a profit sharing scheme under Schedule 9 to the Taxes Act 1988 (approval of share option schemes and profit sharing schemes) unless the application for approval is received by the Board before 6th April 2001.

(2) For the purposes of subsection (1) an application for approval which is not accompanied by the particulars and evidence referred to in paragraph 1(2) of that Schedule is not regarded as received by the Board until the required particulars and evidence have been received by them.

(3) In section 186 of that Act (approved profit sharing schemes), in subsection (1) (under which the section applies to appropriations of shares made after 5th April 1979) after “5th April 1979" insert “ and before 1st January 2003 ”.

50

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

51

(1) In Schedule 9 to the Taxes Act 1988 (approved share option schemes and profit sharing schemes), in paragraph 3(2) (grounds for withdrawing approval of profit sharing schemes), after “below" in paragraph (e) insert—

; or (f) the trustees appropriate shares to participants, one or more of whom have had free shares appropriated to them, at an earlier time in the same year of assessment, under a relevant share plan

(2) After paragraph 3(3) of that Schedule insert—

(4) For the purposes of sub-paragraph (2)(f) above the reference to persons having had free shares appropriated to them includes persons who would have had free shares appropriated to them but for their failure to obtain a performance allowance (within the meaning of paragraph 25 of Schedule 8 to the Finance Act 2000). (5) In sub-paragraph (2)(f) and (4) above— - “free shares” has the same meaning as in Schedule 8 to the Finance Act 2000; - “relevant share plan”, in relation to a profit sharing scheme, means an employee share ownership plan that— 1. was established by the grantor or a connected company, and 2. is approved under Schedule 8 to that Act. (6) For the purposes of sub-paragraph (5) above “connected company” means— (a) a company which controls or is controlled by the grantor or which is controlled by a company which also controls the grantor, or (b) a company which is a member of a consortium owning the grantor or which is owned in part by the grantor as a member of a consortium.

52

(1) Schedule 9 to the Taxes Act 1988 (share option schemes and profit sharing schemes) is amended in accordance with subsections (2) to (4).

(2) In paragraph 9(1) (requirements to be satisfied by shares in share option schemes), after “below" insert “ (disregarding paragraph 11A) ”.

(3) After paragraph 11 (requirements as to listing etc.) insert—

(11A) (1) In the case of a profit sharing scheme, scheme shares must not be shares— (a) in an employer company, or (b) in a company that— (i) has control of an employer company, and (ii) is under the control of a person or persons within sub-paragraph (2)(b)(i) below in relation to an employer company. (2) For the purposes of this paragraph a company is “an employer company” if— (a) the business carried on by it consists substantially in the provision of the services of the persons employed by it, and (b) the majority of those services are provided to— (i) a person who has, or two or more persons who together have, control of the company, or (ii) a company associated with the company. (3) For the purposes of sub-paragraph (2)(b)(ii) above a company shall be treated as associated with another company if both companies are under the control of the same person or persons. (4) For the purposes of sub-paragraphs (1) to (3) above— (a) references to a person include a partnership, and (b) where a partner, alone or together with others, has control of a company, the partnership shall be treated as having like control of that company. (5) For the purposes of this paragraph the question whether a person controls a company shall be determined in accordance with section 416(2) to (6).

(4) In paragraph 12—

(a) in sub-paragraph (1), in paragraph (c) for “other than" to the end of that paragraph there shall be substituted “ other than those permitted by sub-paragraph (1A) below. ”, and

(b) after sub-paragraph (1) insert—

(1A) Subject to sub-paragraph (1B) below, scheme shares may be subject to— (a) restrictions which attach to all shares of the same class, or (b) a restriction authorised by sub-paragraph (2) below. (1B) In the case of a profit sharing scheme, scheme shares must not be subject to any restrictions affecting the rights attaching to those shares which relate to— (a) dividends, or (b) assets on a winding-up of the company, other than restrictions which attach to all other ordinary shares in the same company.

(5) Subsections (1) to (4) shall be deemed to have come into force on 21st March 2000.

(6) Subsections (3) and (4) do not have effect in relation to shares acquired before 21st March 2000 by the trustees of a profit sharing scheme approved under Schedule 9 to the Taxes Act 1988.

53

(1) In paragraph 2 of Schedule 9 to the Taxes Act 1988 (conditions for approval of share option schemes and profit sharing schemes), after sub-paragraph (2) insert—

(2A) The Board shall not approve a profit sharing scheme unless they are satisfied— (a) that the arrangements for the scheme do not make any provision, and are not in any way associated with any provision made, for loans to some or all of the employees of— (i) the company that established the scheme, or (ii) in the case of a group scheme, any participating company, and (b) that the operation of the scheme is not in any way associated with such loans. (2B) For the purposes of sub-paragraph (2A) above “arrangements” includes any scheme, agreement or understanding, whether or not legally enforceable.

(2) In paragraph 3(2) of that Schedule (withdrawal of approval of profit sharing schemes), before paragraph (d) insert—

(ca) the Board— (i) cease to be satisfied of the matters mentioned in paragraph 2(2A) above, or (ii) in the case of a scheme approved before 21st March 2000, are not satisfied of those matters; or

(3) This section shall be deemed to have come into force on 21st March 2000.

54

No claim for relief under section 229(1) or (3) of the Taxation of Chargeable Gains Act 1992 (roll-over relief where disposal made to employee share ownership trust) may be made in relation to a disposal of shares, or an interest in shares, made on or after 6th April 2001.

55

(1) Section 69 of the Finance Act 1989 (chargeable events in relation to employee share ownership trusts) is amended in accordance with subsections (2) to (5).

(2) In subsection (1) (definition of “chargeable event”), after paragraph (d) insert—

(e) where— (i) the trustees make a qualifying transfer within subsection (3AA) below for a consideration, and (ii) they do not, during the period specified in subsection (5A) below, expend a sum of not less than the amount of that consideration for one or more qualifying purposes, the expiry of that period.

(3) After subsection (3) insert—

(3AA) For the purposes of subsection (1)(a) above a transfer is also a qualifying transfer if— (a) it is a transfer of relevant shares made to the trustees of the plan trust of an employee share ownership plan, (b) the plan is approved under Schedule 8 to the Finance Act 2000 when the transfer is made, and (c) the consideration (if any) for which the transfer is made does not exceed the market value of the shares. (3AB) For the purpose of determining whether a transfer by the trustees is a qualifying transfer within subsection (3AA) above, where on or after 21st March 2000— (a) the trustees transfer or dispose of part of a holding of shares (whether by way of a qualifying transfer or otherwise), and (b) the holding includes any relevant shares, the relevant shares shall be treated as transferred or disposed of before any other shares included in that holding. For this purpose “holding” means any number of shares of the same class held by the trustees, growing or diminishing as shares of that class are acquired or disposed of. (3AC) For the purposes of subsections (3AA) and (3AB) above— - “market value” has the same meaning as in Schedule 8 to the Finance Act 2000; and - “relevant shares” means— 1. shares that are held by the trustees of the employee share ownership trust at midnight on 20th March 2000, and 2. shares purchased by those trustees with original funds after that time. (3AD) For the purposes of subsection (3AC) above— (a) “original funds” means any money held by the trustees of the employee share ownership trust in a bank or building society account at midnight on 20th March 2000, and (b) any payment made by the trustees after that time (whether to acquire shares or otherwise) shall be treated as made out of original funds (and not out of money received after that time) until those funds are exhausted.

(4) In subsection (5) after “(1)(d)" insert “ or (e) ”.

(5) After that subsection insert—

(5A) The period referred to in paragraph (e) of subsection (1) above is the period— (a) beginning with the qualifying transfer mentioned in that paragraph, and (b) ending nine months after the end of the period of account in which that qualifying transfer took place. For this purpose the period of account means the period of account of the company that established the employee share ownership trust.

(6) In section 70 of the Finance Act 1989 (chargeable amounts), after subsection (3) insert—

(4) If the chargeable event falls within section 69(1)(e) above the chargeable amount is an amount equal to— (a) the amount of the consideration received for the qualifying transfer mentioned in section 69(1)(e) above, less (b) the amount of any expenditure by the trustees for a qualifying purpose during the period mentioned in section 69(5A) above.

56

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

Other provisions about employment

Benefits in kind: deregulatory amendments

57

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

Education and Training

58

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

Cars available for private use

59

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

Provision of services through intermediary

60

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

Pension schemes

Occupational and personal pension schemes

61

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

Enterprise incentives

Enterprise management incentives

62

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

Corporate venturing scheme

63

(1) Schedule 15 to this Act (which makes provision for the corporate venturing scheme) has effect.

(2) Schedule 16 to this Act (which makes consequential amendments) has effect.

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

(4) Subject to that, Schedules 15 and 16 apply in relation to shares issued on or after 1st April 2000 but before 1st April 2010.

Enterprise investment scheme: amendments

64

The provisions relating to the enterprise investment scheme are amended in accordance with Schedule 17 to this Act.

Venture capital trusts: amendments

65

The provisions relating to venture capital trusts are amended in accordance with Schedule 18 to this Act.

Taper relief: taper for business assets

66

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

Taper relief: assets qualifying as business assets

67

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

Research and development

Meaning of “research and development”

68

(1) Schedule 19 to this Act (meaning of “research and development”) has effect.

In that Schedule—

Part I contains a new definition of “research and development” for the purposes of the Tax Acts, and

Part II contains consequential amendments.

(2) The amendments in Part II of that Schedule have effect—

(a) for the purposes of income tax and capital gains tax, in relation to the year 2000-01 and subsequent years of assessment, and

(b) for the purposes of corporation tax, for accounting periods ending on or after 1st April 2000.

Tax relief for expenditure on research and development

69

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

(2) Schedule 21 to this Act (which contains consequential amendments) has effect accordingly.

Capital allowances

First year allowances for small or medium-sized enterprises

70

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

First year allowances for ICT expenditure by small enterprises

71

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

Expenditure of a small enterprise

72

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

Repeal of notification requirements

73

(1) In section 118 of the Finance Act 1994 (notification requirements)—

(a) subsections (1) to (5) and (7) to (9) shall cease to have effect; and

(b) in subsection (6), for “the provisions mentioned in subsection (2) above" there shall be substituted—

(a) section 25(1) of the Capital Allowances Act 1990 (meaning of qualifying expenditure for the purposes of writing-down allowances for expenditure on machinery or plant); and (b) section 44(4) of the Finance Act 1971 (provision corresponding to section 25(1) applicable to earlier chargeable periods),

(2) This section has effect for chargeable periods as respects which the period specified in subsection (3A) of that section ends on or after 1st April 2000.

Pool for certain leased assets and inexpensive cars

74

(1) In section 41 of the Capital Allowances Act 1990 (writing-down allowances etc for leased assets and inexpensive cars)—

(a) in subsection (1), paragraphs (b) and (c) and the word “ or ” at the end of paragraph (a); and

(b) in subsection (4), paragraph (a) and, in paragraph (b), the words from “or within (1)(b) or (c)" to “subsection (1)(c)" and the words “or subsection (1)(b) or (c)",

shall cease to have effect for chargeable periods ending on or after the relevant date.

(2) Subsection (3) below applies where—

(a) immediately before the end of the relevant chargeable period, a person was treated for the purposes of sections 24, 25 and 26 of the Capital Allowances Act 1990 as having incurred expenditure on the provision of machinery or plant wholly and exclusively for the purposes of a separate trade carried on by him;

(b) the expenditure fell within subsection (1)(b) or (c) of section 41 of that Act; and

(c) qualifying expenditure in respect of the separate trade for the relevant chargeable period exceeded any disposal value brought into account in respect of that trade for that period.

(3) The balance of the excess (after the deduction of any writing-down allowances made by reference to it) shall be treated for the purposes of sections 24, 25 and 26 of the Capital Allowances Act 1990 as capital expenditure which—

(a) was incurred by that person in the relevant chargeable period on the provision of the machinery or plant for the purposes of the trade which is the actual trade for the purposes of section 41 of that Act; and

(b) does not form part of his qualifying expenditure for that period.

(4) In this section—

“the relevant chargeable period” means the chargeable period immediately preceding that which begins on or before and ends on or after the relevant date;

“the relevant date” means, subject to subsection (5) below, 6th April 2000 for the purposes of income tax and 1st April 2000 for the purposes of corporation tax.

(5) A person may, by a notice given to an officer of the Board, elect that this section shall have effect in relation to any trade carried on by him as if the relevant date were 6th April 2001 or, as the case may be, 1st April 2001.

Machinery and plant allowances for non-residents etc

75

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

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

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

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

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

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

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

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

Production animals

76

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

(2) In paragraph 9(4) of Schedule 5 to the Taxes Act 1988 (treatment of farm animals etc for purposes of Case I of Schedule D), for the words from “in relation to animals" to the end there shall be substituted—

(a) in relation to animals or other creatures kept singly as they apply in relation to herds; and (b) in relation to shares in animals or other creatures as they apply in relation to animals or other creatures themselves.

(3) The enactments amended by subsections (1) and (2) above shall be deemed always to have had effect with the amendments made by those subsections.

Sale and leaseback

77

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

Meaning of “fixture”

78

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

Leased assets under the Affordable Warmth Programme

79

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

Fixtures and machinery and plant on hire-purchase etc

80

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

81

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

Tonnage tax

82

Schedule 22 to this Act (tonnage tax) has effect.

Other relieving provisions

Relief for interest on loans to buy annuities

83

(1) In section 365(3) of the Taxes Act 1988 (loans to buy annuities)—

(a) for the words “the qualifying maximum for the year of assessment", in the first place where they occur, there shall be substituted the words “ the sum of £30,000 ”; and

(b) for those words, in the second place where they occur, there shall be substituted the words “ that sum ”.

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

(3) In section 369(1A) of that Act (deductible percentage where interest payable under deduction of tax), for the words from “the percentage" to the end there shall be substituted “ 23 per cent. ”.

(4) This section has effect in relation to payments of interest made on or after 6th April 2000.

Exemption of payments under New Deal 50plus

84

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

Exemption of payments under Employment Zones programme

85

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

Loan where return bears inverse relationship to results

86

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

Tax treatment of acquisition, disposal or revaluation of certain rights

87

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

Contributions to local enterprise agencies, etc

88

In sections 79(11) and 79A(7) of the Taxes Act 1988 (relief for contributions to local enterprise agencies, business links and similar organisations: time limits), the words “and before 1st April 2000" shall cease to have effect.

Waste disposal: entitlement of successor to allowances

89

In Chapter V of Part IV of the Taxes Act 1988 (provisions relating to the Schedule D charge: deductions), after section 91B (waste disposal: site preparation), insert—

(91BA) (1) This section applies where— (a) site preparation expenditure has been incurred in relation to a waste disposal site, (b) that expenditure was incurred by a person in the course of carrying on a trade, and (c) on or after 21st March 2000— (i) that person (“the predecessor”) ceases to carry on that trade, or ceases to carry it on so far as it relates to that site, and (ii) another person (“the successor”) begins to carry on that trade, or to carry on in the course of a trade the activities formerly carried on by the predecessor in relation to that site. (2) If the conditions specified in the following provisions of this section are met, then, for the purposes of section 91B above— (a) the trade carried on by the successor shall be treated as the same trade as that carried on by the predecessor, and (b) allowances shall be made to the successor (and not to the predecessor) as if everything done to or by the predecessor had been done to or by the successor. (3) The first condition is that the whole of the site in question is transferred to the successor. Provided the successor holds an estate or interest in the whole of the site, it need not be the same as that held by the predecessor. (4) The second condition is that the successor, at the time he first deposits waste material at the site, holds a relevant licence in respect of the site which is then in force. (5) Expressions used in this section have the same meaning as in section 91B.

Capital gains tax: gifts and trusts

Restriction of gifts relief

90

(1) In section 165(1) of the Taxation of Chargeable Gains Act 1992 (relief for gifts of business assets), in the closing words (which list the provisions restricting relief), for “sections 166 and 167" substitute “ sections 166, 167 and 169 ”.

(2) In section 260(1) of that Act (gifts on which inheritance tax is chargeable etc.), in the closing words (which list the provisions restricting relief), for “section 261" substitute “ sections 169 and 261 ”.

(3) In section 165(2)(b)(i) of, and paragraph 2(2)(b)(i) of Schedule 7 to, that Act (shares or securities in respect of which gifts relief may be claimed), for “neither listed on a recognised stock exchange nor dealt in on the Unlisted Securities Market" substitute “ not listed on a recognised stock exchange ”.

(4) In section 165(3)(b) of that Act (disposals of shares or securities excepted from gifts relief), after “shares or securities," insert “ the transferee is a company or ”.

(5) This section has effect in relation to disposals made on or after 9th November 1999.

Disposal of interest in settled property: deemed disposal of underlying assets

91

(1) After section 76 of the Taxation of Chargeable Gains Act 1992, insert—

(76A) Schedule 4A to this Act has effect with respect to disposals for consideration of an interest in settled property.

(2) After Schedule 4 to that Act insert the Schedule 4A set out in Schedule 24 to this Act.

(3) This section applies to any disposal of an interest in settled property made, or the effective completion of which falls, on or after 21st March 2000.

Expressions used in this subsection have the same meaning as in Schedule 4A to the Taxation of Chargeable Gains Act 1992.

Transfers of value by trustees linked with trustee borrowing

92

(1) After section 76A of the Taxation of Chargeable Gains Act 1992 (inserted by section 91(1) above), insert—

(76B) Schedule 4B to this Act has effect with respect to transfers of value by trustees that are, in accordance with the Schedule, treated as linked with trustee borrowing.

(2) After Schedule 4A to that Act (inserted by section 91(2) above), insert the Schedule 4B set out in Schedule 25 to this Act.

(3) After section 85 of that Act, insert—

(85A) Schedule 4C to this Act has effect with respect to the attribution to beneficiaries of gains accruing under Schedule 4B.

(4) After Schedule 4B to the Taxation of Chargeable Gains Act 1992 (inserted by subsection (2) above), insert the Schedule 4C set out in Part I of Schedule 26 to this Act.

The consequential amendments in Part II of Schedule 26 to this Act have effect.

(5) The provisions of this section have effect in relation to any transfer of value in relation to which the material time is on or after 21st March 2000.

The expressions “transfer of value” and “material time” have the same meaning in this subsection as in Schedule 4B to the Taxation of Chargeable Gains Act 1992.

Restriction on set-off of trust losses

93

(1) After section 79 of the Taxation of Chargeable Gains Act 1992, insert—

(79A) (1) This section applies to a chargeable gain accruing to the trustees of a settlement where— (a) in computing the gain, the allowable expenditure is reduced in consequence, directly or indirectly, of a claim to gifts relief in relation to an earlier disposal to the trustees; (b) the transferor on that earlier disposal, or any person connected with the transferor, has at any time— (i) acquired an interest in the settled property, or (ii) entered into an arrangement to acquire such an interest; and (c) in connection with that acquisition or arrangement any person has at any time received, or become entitled to receive, any consideration. (2) Where this section applies to a chargeable gain, no allowable losses accruing to the trustees (in the year in which the gain accrues or any earlier year) may be set against the gain. This applies to the whole of the chargeable gain (and not just the element deferred as a result of the claim to gifts relief). (3) In this section— (a) “gifts relief” means relief under section 165 or 260; and (b) references to losses not being allowed to be set against a chargeable gain are to the losses not being allowed as a deduction against chargeable gains to the extent that they include that gain. (4) The references in subsection (1)(b) above to an interest in settled property have the same meaning as in Schedule 4A.

(2) This section applies to gains accruing on or after 21st March 2000.

Attribution to trustees of gains of non-resident companies

94

(1) After section 79A of the Taxation of Chargeable Gains Act 1992 (inserted by section 93 above), insert—

(79B) (1) This section applies where trustees of a settlement are participators— (a) in a close company, or (b) in a company that is not resident in the United Kingdom but would be a close company if it were resident in the United Kingdom. For this purpose “participator” has the same meaning as in section 13. (2) Where this section applies, nothing in any double taxation relief arrangements shall be read as preventing a charge to tax arising by virtue of the attribution to the trustees under section 13, by reason of their participation in the company mentioned in subsection (1) above, of any part of a chargeable gain accruing to a company that is not resident in the United Kingdom. (3) Where this section applies and— (a) a chargeable gain accrues to a company that is not resident in the United Kingdom but would be a close company if it were resident in the United Kingdom, and (b) all or part of the chargeable gain is treated under section 13(2) as accruing to a close company which is not chargeable to corporation tax in respect of the gain by reason of double taxation relief arrangements, and (c) had the company mentioned in paragraph (b) (and any other relevant company) not been resident in the United Kingdom, all or part of the chargeable gain would have been attributed to the trustees by reason of their participation in the company mentioned in subsection (1) above, section 13(9) shall apply as if the company mentioned in paragraph (b) above (and any other relevant company) were not resident in the United Kingdom. (4) The references in subsection (3) above to “any other relevant company" are to any other company which if it were not resident in the United Kingdom would be a company in relation to which section 13(9) applied with the result that all or part of the chargeable gain was attributed to the trustees as mentioned in that subsection.

(2) This section applies where a chargeable gain accrues on or after 21st March 2000 to a company that is not resident in the United Kingdom.

Disposal of interest in non-resident settlement

95

(1) Section 85 of the Taxation of Chargeable Gains Act 1992 (disposal of interest in non-resident settlements) is amended as follows.

(2) In subsection (2) (market value uplift for interest where trustees become non-resident) for “Subject to subsections (4) and (9) below," substitute “ Subject to subsections (4), (9) and (10) below, ”.

(3) In subsection (5) (market value uplift for interest where trustees become treaty non-resident), at the beginning insert “ Subject to subsection (10) below, ”.

(4) After subsection (9) add—

(10) Subsection (3) or (7) above does not apply to the disposal of an interest created by or arising under a settlement which has relevant offshore gains at the material time. The material time is— (a) in relation to subsection (3) above, the relevant time within the meaning of section 80; (b) in relation to subsection (7) above, the time found under subsection (8) above. (11) For the purposes of subsection (10) above, a settlement has relevant offshore gains at any time if, were the year of assessment to end at that time, there would be an amount of trust gains which by virtue of section 89(2) or paragraph 8(3) of Schedule 4C would be available to be treated as chargeable gains accruing to any beneficiaries of the settlement receiving capital payments in the following year of assessment.

(5) This section applies where the material time (within the meaning of section 85(10) of the Taxation of Chargeable Gains Act 1992, inserted by subsection (4) above) falls on or after 21st March 2000.

Payments by trustees to non-resident companies

96

(1) In section 96(5) of the Taxation of Chargeable Gains Act 1992 (capital payments by trustees to non-resident company), in the opening words (which refer to the persons by whom the company is controlled), omit “and each of them is then resident or ordinarily resident in the United Kingdom".

(2) This section applies to payments received on or after 21st March 2000.

Groups and group relief

Group relief for non-resident companies etc

97

Schedule 27 to this Act has effect.

Recovery of tax payable by non-resident company

98

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

Joint arrangements for claims

99

In paragraph 77 of Schedule 18 to the Finance Act 1998 (power to make provision by regulations about joint arrangements for group relief), in sub-paragraph (1)(a) (arrangements permitting claim for relief without copy of notice of consent to surrender), after “the surrendering company" insert “ , provided authority for the claim being so made is given by a company which is authorised in relation to the claimant company as mentioned in paragraph (b) ”.

Limit on amount of group relief in case of consortium claim

100

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

Notional transfers within groups of companies

101

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

Chargeable gains: non-resident companies and groups etc

102

Schedule 29 to this Act has effect.

International matters

Double taxation relief

103

Schedule 30 to this Act (double taxation relief) shall have effect.

Controlled foreign companies

104

Schedule 31 to this Act (which makes provision in relation to controlled foreign companies) shall have effect.

Corporation tax: use of currencies other than sterling

105

(1) For sections 92 to 95 of the Finance Act 1993 there shall be substituted—

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