Finance Act 1966

Part I — Customs and Excise

Reliefs, drawback, exemptions, etc.

Relief from duty on imported goods.

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Reliefs for shipbuilders in respect of certain duties.

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Drawback on tobacco.

3

Exemption of E.F.T.A. goods from duties on hop oil and hop extracts.

4

Removal of restriction on delivery of imported vodka for home use.

5

As from 1st September 1966, section 109(1) of the Act of 1952 (which provides that no spirits shall be delivered for home use unless they have been warehoused for a period of at least three years) shall not apply to imported vodka consisting of spirits which have had a flavour communicated thereto or an ingredient or material mixed therewith.

Rebate of duty on heavy oils.

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Eligibility of imported goods for rates of revenue duties applicable to goods of Republic of Ireland.

7

Vehicles excise duty.

Unladen weight of vehicles: special bodies.

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Export rebates.

Restriction on export rebates for goods consigned to Convention area.

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Hover vehicles and pipe-lines.

Customs procedures: hover vehicles and related matters.

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Pipe-lines.

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• (1) Goods shall not be imported or exported by means of a pipe-line that is not for the time being approved by the Commissioners for the purposes of this section, and uncleared goods shall not be moved by means of a pipe-line that is not for the time being so approved.

• (2) All goods imported by means of a pipe-line and chargeable with a duty of customs shall be entered for warehousing, and in the customs and excise Acts the expression " the importer " in relation to goods imported by means of a pipe-line shall include the owner of the pipe-line.

• (3) For the purposes of the customs and excise Acts—

• (a) goods imported by means of a pipe-line shall be treated as imported at the time when they are brought within the limits of a port or brought across the boundary into Northern Ireland, and

• (b) goods exported by means of a pipe-line shall be treated as exported at the time when they are charged into that pipe-line for exportation.

• (4) In the customs and excise Acts the expressions " shipping " and " loading " and cognate expressions, where used in relation to importation or exportation shall include, in relation to importation or exportation by means of a pipe-line, the conveyance of goods by means of the pipe-line and the charging and discharging of goods into and from the pipe-line, but subject to any necessary modifications; and any power of making regulations or other instruments relating to the importation or exportation of goods conferred by those Acts may be exercised so as to make provision for the importation or exportation of goods by those means which is different from the provision made for the importation or exportation of goods by other means.

• (5) For goods exported by means of a pipe-line the period for delivery of a specification of the goods under section 49 of the Act of 1952 shall be six days from the time when the goods are charged into the pipe-line for exportation or such longer period as the Commissioners may direct.

• (6) The Commissioners may give their approval under subsection (1) above for such period and subject to such conditions as they think fit and may at any time for reasonable cause—

• (a) vary the terms of their approval, and

• (b) (provided that they have given to the owner of the pipeline not less than three months' written notice of their intention so to do) revoke their approval.

Section 49 of the Pipe-lines Act 1962 shall apply to a notice required by this subsection to be served on the owner of a pipe-line as it applies to a document required by that Act to be so served.

• (7) A person who—

• (a) contravenes subsection (1) above, or contravenes or fails to comply with a condition imposed by the Commissioners under the last foregoing subsection, or

• (b) except with the authority of the proper officer or for just and sufficient cause, obtains access to goods which are in, or in course of conveyance by, an approved pipe-line,

shall be liable to a penalty of five hundred pounds or to imprisonment for a term not exceeding two years or to both and may be detained; and any goods in relation to which the offence was committed may be forfeited.

• (8) Where goods of any of the following descriptions—

• (a) goods which are chargeable with a duty which has not been paid,

• (b) goods on which duty has been repaid or remitted in whole or in part, and

• (c) goods on which drawback has been paid,

are moved by pipe-line, or notified to the proper officer as being goods to be moved by pipe-line, and are at any time thereafter found to be missing or deficient, then, unless it is shown to their satisfaction that the absence or deficiency can be accounted for by natural waste or other legitimate cause, the Commissioners may require the owner of the pipe-line or the proprietor of the goods to pay immediately in respect of the missing goods, or in respect of the whole or any part of the deficiency as they see fit, the amount of the duty unpaid or repaid thereon or, as the case may be, an amount equal to the drawback paid thereon; and any person who, on the written demand of an officer, refuses to pay any sum which he is required to pay under this subsection shall in addition be liable to a penalty of double that sum.

For the purposes of this subsection any absence or deficiency in the case of goods moved by a pipe-line used for the importation or exportation of goods shall be deemed to have taken place within the United Kingdom unless the contrary is shown; and the provisions of this subsection shall have effect without prejudice to any penalty or forfeiture incurred under any other provision of this section or elsewhere in the customs and excise Acts.

• (9) Section 82(3) of the Act of 1952 (protection for Commissioners and their officers from claims for loss or damage to goods in a warehouse, or for unlawful removal from a warehouse) shall have effect so as to protect the Commissioners and their officers, save in corresponding circumstances, from claims for loss or damage to goods in a pipe-line or for unlawful removal of goods from a pipe-line, references to a pipe-line, to goods in a pipeline and to the owner of the pipe-line being substituted for references respectively to a warehouse, the warehoused goods and to the occupier of the warehouse.

• (10) In this section—

• " pipe-line " has the meaning assigned thereto by section 65 of the Pipe-lines Act 1962,

• " owner ", in relation to a pipe-line, means (except in the case of a pipe-line vested in the Crown which in pursuance of arrangements in that behalf is operated by another) the person in whom the line is vested and, in the said excepted case, means the person operating the line, and

• " uncleared goods " means imported goods, whether or not chargeable with a duty of customs, which have not been cleared from customs charge, and in particular goods which are or are to be moved under section 22 of the Act of 1952, and dutiable goods moved from warehouse without payment of duty.

• (11) In the application of this section to Northern Ireland references to the Pipe-lines Act 1962 shall have effect as if that Act extended to Northern Ireland.

Duties relating to betting and gaming.

General betting duty.

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

• (6) The pool betting duty shall not be chargeable on any bet made as mentioned in subsection (1)(c) of this section on or after 24th October 1966, and accordingly from that date—

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

• (b) paragraph 4(a)(i) of Schedule 5 to the Betting, Gaming and Lotteries Act 1963 (which relates to the disposal of amounts staked by means of a totalisator on a dog racecourse) for the words “pool betting duty” there shall be substituted the words “general betting duty” ;

Gaming licence duty.

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Gaming machine licence duty.

14

Additional or supplementary provisions as to duties on betting or gaming.

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

• (5) The supplemental provisions set out in Schedule 3 to this Act shall have effect with respect to the duties relating to betting and gaming.

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

Surcharges and rebates in respect of revenue duties.

Continuation of powers under s. 9 of Finance Act 1961.

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Part II

Charge of income tax for 1966-67.

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Surtax rates for 1965-66.

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Income tax for the year 1965-66 shall be charged, in the case of an individual whose total income exceeded £2,000, in respect of the excess at rates in the pound which respectively exceed the standard rate by the amounts by which the higher rates for the year 1964-65 exceeded the standard rate for that year.

Exemption from tax of social security benefit.

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Benefit under any Act of the present Session establishing a Ministry of Social Security and providing for benefits eligibility for which is to be determined by a Supplementary Benefits Commission established by the Act, or under any Act of the Parliament of Northern Ireland providing for corresponding benefits, shall not be regarded as income for any income tax purposes.

Exclusion from relief of interest on Post Office investment deposits.

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In section 9(1) of the Finance Act 1956 (relief from income tax on certain savings bank interest) the reference to deposits with the Post Office savings bank shall not include a reference to investment deposits as defined in section 1(2) of the Post Office Savings Bank Act 1966.

Personal reliefs for non-residents.

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• (1) This section has effect as respects the application of the proviso to section 227(2) of the Income Tax Act 1952 (under which certain non-residents are eligible for the personal reliefs from income tax subject to an adjustment made by reference to the amount of income tax payable on certain assumptions) to an individual whose income includes any dividends, interest, royalties or other profits (in this section referred to as income eligible for double taxation relief) which are chargeable to income tax but in respect of which relief (other than credit) is available under an Order in Council under section 347 of the Income Tax Act 1952, or under section 31 of this Act, so as to limit the rate of income tax so chargeable (but not so as to confer an exemption and make it income which is not subject to income tax charged in the United Kingdom).

• (2) Subject to subsection (3) below, for the purposes of the said proviso—

• (a) in computing the amount of the income tax payable by the individual the tax chargeable in respect of the income eligible for double taxation relief shall be disregarded,

• (b) in computing the amount of his income subject to income tax charged in the United Kingdom the income eligible for double taxation relief shall be disregarded, and

• (c) in computing his total income from all sources, including income which is not subject to income tax charged in the United Kingdom, income eligible for double taxation relief shall be included and the income tax which would be chargeable on that total income shall be computed without regard to the double taxation relief available in respect of the income eligible for double taxation relief,

and accordingly where this subsection applies the amount of the tax chargeable in respect of the income eligible for double taxation relief shall not be affected by the said section 227(2).

• (3) This section shall not operate so as to make the tax payable by an individual for a year of assessment higher than it would have been if the double taxation relief had not been available.

• (4) This section has effect as respects the year 1966-67 and subsequent years of assessment.

India, Pakistan and Burma pensions.

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• (1) Section 40(1)(a) of the Finance Act 1956 (which exempts from income tax a pension paid under the authority of the Pensions (India, Pakistan and Burma) Act 1955 if it is the income of a person not resident in the United Kingdom, but not the part of the pension paid by virtue of the Pensions (Increase) Act 1962 or earlier Pensions (Increase) Acts) shall have effect subject to the provisions of this section.

• (2) The said section 40(1) shall not apply to so much of any pension of the description in paragraph (a) thereof as is paid by virtue of the application to the pension of the Pensions (Increase) Act 1965 or of any Act passed after this Act for purposes corresponding to the purposes of the said Act of 1965.

Surtax on income under certain settlements: exceptions to s. 415(1) of Act of 1952.

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• (1) Notwithstanding section 12(1) of the Finance Act 1965 (which extends section 415(1) of the Income Tax Act 1952 so as to treat certain income arising under a settlement as being for surtax purposes the income of the settlor) the said section 415(1) shall not apply to income consisting of annual payments made under a partnership agreement to or for the benefit of a former member, or the widow or dependants of a deceased former member, of the partnership, being payments made under a liability incurred for full consideration.

• (2) Notwithstanding the said section 12(1), the said section 415(1) shall not apply to income consisting of annual payments made by an individual, in connection with the acquisition by him of the whole or part of a business—

• (a) to or for the benefit of the individual from whom it is acquired or, if he is dead, to or for the benefit of his widow or dependants, or

• (b) if the acquisition was from a partnership, to or for the benefit of a former member, or the widow or dependants of a deceased former member, of that or any preceding partnership, or to or for the benefit of an individual from whom the business or part was acquired by that or any preceding partnership or, if he is dead, to or for the benefit of the widow or dependants of such an individual,

being payments made under a liability incurred for full consideration.

• (3) Payments made in respect of any individual under a liability incurred in connection with an acquisition from a partnership shall only be excluded from the operation of the said section 415(1) by virtue of paragraph (b) of the last foregoing subsection if, and to the extent that, they are made in substitution for, or matched by reductions in, other payments which would themselves be excluded from its operation.

• (4) Where the right of a former member of a partnership to payments falling due not more than ten years after he ceased to be a member of that partnership has devolved on his death, subsections (1) and (2) above shall apply to the payments as they would apply if he had not died.

• (5) Notwithstanding the said section 12(1), the said section 415(1) shall not apply to income arising under a settlement made by one party to a marriage by way of provision for the other after the dissolution or annulment of the marriage, or while they are separated under an order of a court or under a separation agreement or in such circumstances that the separation is likely to be permanent, being income payable to or applicable for the benefit of that other party.

• (6) For the purposes of this section—

• (a) " former member ", in relation to a partnership, means an individual who has ceased to be a member of that partnership on retirement or death,

• (b) a partnership becomes a " preceding partnership " of another if it transfers its business or part of its business to another and one or more individuals are members of both, and any preceding partnership of the transferor by reference to any part of the business transferred shall also become a preceding partnership of the transferee.

• (7) This section shall be in substitution for section 12(3) of the Finance Act 1965, and shall have effect for the year 1965-66 as well as for later years of assessment.

Dividend increases etc. in 1965-66: exclusion of surtax relief under s. 238 of Act of 1952.

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• (1) Relief shall not be given under section 238 of the Income Tax Act 1952 (relief from surtax where income attributable to a period exceeding a year is received in a year) in respect of any dividends which apart from that section fall to be treated as income of the year 1965-66, being dividends paid by a company resident in the United Kingdom and not being preference dividends.

• (2) In this section—

• " company " includes any body corporate,

• " preference dividends " means dividends paid on shares which do not carry any right to dividends other than dividends at a rate per cent. of the nominal value of the shares which is fixed, or fluctuates only with the standard rate of income tax,

• " shares " includes stock.

Directors and employees of companies granted rights to acquire shares.

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• (1) Where on or after 3rd May 1966 a person realises a gain by the exercise, or by the assignment or release, of a right to acquire shares in a body corporate obtained by that person as a director or employee of that or any other body corporate he shall be chargeable to income tax under Schedule E on an amount equal to the amount of his gain as computed in accordance with this section.

• (2) Subject to subsection (8) below—

• (a) the gain realised by the exercise of any such right at any time shall be taken to be the difference between the amount that a person might reasonably expect to obtain from a sale in the open market at that time of the shares acquired and the amount or value of the consideration given whether for them or for the grant of the right, and

• (b) the gain realised by the assignment or release of any such right shall be taken to be the difference between the amount or value of the consideration for the assignment or release and the amount or value of the consideration given for the grant of the right,

(a just apportionment being made of any entire consideration given for the grant of the right to acquire those shares and other shares or otherwise for the grant of the right to acquire those shares and for something besides) :

Provided that neither the consideration given for the grant of the right nor any such entire consideration shall be taken to include the performance of any duties in or in connection with the office or employment by reason of which the right was granted, and no part of the amount or value of the consideration given for the grant shall be deducted more than once under this subsection.

• (3) Subject to subsection (4) below a person shall, in the case of a right granted by reason of his office or employment, be chargeable to tax under this section in respect of a gain realised by another person—

• (a) if the right was granted to the other person, or

• (b) if the other person acquired the right otherwise than by or under an assignment made by way of a bargain at arm's length, or if the two are connected persons at the time when the gain is realised,

but in a case within paragraph (b) of this subsection the gain realised shall be treated as reduced by the amount of any gain realised by a previous holder on an assignment of the right.

• (4) A person shall not be chargeable to tax by virtue of subsection (3)(b) above in respect of any gain realised by another person if the first-mentioned person was divested of the right by operation of law on his bankruptcy or otherwise, but the other person shall be chargeable to tax in respect of the gain under Case VI of Schedule D.

• (5) If a right to acquire shares in a body corporate is assigned or released in whole or in part for a consideration which consists of or comprises another right to acquire shares in that or any other body corporate, that right shall not be treated as consideration for the assignment or release, but this section shall apply in relation to it as it applies in relation to the right assigned or released and as if the consideration for its acquisition did not include the value of the right assigned or released but did include the amount or value of the consideration given for the grant of the right assigned or released so far as that has not been offset by any valuable consideration for the assignment or release other than the consideration consisting of the other right.

• (6) If as a result of two or more transactions a person ceases to hold a right to acquire shares in a body corporate and he or a connected person comes to hold another right to acquire shares in that or any other body corporate (whether or not acquired from the person to whom the other right was assigned) and any of those transactions was effected under arrangements to which two or more persons holding rights in respect of which tax may be chargeable under this section were parties, those transactions shall be treated for the purposes of the last foregoing subsection as a single transaction whereby the one right is assigned for a consideration which consists of or comprises the other right.

This subsection applies in relation to two or more transactions whether they involve an assignment preceding, coinciding with, or subsequent to, an acquisition.

• (7) This section applies in relation to rights granted at any time in the year 1965-66 or any earlier year of assessment as well as in relation to rights granted in any later year of assessment, but subject to the following subsection.

• (8) The amount of the gain realised at any time by the exercise, or by the assignment or release, of a right to acquire shares granted before 3rd May 1966 shall not exceed the difference between the market value of those shares at that time and their market value on 3rd May 1966 (and no gain shall be so realised unless the later value exceeds the earlier value).

• (9) For the purposes of this section a right to acquire shares is obtained by a person as a director or employee of a body corporate—

• (a) if it is granted to him by reason of his office or employment as a director or employee of the body corporate who is chargeable to tax in respect of that office or employment under Case I of Schedule E, or

• (b) if the right is assigned to him and was granted by reason of any such office or employment of his to some other person,

and paragraph (a) above shall apply to a right granted by reason of a person's office or employment after he has ceased to hold it if it would apply to a right so granted in the last year of assessment in which he did hold it.

• (10) For the purposes of this section—

• (a) references to the release of a right include references to agreeing to the restriction of the exercise of the right,

• (b) any question whether a person is connected with another shall be determined in accordance with paragraph 20 of Schedule 9 to the Finance Act 1962,

• (c) " director " and " employee " have the meanings given by section 390(1) of the Income Tax Act 1952,

• (d) in so far as the context permits, " shares" includes stock,

and this section shall apply in relation to any securities (as defined in paragraph 7(1) of Schedule 11 to the Finance Act 1965) issued by a body corporate as it applies in relation to shares in the body corporate.

• (11) Schedule 4 to this Act shall apply for the purposes of this section and shall be construed as if contained in this section.

Part III — CORPORATION TAX ACTS

Rate of corporation tax for financial years 1964 and 1965, and provisional collection of corporation tax.

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Amendments of Corporation Tax Acts.

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Dividends paid out of pre-1966-67 profits.

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Registered friendly societies carrying on life or endowment business.

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Double taxation relief.

Unilateral relief for underlying tax etc.

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Transitory provisions for company dividends paid to non-residents.

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Transitory provisions for interest and royalties paid to non-residents.

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• (1) This section applies to any payments to a person resident in an overseas territory made in the period comprising the financial years 1966 and 1967, but the Treasury may by order contained in a statutory instrument, of which a draft has been laid before and approved by the Commons House of Parliament, extend or further extend that period in relation to residents in an overseas territory specified in the order (or residents in all overseas territories) and the period as so extended or further extended may include part only of a financial year.

• (2) In Schedule 11 to the Finance Act 1965 (which defines company distributions) neither—

• (a) paragraph 1(1)(d)(iv) (which, as amended by this Act, relates to interest, etc., in respect of securities held by a company which is not resident in the United Kingdom and is in the same group of companies as the paying company), nor

• (b) paragraph 9(1)(c) (royalties paid by a close company to a participator),

shall apply to any such payment if, under an existing double taxation agreement, the recipient is entitled to relief (whether by way of exemption from tax, or by virtue of a limitation on the rate of tax) from income tax (not including surtax) chargeable in the United Kingdom on that payment.

• (3) Subsection (2) above shall not apply to any payment to a company more than fifty per cent. of the voting power in which is controlled, directly or indirectly, by a person or persons resident in the United Kingdom.

• (4) In this section " existing double taxation agreement" means any arrangements having effect by virtue of section 347 of the Income Tax Act 1952, being arrangements specified in an Order in Council under that section of which the draft was approved by the Commons House of Parliament before 1st January 1966, together with any other such arrangements, whenever made, providing for their modification in any respect; but any arrangements taking effect under the said section 347 after the passing of this Act and modifying an existing double taxation agreement in any respect may exclude the provisions of this section as they apply in relation to that agreement, and the exclusion shall be as respects payments, or a specified description of payments, made after the date specified in the arrangements, which may be a date before or after the making of the arrangements.

• (5) In this section " overseas territory", in relation to an existing double taxation agreement, means the territory (other than the United Kingdom) to which the agreement applies.

Transitory provisions for double taxation agreements having retrospective effect.

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Regulations relating to double taxation relief.

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• (1) In section 351(1)(c) of the Income Tax Act 1952 (which authorises the making of the necessary adjustments in respect of income tax deductible from any periodical payment where the tax has not been, but ought to have been, deducted) the word " periodical " (in the expression " periodical payment ") shall cease to have effect.

• (2) The giving of relief under Part XIII of the Income Tax Act 1952 (double taxation relief), or under this Act, in respect of income tax under Schedule F by authorising, pursuant to regulations under the said section 351, the making of distributions of amounts exceeding what would otherwise be distributed shall not affect the provisions of section 47(2) of the Finance Act 1965 (which determine the amount of income tax under Schedule F chargeable in respect of any distribution), and references in that subsection to the amount of the distribution shall be taken as references to that amount, apart from any increase made in pursuance of such regulations.

Part IV

Abolition of investment allowances and amendments as to initial allowances.

35

Termination of free depreciation in development districts.

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• (1) Any district which, immediately before 17th January 1966, was a development district for the purposes of sections 38 and 39 of the Finance Act 1963 (which relate to the computation of writing down allowances for new machinery and plant, or, as the case may be, for new mining expenditure, in certain districts in Great Britain and in districts within Northern Ireland) shall be deemed to have ceased to be such a development district on that date and, save by virtue of subsection (7) of the said section 38, no district shall be treated as such a development district as respects any period falling on or after that date.

• (2) Subject to subsection (3) of this section, the said subsection (7) (which makes provision for the application of the said section 38 to a district in Great Britain which ceases to be a development district and, as applied by subsection (3) of the said section 39, makes the like provision in relation to the said section 39) shall have effect as if the words " in Great Britain " were omitted.

• (3) Notwithstanding anything in the said subsection (7), the said section 38 or 39 shall not apply in relation to a writing down allowance in respect of, or of any contribution towards, any expenditure if a relevant grant within the meaning of section 35(3) of this Act is made in respect of that expenditure and that grant—

• (a) by reason of that expenditure being incurred in connection with an area in relation to which the powers conferred by Part I of the Local Employment Act 1960 are for the time being exercisable, is (or, but for any reduction by reference to a grant under section 1 of the Local Employment Act 1963, would be) payable at a higher rate than that at which it would otherwise have been payable; or

• (b) is payable under an enactment of the Parliament of Northern Ireland and is declared by the Treasury by order made by statutory instrument to be comparable to a grant falling within paragraph (a) of this subsection.

• (4) Subsection (5) of section 35 of this Act shall have effect for the purposes of this section as if the references in that subsection to subsection (3) of that section included references to subsection (3) of this section.

Vehicles which are to be eligible for initial allowances.

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• (1) Vehicles of a construction primarily suited for the conveyance of goods or burden of any description shall be excluded from section 13(1) of the Finance Act 1965 (which makes certain cars ineligible for initial allowances).

• (2) This section has effect as respects expenditure incurred on the provision of vehicles after 16th January 1966, and all such adjustments shall be made, whether by repayment or discharge of tax or otherwise, as are required to give effect to the provisions of this section.

• (3) Expenditure shall not be treated for the purposes of this section as having been incurred after 16th January 1966 by reason only of section 279(2) of the Income Tax Act 1952 (which relates to expenditure incurred by a person for the purposes of a trade before he begins to carry it on).

Statutory redundancy payments.

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• (1) Any redundancy payment, and the corresponding amount of any other employer's payment, shall be exempt from income tax under Schedule E.

• (2) Where a redundancy payment or other employer's payment is made in respect of employment wholly in a trade, profession or vocation carried on by the employer, and within the charge to income tax or corporation tax, the amount of the redundancy payment or the corresponding amount of the other employer's payment shall (if not otherwise so allowable) be allowable as a deduction in computing for the purposes of Schedule D the profits or gains or losses of the trade, profession or vocation, but if it is so allowed by virtue of this section the amount of the rebate recoverable shall (if it is not otherwise to be so treated) be treated as a receipt to be brought into account in computing those profits or gains ; and if the employer's payment was made after the discontinuance of the trade, profession or vocation the net amount so deductible shall be treated as if it were a payment made on the last day on which the trade, profession or vocation was carried on.

• (3) Where a redundancy payment or other employer's payment is made in respect of employment wholly in a business carried on by the employer, and expenses of management of the business are eligible for relief under section 57 of the Finance Act 1965 as extended by section 67(1)(b) of that Act (investment companies and unit trusts) the amount by which the redundancy payment, or the corresponding amount of the other employer's payment, exceeds the recoverable rebate shall (if not otherwise so allowable) be allowable as expenses of management eligible for relief under that section; and if the employer's payment was made after the discontinuance of the business the net amount so allowable shall be treated as if it were expenses of management incurred on the last day on which the business was carried on.

• (4) Where a redundancy payment or other employer's payment is made in respect of employment wholly in maintaining or managing property the expenses of maintaining or managing which were eligible for relief under paragraph 1 or paragraph 13 of Schedule 4 to the Finance Act 1963 (allowable deductions for tax under Case VIII and certain other tax), the amount by which the redundancy payment or the corresponding amount of the other employer's payment exceeds the recoverable rebate shall (if not otherwise allowable under that Schedule) be treated for the purposes of the said Schedule as a payment made by the employer in respect of the maintenance or management of the property, or of such part of it as he may elect; and if the employer's payment was made after the latest time when it could be taken into account for the purposes of relief under the said Schedule 4 as a payment in respect of the maintenance or management of the property or any part of it, it shall be treated as having been made at that time.

• (5) Relief shall not be given under subsections (2), (3) and (4) of this section, or otherwise, more than once in respect of any employer's payment, and if the employee was being employed by the employer in such a way that different parts of the employee's remuneration fell for income tax or corporation tax purposes to be treated in different ways, the amount by which the redundancy payment, or the corresponding amount of the other employer's payment, exceeds the recoverable rebate shall be apportioned to the different capacities in which the employee was employed, and subsections (2), (3) and (4) above shall apply separately to the employment in those capacities, and by reference to the apportioned part of the said amount, instead of by reference to the full amount of the employer's payment, and the full amount of the rebate.

• (6) Where the Minister pays a sum under section 32 of the Redundancy Payments Act 1965 or section 42 of the Contracts of Employment and Redundancy Payments Act (Northern Ireland) 1965 in respect of an employer's payment this section shall apply as if that sum had been paid on account of that redundancy or other employer's payment and, so far as the employer has reimbursed the Minister, as if it had been so paid by the employer.

• (7) In this section " redundancy payment", " employer's payment " and " rebate " have the same meaning as in Part II of the Redundancy Payments Act 1965 or Part III of the Contracts of Employment and Redundancy Payments Act (Northern Ireland) 1965, and—

• (a) references to the corresponding amount of an employer's payment (other than a redundancy payment) are references to the amount of that employer's payment so far as not in excess of the amount of the relevant redundancy payment (and so that where in consequence of section 30(2) of the Redundancy Payments Act 1965 or section 40(2) of the said Act of Northern Ireland, there is no relevant redundancy payment, the corresponding amount of the employer's payment is nil),

• (b) " relevant redundancy payment" shall be construed in accordance with paragraph 8 of Schedule 5 to the Redundancy Payments Act 1965 or paragraph 8 of Schedule 6 to the said Act of Northern Ireland,

and a source of income is " within the charge to " income tax or corporation tax if that tax is chargeable on the income arising from it, or would be so chargeable if there were any such income.

• (8) In subsection (1) above the reference to tax under Schedule E does not include a reference to tax under section 37 of the Finance Act 1960 (which relates only to sums exceeding a limit of £5,000 or more) and accordingly payments exempted by subsection (1) above may be taken into account under that section.

• (9) This section shall apply as respects payments made on or after 6th December 1965 (which is the appointed day under the Redundancy Payments Act 1965 and the said Act of Northern Ireland), and as respects tax for past years of assessment and profits tax chargeable accounting periods, and the reference in subsection (3) of this section to section 57 of the Finance Act 1965 includes a reference to section 425 of the Income Tax Act 1952 as extended by section 438 of that Act and section 69 of the Finance Act 1960 (all of which are repealed by the Finance Act 1965).

Cancellation of tax advantages from certain transactions in securities.

39

• (1) For the purposes of the definition of tax advantage in section 43 (4) (g) of the Finance Act 1960 it shall be assumed that a person who might have received from a company any dividend or other distribution (as defined for the purposes of the Corporation Tax Acts) would have borne the income tax chargeable under Schedule F which the company would have had to account for under section 47(3) of the Finance Act 1965 in respect of the distribution, and an assessment under section 28(3) of the Finance Act 1960 to counteract a tax advantage consisting of the avoidance or reduction of an assessment to income tax which would be payable by a company under the said section 47(3) in respect of a distribution may be made under Case VI of Schedule D on a person other than the company, and may be so made in addition to any assessment to counteract a tax advantage in respect of surtax.

• (2) An assessment so made on a person other than the company may be of an amount arrived at without regard to any set off to which the company would have been entitled under Schedule 12 to the Finance Act 1965.

• (3) After paragraph (2)(d) in the said section 28 there shall be added the following paragraph—

(e) in connection with the transfer directly or indirectly of assets of a company to which paragraph (d) above applies to another such company, or in connection with any transaction in securities in which two or more companies to which paragraph (d) above applies are concerned, the person in question receives non-taxable consideration which is or represents the value of assets available for distribution by such a company, and which consists of any share capital or any security (as defined by paragraph 7(1) of Schedule 11 to the Finance Act 1965) issued by such a company.

• (4) So far as the paragraph (e) added to the said section 28(2) by subsection (3) above relates to share capital other than redeemable share capital, it shall not apply unless and except to the extent that the share capital is repaid (in a winding-up or otherwise), and where the said section 28 applies to a person by virtue of the said paragraph (e) on the repayment of any share capital any assessment to tax under subsection (3) of the said section 28 shall be an assessment to tax for the year in which the share capital is repaid.

• (5) Any notice or notification under subsection (3) or (4) of the said section 28, or under section 29(b) of the Finance Act 1960, concerning the application of the said section 28 to a person who has died may be given or issued to his personal representatives, and the provisions of the said section 28 relating to the making of a statutory declaration, to rights of appeal and to the giving of information shall be construed accordingly.

• (6) In this section—

• " assets available for distribution " means assets which are, or apart from anything done by the company in question would have been, available for distribution by way of dividend, or trading stock of the company,

• " non-taxable ", in relation to a person receiving consideration, means that the recipient does not pay or bear tax on it as income (apart from the provisions of section 28 of the Finance Act 1960),

• " share " includes stock and any other interest of a member in a company,

and the references in subsection (4) above to the repayment of share capital include references to any distribution made in respect of any shares in a winding up or dissolution of the company.

• (7) The amendments made by this section in sections 28 and 29 of the Finance Act 1960, and in the definition of tax advantage as it applies for the purposes of that section, shall not apply to a person in respect of any transaction or transactions in securities if they were carried out before 3rd May 1966, and if any change in the nature of any activities carried on by any person, being a change necessary in order that the tax advantage should be obtainable in consequence of the transaction or transactions, was also effected before that day, but nothing in this section shall be taken to prejudice the operation of the said section 28, without this section, in any such case.

Part V

Estate duty: interests limited to cease on death.

40

Restriction of exemption from estate duty for certain government securities.

41

Gifts inter vivos, etc.: relief from estate duty and other tax.

42

• (1) If any property comprised in a gift inter vivos, and not settled by the gift, is deemed for the purposes of estate duty to pass on a death and capital gains tax or corporation tax is chargeable on a chargeable gain accruing on a disposal by the donee or his personal representatives of an asset which is for the time being comprised in the gift, and which has not been settled by the donee, being a disposal—

• (a) effected before the death, and

• (b) if the principal value of the property is to be ascertained at an earlier time, effected at or before that earlier time,

the principal value of the property for the purposes of estate duty on the death shall be reduced by the amount of that tax, and that reduction shall be made before any reduction of that value under section 64 of the Finance Act 1960 (graduation of charge by reference to period between gift and death).

• (2) If any property ceasing to be settled property is by virtue of subsection (8) proviso or subsection (12) proviso of section 38 of the Finance Act 1957 to be treated as comprised in a gift inter vivos deemed for purposes of estate duty to pass on a death, or as the case may be as comprised in property in which an interest within section 43 of the Finance Act 1940 subsisted, and capital gains tax is chargeable on a chargeable gain accruing on the disposal under section 25(3) of the Finance Act 1965 deemed to be effected by the trustee of the settlement on the occasion of the property ceasing to be settled property, the principal value of the property for the purposes of estate duty on the death shall be reduced by the amount of that tax, and that reduction shall be made before any reduction of that value under section 64 of the Finance Act 1960.

• (3) Where—

• (a) an asset comprised in a gift inter vivos is deemed for purposes of estate duty (including estate duty in Northern Ireland) to pass on a death, and at the time of the death the asset is owned by the donee or is property settled by the gift, or property which by virtue of section 38(9) of the Finance Act 1957 is treated for the purposes of that section as property settled by the gift, and

• (b) the principal value of the asset for the purposes of estate duty on the death (without any reduction under subsection (1) above and without any reduction under section 64 of the Finance Act 1960) exceeds the sums within paragraphs (a) and (b) of paragraph 4(1) of Schedule 6 to the Finance Act 1965 which, if the donee had disposed of the asset at the time of the death, would have been allowable in computing the amount accruing on that disposal,

a part of any estate duty payable in respect of that asset on the death shall be treated for the purposes of Part III of the Finance Act 1965 as if it were an amount of expenditure incurred by the donee on the asset and falling within the said paragraph 4(1)(b); and that part shall be the proportion of the duty which the said excess bears to the said principal value.

• (4) References in this section to any amount of capital gains tax or corporation tax are references to the amount which would not have been payable if the relevant asset had not been disposed of, and, if any part of the chargeable gain accruing on a disposal within subsection (1) or subsection (2) of this section is not chargeable to capital gains tax or corporation tax in the year of assessment or accounting period in which it accrues because of relief for losses accruing in that or any earlier year or accounting period, the amount of tax in respect of that part of the chargeable gain shall be the tax which would have been charged on that part of the gain if it had been the only gain accruing in the year or accounting period and had all been chargeable.

• (5) This section has effect as respects capital gains tax for the year 1965-66 and later years of assessment and applies in relation to deaths and disposals at any time before or after the passing of this Act.

Capital gains.

43

Part VI

Selective employment tax.

44

Part VII — Miscellaneous

Harbour reorganisation schemes: corporation tax and stamp duty.

45

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

Stamping of contract notes etc.

46

Stamp duty on life policies not exceeding two years.

47

Licence not required to deal in postage stamps.

48

Power to inspect books of agents concerned with foreign dividends etc.

49

Information relating to stock jobbers' transactions.

50

• (1) The Board may exercise the powers conferred by this section as respects, and in connection with, any business which is, or has been, carried on by a jobber or dealing broker whose liability to tax in respect of the business is determined on the footing that any excess of his payments in respect of interest on securities over his receipts in respect thereof, being payments made or receipts accrued in pursuance of a contract for the sale or purchase of the securities, is to be treated for all the purposes of the Income Tax Acts or the Corporation Tax Acts as an annual payment made by him.

• (2) With a view to obtaining information about transactions in the course of a business within subsection (1) above, the Board may serve on the jobber or dealing broker by whom the business is or has been carried on a notice requiring him to make available within a time specified in the notice, for inspection by an inspector or other officer of the Board, all such books, accounts and other documents in his possession or power as may be specified or described in the notice, being books, accounts or other documents which in the opinion of the Board contain or may contain information directly or indirectly relating to any such transactions.

• (3) The Board may serve on any broker a notice requiring him to make available within a time specified in the notice, for inspection by an inspector or other officer of the Board, all such books, accounts or other documents in his possession or power as may be specified or described in the notice, being books, accounts or other documents which in the opinion of the Board contain or may contain information relating directly or indirectly to transactions in the course of a business within subsection (1) above.

• (4) The Board may by notice in writing require—

• (a) a person, other than a broker, who has directly or in directly received from a jobber or dealing broker any payment made by the jobber or dealing broker in the course of a business within subsection (1) above, being a payment treated by the jobber or dealing broker as made in respect of interest on securities, to state within a time specified in the notice whether the amount received is in whole or in part received on behalf of, or for payment on to, any other person and, if so, to furnish the name and address of that other person, or

• (b) a person who has directly or indirectly paid to a jobber or dealing broker any sum constituting a receipt by him in the course of a business within subsection (1) above, being a receipt treated by the jobber or dealing broker as accruing in respect of interest on securities, to state within a time specified in the notice whether the amount paid is in whole or in part received from, or paid on account of, any other person and, if so, to furnish the name and address of that other person.

• (5) Section 250(4) of the Income Tax Act 1952 (power to obtain information from nominee shareholders) shall apply for the purpose of obtaining (from any persons to whom that section applies, whether brokers or jobbers or not) information directly or indirectly relating to any transactions in the course of a business within subsection (1) above, and shall so apply as if for references to shares in a company there were substituted references to securities.

• (6) The Board may not exercise their powers under the foregoing provisions of this section for the purpose of obtaining information relating to transactions in any income tax year of assessment ending more than six years before the service of the notice, but, subject to the foregoing provisions of this subsection, the transactions in respect of which they may exercise those powers shall include transactions before the passing of this Act.

• (7) Part III of the Finance Act 1960 (penalties) shall have effect as if subsections (2), (3) and (4) of this section were included in the second column of Schedule 6 to that Act.

• (8) In this section—

• " the Board " means the Commissioners of Inland Revenue,

• " broker " means a member of a stock exchange in the United Kingdom other than a jobber,

• " dealing broker ", in relation to any sale of securities, means a member of a stock exchange in the United Kingdom, other than the London Stock Exchange, who is recognised by the committee of his exchange as carrying on the business of a dealer and authorised by them to deal in those securities,

• " jobber " means a member of the London Stock Exchange who is recognised by the committee thereof as carrying on the business of a jobber.

• " securities " includes shares, and " shares ", except where the context otherwise requires, includes stock, and references to interest include references to dividends.

Members of Parliament of Northern Ireland: Pension Fund and annuity premiums.

51

• (1) Subsections (2) and (3) below shall have effect with respect to the Members' Contributory Pension (Northern Ireland) Fund constituted under section 3 of the Ministerial Salaries and Members' Pensions Act (Northern Ireland) 1965, and sums payable thereout under section 12(1) of that Act (transfer to other pension schemes of sums representing value of accrued pension rights).

• (2) Section 385(2) of the Income Tax Act 1952 (exemption from tax in respect of income of the House of Commons Members' Fund) shall apply in relation to the Fund, and accordingly the Fund shall be included among those referred to in section 36(2) of the Finance Act 1965 (by virtue of which, in the case of funds the income of which is exempt from tax under enactments which include the said section 385, gains accruing from the acquisition and disposal of assets are not chargeable gains).

This subsection shall have effect for the year 1965-66 as well as subsequent years of assessment.

• (3) Any sum payable out of the Fund as mentioned in subsection (1) above shall be treated for the purposes of the Income Tax Acts as having been paid in commutation of an annuity payable by a superannuation fund within the meaning of section 379 of the Income Tax Act 1952 (approved superannuation funds), and the Fund shall be treated as such a superannuation fund for the purposes of any regulations under that section.

• (4) For the purposes of Part III of the Finance Act 1956 (retirement and other annuities), so much of the salary of the holder of any office to which this subsection applies who is also a Member of the House of Commons of Northern Ireland as is equal to the salary to which, pursuant to any Resolution of that House relating to the remuneration of Members, he would be entitled if he did not hold that office shall be treated as remuneration from the office of Member, and not from the office to which this subsection applies, and shall accordingly be treated for the purposes of Part I of Schedule 3 to that Act as pensionable emoluments from the office of Member.

The offices to which this subsection applies are those of Chairman of Ways and Means of the House of Commons of Northern Ireland and Attorney General for Northern Ireland.

Amendments of Sugar Act 1956.

52

Short title, construction, extent and repeals.

53

• (1) This Act may be cited as the Finance Act 1966.

• (2) In this Act Part I shall be construed as one with the Customs and Excise Management Act 1979; . . . ; Part III shall be construed as one with the Corporation Tax Acts; . . . ; . . . ; and so much of Part VII as relates to stamp duties shall be construed as one with the Stamp Act 1891.

• (3) Any reference in this Act to any other enactment shall, except so far as the context otherwise requires, be construed as a reference to that enactment as amended or applied by or under any other enactment, including this Act.

• (4) Except as otherwise expressly provided, such of the provisions of this Act as relate to matters in respect of which the Parliament of Northern Ireland has power to make laws shall not extend to Northern Ireland.

• (5) This Act, in so far as it affects the operation of the Sugar Act 1956, shall extend to the Isle of Man.

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

• (7) The enactments mentioned in Schedule 13 to this Act are hereby repealed to the extent mentioned in the third column of that Schedule, but subject to any provision in relation thereto made at the end of any Part of that Schedule.

SCHEDULE 1

Part I — Determination of Open Market Value

1

• (1) The open market value of any vessel or other structure and its fittings and equipment shall be taken for the purposes of section 2 of this Act to be the price which they would fetch at the time of their delivery pursuant to the contract in question on a sale in the open market between buyer and seller independent of each other.

• (2) The said price shall be determined on the assumption that the buyer will bear freight, insurance and all other costs, charges and expenses incurred in respect of the vessel or structure and other items in question after their delivery as aforesaid or, where delivery is to be effected outside the United Kingdom, after their departure from the United Kingdom for the purpose.

• (3) For the purposes of this paragraph, a sale in the open market between a buyer and seller independent of each other presupposes—

• (a) that the vessel or structure and other items in question are the sole consideration for the price paid, and

• (b) that the price is not influenced by any commercial, financial or other relationship, whether by contract or otherwise, between the seller or any person associated in business with him and the buyer or any person associated in business with him (other than the relationship created by the sale of the said vessel or structure and other items), and

• (c) that neither the seller nor any person associated in business with him has provided any part of the price, and that no part of the price will be returned to the buyer or any person associated in business with him.

• (4) For the purposes of the last foregoing sub-paragraph, two persons shall be deemed to be associated in business with one another if, whether directly or indirectly, either of them has any interest in the business or property of the other, or both have a common interest in any business or property, or some third person has an interest in the business or property of both of them.

Part II — Reductions in Purchase Price or Open Market Value

2

• (1) Where the amount payable in respect of any vessel or other structure under the said section 2 is, by virtue of subsection (3) thereof, to be determined by reference to the price payable as mentioned in that subsection, then—

• (a) if the terms of the contract in question are such that the applicant for the payment will bear any of the following, that is, any freight, insurance or other costs, charges or expenses incurred in respect of the vessel or structure or its fittings or equipment after their delivery pursuant thereto or, where delivery is to be effected outside the United Kingdom, after their departure from the United Kingdom for the purpose, the price shall be treated for the purposes of that subsection as reduced by an amount reflecting the burden thus assumed by the applicant;

• (b) if the whole or any part of the price is payable twelve months or more after the time when the property in the vessel or structure passes or, if later, the time of delivery of the vessel or structure or of its departure from the United Kingdom for the purpose of delivery, the price shall be treated for those purposes as reduced by an amount representing the discount which would be chargeable for obtaining payment at that earlier time at a rate of interest equal to the bank rate then prevailing.

• (2) In the foregoing sub-paragraph “bank rate” means the minimum rate at which the Bank of England will lend to a discount house having access to the Discount Office of the Bank.

3

If, after consultation with the Board of Trade, it appears to the Commissioners that the fittings and other equipment supplied with any vessel or other structure include any items the supply of which would not in the ordinary course of events be undertaken by a person building such a vessel or structure for delivery to another as that other’s property, the price or, as the case may be, open market value referred to in the said subsection (3) shall be treated for the purposes of that subsection as reduced by an amount equal to the open market value of the items in question; and the provisions of paragraph 1 of this Schedule shall apply for the purpose of determining that value, subject to any necessary modifications.

Part III — Supplemental

4

The following provisions of the Customs and Excise Management Act 1979 shall apply in relation to payments under the said section 2 as they apply in relation to drawbacks, allowances or repayments under the Customs and Excise Acts 1979, that is to say, section 135 (time limit on payment), section 136(1) and (2) (offences in connection with claims) and section 167(4) (recovery of overpayments).

5

• (1) Any officer or person authorised by the Commissioners may require any person who has been concerned at any stage with a vessel or other structure in respect of which an application has been made under the said section 2, or with any fittings or other equipment supplied therewith, or with any payment in respect of the vessel or structure or any fittings or other equipment so supplied—

• (a) to furnish, within such time as that officer or person may require, such information as may be reasonably necessary to enable the Commissioners to determine whether the applicant is entitled to a payment under that section, or liable to make any repayment thereunder, or to determine the amount of any payment to which the applicant is so entitled, and

• (b) to produce for inspection by that officer or person, at such time and place as he may require, any books or accounts or other document of whatever nature relating to, or to any payment in respect of, the said vessel, structure, fittings or equipment.

• (2) Any such officer or person shall be entitled to take extracts from or make copies of any document produced to him under the foregoing sub-paragraph.

• (3) If any person fails to comply with any requirement under sub-paragraph (1) above, he shall be liable to a penalty of level 3 on the standard scale, together with a further penalty of ten pounds for each day during which failure to comply with the requirement continues.

6

• (1) Any dispute as to the determination for the purposes of an application under the said section 2 of the price or value referred to in subsection (3) of that section, or of any amount by which that price or value is to be treated as reduced by virtue of subsection (4) thereof, shall be referred to a referee appointed in accordance with the next following sub-paragraph.

• (2) A reference under the foregoing sub-paragraph shall be to a person (not being an official of any government department) appointed by the Lord Chancellor with the concurrence of the Lord Chief Justice of England and Wales or, if the application for the purposes of which the determination is made relates to a vessel or structure constructed in Scotland or Northern Ireland, or was by a company incorporated in Scotland or Northern Ireland, and the applicant in either case so requires, appointed by the Lord President of the Court of Session or as the case may be, by the Lord Chancellor with the concurrence of the Lord Chief Justice of Northern Ireland.

• (3) The procedure on any such reference shall be such as the referee may determine.

• (4) Sub-paragraph (1) above shall not have effect, and any price, value or amount falling to be determined for the purposes of the said subsection (3) or (4) shall be that fixed by the Commissioners, unless, within three months from the time when the Commissioners’ final determination thereof is communicated to him, or such longer time as the Commissioners may allow, a notice requiring a reference under that sub-paragraph has been served on the Commissioners by the person for the purposes of whose application the determination was made.

• (5) The Lord Chief Justice of England and Wales may nominate a judicial office holder (as defined in section 109(4) of the Constitutional Reform Act 2005) to exercise his functions under this paragraph.

• (6) The Lord Chief Justice of Northern Ireland may nominate any of the following to exercise his functions under sub-paragraph (2)—

• (a) the holder of one of the offices listed in Schedule 1 to the Justice (Northern Ireland) Act 2002;

• (b) a Lord Justice of Appeal (as defined in section 88 of that Act).

7

The making by the Commissioners of a payment under the said section 2 determined by reference to the price or value referred to in subsection (3) of that section, or that price or value as reduced by virtue of subsection (4) thereof, shall not be taken as constituting the making by the Commissioners of a final decision under the said subsection (3).

SCHEDULE 2.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tonnage limits.

1

The tonnage of a hover vehicle shall be regarded for the purposes of the Customs and Excise Act 1952 as below the tonnage limits in that Act in—

• section 50(2) (stores),

• section 68(1) (regulations to prevent smuggling),

• section 107(1) (importation and exportation of spirits),

• section 173(1)(b) (importation of tobacco),

• sections 277(3), 278(1) and 279(1) (forfeiture of ships),

and section 48(1) of that Act (goods which may not be exported in small ships) shall not apply to hover vehicles.

Forfeiture of vessels.

2

Sections 107(4) and 173(3) of the said Act (enforcement of duties on spirits and tobacco) shall apply as if any reference to a ship included a reference to a hover vehicle.

Passenger vessel licences.

3

Section 153 of the said Act (excise licences) shall apply as if any reference to a vessel included a reference to a hover vehicle.

Oils used in boats and vessels.

4

• (1) Paragraphs (b) and (c) of section 205 of the said Act (relief for oils etc., used in lifeboats) shall apply to hover vehicles as if they were boats or vessels.

• (2) This Act shall not be taken as applying section 204 of the said Act (relief from duty of oils used as fuel for ships in home waters) to hover vehicles.

SCHEDULE 3

Part I — Duties relating to Betting

1

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

2

• (1) Subject to sub-paragraph (2) of this paragraph, and without prejudice to paragraph 18 of this Schedule, paragraphs 2 and 3 of Schedule 1 to the Betting Duties Act 1963 shall have effect for the purposes of section 12 of this Act as if any reference in those paragraphs to the pool betting duty included a reference to the general betting duty.

• (2) The said paragraphs 2 and 3 in their application to the general betting duty shall have effect subject to the following modifications, that is to say :—

• (a) the said paragraph 2 (which requires notice to the Commissioners of a business involving liability to duty) shall not require a person to make entry of premises used for the purposes of the business in connection only with such betting operations (in this sub-paragraph referred to as " general betting operations") as do not involve liability to the pool betting duty, but shall require him not later than the date when he first uses any premises for the purposes of the business in connection with general betting operations to notify the Commissioners of those premises being so used (whether or not he is also required by the said paragraph 2 to make entry of them): and in relation to books, records, accounts and other documents relating to general betting operations the reference in the said paragraph 3 to premises of which entry has been made under the said paragraph 2 shall have effect as a reference to such of the premises used for the purposes of the business as the Commissioners may direct;

• (b) the said paragraph 2 shall also require a bookmaker to notify the Commissioners of the name of any person acting as his agent for receiving or negotiating bets made otherwise than by way of pool betting or coupon betting or for otherwise conducting general betting operations, and the address of any such person (including any address at which he so acts), but nothing in this provision shall prejudice the separate application of the said paragraphs 2 and 3 to any such person as aforesaid carrying on activities which may involve sums becoming payable by him by way of the general betting duty;

• (c) in the case of a person who at the date when this Act is passed is carrying on or intending to carry on a business which may involve sums becoming payable by him by way of the general betting duty, the said paragraph 2 shall have effect so as to require him to notify the Commissioners of his doing so or intending to do so and of the matters referred to in the foregoing provisions of this sub-paragraph not later than one week after that date, unless apart from this provision he would be required by the said paragraph 2 to notify them only by a later time.

• (3) The power of the Commissioners under sub-paragraph (b) of the said paragraph 3 to give directions as to the period for which a person carrying on such a business as is mentioned in the said paragraph 2 is to preserve any books, records, accounts or documents relating to the business shall be exercisable in relation to any particular class of such books, records, accounts or documents as well as in any particular case.

3

Where in the case of any track or other premises an officer has reason to believe that bookmaking on events taking place thereon is being or is to be carried on, or that facilities for sponsored pool betting on those events are being or are to be provided, or that a totalisator is being or is to be operated in connection with those events, at a place on those premises or on any ground or premises adjacent thereto, he shall be entitled for the purpose of exercising the powers conferred by this paragraph to be admitted without payment to that place, and he may require—

• (a) any person who appears to him to be or intend carrying on bookmaking, providing such facilities or operating a totalisator there to give such information as he may demand, and to produce to him any accounts, records or other documents which appear to him to be connected with the business of bookmaking or with the provision of those facilities or the operation of that totalisator or which it appears to him will establish the identity of that person ; and

• (b) any person who appears to him to have made a bet there with any bookmaker, or through the persons providing any such facilities, or by means of a totalisator, to give such information with respect to the bet as he may demand and to produce to him any document in connection with the bet supplied to that person by the bookmaker, the persons providing those facilities, or the operator of that totalisator, as the case may be,

and any such person as aforesaid shall comply with any such requirement.

4

Where an officer—

• (a) has reason to believe that any person who is not a bookmaker is holding himself out as mentioned in section 15(1) of this Act at any place, and

• (b) has reason to-suspect that person to have become liable by virtue of the said section 15(1) to pay an amount by way of the general betting duty or pool betting duty,

the officer shall have the like powers with respect to that place as if the person so holding himself out were a bookmaker and that place were such a place as is mentioned in paragraph 3 of this Schedule.

5

Where an amount is due on account of the general betting duty from any person, but by reason of his failure to keep or to produce or furnish to the proper officer the accounts, records or other documents required under or by virtue of this Schedule, or to take or permit to be taken any other step which he is so required to take or permit to be taken, or by reason of the accounts, records or other documents kept, produced or furnished being materially incomplete or inaccurate, the Commissioners are unable to ascertain the amount of duty properly due from him, the Commissioners may estimate the amount due ; and (without prejudice to the recovery of the full amount due or to the making of a further estimate in that behalf) the amount estimated shall be recoverable as duty properly due unless in any action relating thereto the person liable proves the amount properly due, and that amount is less than the amount estimated.

6

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

PART II — Duties relating to Gaming

Gaming and gaming machine licences.

7

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

8

The Commissioners may by regulations provide for the adjustment (by way of repayment or of a further charge of duty) of the duty charged on a gaming licence in respect of any premises where that duty is determined by reference to. the rateable value of a hereditament consisting of or comprising those premises and an alteration of the valuation list affecting that hereditament or that rateable value comes into effect as respects the whole of the period of validity of that licence.

9

Section 234 of the Customs and Excise Act 1952 (which relates to payment for excise licences by cheque) shall apply to the duty on a gaming licence or a gaming machine licence as if for the reference to a penalty of fifty pounds there were substituted a reference to a penalty of five hundred pounds.

10

The proper officer may, in such manner as the Commissioners may direct, and without any additional payment—

• (a) transfer a gaming licence in respect of any premises to a successor in title to the interest in those premises of the person to whom the licence was granted ;

• (b) amend a gaming machine licence by substituting different premises for those in respect of which it is for the time being in force.

11

If while a gaming licence or gaming machine licence is in force in respect of any premises, and not later than the end of June immediately preceding the date when the licence is due to expire, the holder of the licence surrenders the licence to the proper officer and satisfies the proper officer—

• (a) in the case of a gaming licence, that those premises will not be used on or after the date of surrender of the licence for the purpose of gaming by way of bingo or, as the case may be, by way of any game to which section 13 of this Act for the time being applies ; or

• (b) in the case of a gaming machine licence, that no gaming machine to which in accordance with section 14(3) of this Act the licence could be applicable will be kept on those premises on or after the date of the surrender of the licence,

he shall be entitled in respect of the period of validity of the licence unexpired at that date to repayment of the following proportion of the full amount of the duty chargeable on such a licence in respect of those premises, that is to say—

• (i) if the licence is surrendered before 1st January, three-quarters :

• (ii) if the licence is surrendered on or after 1st January but before 1st April, one-half ;

• (iii) if the licence is surrendered on or after 1st April, one-quarter.

12

Where a gaming licence is granted after 30th June and before 1st October in any year—

• (a) to a person who has not within the two years ending with 30th September last preceding the grant of the licence held a gaming licence of any description; and

• (b) in respect of premises in respect of which no such licence has been in force at any time during those two years,

the licence may be granted so as to expire at the end of 30th September falling between three and fifteen months after the date of the grant.

13

Where the holder of a gaming licence or gaming machine licence in respect of any premises applies before the date of the expiration of that licence for an identical licence in continuation thereof, the new licence may be granted before that date so as to take effect on the day after that date, and section 13(3) or, as the case may be, 14(5) of this Act shall apply as if the licence had been granted on that day.

Provision of information, etc.

14

Where at or at any time after the passing of this Act any premises are, or are to be, used for such a purpose and in such circumstances that their use for that purpose and in those circumstances on or after 1st October 1966 requires a gaming licence or a gaming machine licence to be in force in respect of those premises, the person so using or proposing so to use those premises shall inform the Commissioners of that use or proposed use of those premises not later than ten days after the date of the passing of this Act or the first day thereafter on which the premises are so used.

15

Any person who engages in Great Britain by way of business in importing, manufacturing, selling, hiring or otherwise supplying gaming machines shall—

• (a) keep such records with respect to the gaming machines imported, manufactured, sold, hired or otherwise supplied by him as the Commissioners may direct and preserve those records for such period as the Commissioners may direct on such premises used for the purposes of his business as the Commissioners may approve;

• (b) permit any officer to enter on any premises used for the purposes of his business, and to inspect any gaming machines on those premises and inspect and take copies of any such records as aforesaid;

and any such person, and any other person employed in, or having functions in connection with, his business shall, if required so to do by the Commissioners or an officer, produce, at a time and place to be specified by the Commissioners or officer, any such records as aforesaid and give such other information relating to the gaming machines imported, manufactured, sold, hired or otherwise supplied by him as the Commissioners or officer may require.

16

Any officer may enter on any premises in respect of which a gaming machine licence is in force, and on any other premises on which he has reason to suspect that gaming by means of gaming machines is carried on, and inspect those premises and any gaming machine thereon and require the production of any gaming machine licence for the time being in force in respect of those premises ; and any person concerned in the management of those premises shall comply or secure compliance with any such requirement and give such other information with respect to the use or keeping of gaming machines on those premises as the officer may require.

Modification of agreements.

17

• (1) Where a person who is granted a gaming licence or gaming machine licence in respect of any premises has before 1st October 1966 entered into an agreement with any other person whereby that other person is entitled to use those premises after that date for the purpose of gaming or, as the case may be, whereby the first-mentioned person provides a gaming machine to be made available by that other person for play on those premises after that date, and the consideration from that other person under that agreement does not take account of the duty on that licence, the first-mentioned person shall be entitled to recover from that other person such amount, if any, not exceeding the amount of the duty, in such manner, as may be agreed between them (or, in default of such agreement, as may be determined by the appropriate court) to be fair in all the circumstances, having regard in particular to the extent, if any, to which, while the licence is in force, the premises will be or are likely to be used otherwise than by that person for the purpose of gaming or, as the case may be, to the period for which, under the agreement, the first-mentioned person is to provide a gaming machine as aforesaid on those premises.

• (2) In the foregoing sub-paragraph, the expression " the appropriate court " means—

• (a) where the premises in question are situated in England or Wales and the amount of the duty on the licence in question exceeds £5,000, the High Court;

• (b) in any other case, the county court or, if the premises in question are situated in Scotland, the sheriff.

PART III — Enforcement and General

18

• (1) Without prejudice to any other provision of this Schedule, the Commissioners may make regulations providing for any matter for which provision appears to them to be necessary for the administration or enforcement of the general betting duty or the duty on gaming licences or on gaming machine licences, or for the protection of the revenue from any of those duties.

• (2) Regulations under this paragraph may in particular include provision—

• (a) for the furnishing to such persons or displaying in such manner of such information or records as the regulations may require by persons engaging or proposing to engage in any activity by reason of which they are or may be or become liable for duty, and by persons providing facilities for another to engage in such an activity or entering into any transaction with another in the course of any such activity of his;

• (b) for the keeping, preservation and production of accounts, records or other documents by persons engaging in any such activity;

• (c) for the inspection of the accounts, records and other documents of persons engaging or suspected of engaging in any such activity, and of premises or equipment used or suspected of being used by such persons for or in connection with any such activity and of any other premises where any such activity is carried on.

19

Paragraphs 4, 5 and 6 of Schedule 1 to the Betting Duties Act 1963 (which relate to offences and penalties) shall have effect as if—

• (a) in the said paragraph 4 for the words " at the election of the Commissioners" there were substituted the words " whichever is the greater ";

• (b) any reference in the said paragraph 4 to the pool betting duty included a reference to the general betting duty;

• (c) the references in sub-paragraph (b) of the said paragraph 4 and in the said paragraph 5 to the provisions of paragraph 2 or 3 of that Schedule included a reference to the provisions of, or of any regulations "made under, any of the following paragraphs of this Schedule, namely, paragraph 1, paragraph 3 (including that paragraph as applied by paragraph 4), and paragraphs 14, 15, 16 and 18 ;

• (d) the references in sub-paragraphs (c) and (d) of paragraph 4 of that Schedule to the pool betting duty included references to the provisions of this Act relating to gaming or gaming machines ;

and, without prejudice to section 7(2) of that Act (which provides for that Act to be construed as one with the Customs and Excise Act 1952), paragraphs 7 and 8 of that Schedule shall cease to have effect.

20

• (1) Where, on the conviction by virtue of paragraph 19 of this Schedule of any person of an offence under paragraph 4 of Schedule 1 to the Betting Duties Act 1963 in connection with the general betting duty, the Commissioners—

• (a) certify to the court by or before whom that person is so convicted that the conviction is a second or subsequent conviction for such an offence committed (whether by that or some other person) in the course of the operation of the same premises as a licensed betting office and while the same person has been the holder of a betting office licence in respect thereof ; and

• (b) make application to that court for effect to be given to this sub-paragraph,

that court shall order that the betting office licence in respect of those premises shall be forfeited and cancelled.

• (2) A licence shall not be forfeited or cancelled under such an order made by a court in England or Wales—

• (a) until the date of expiration of the period within which notice of appeal against the conviction which gave rise to the order may be given ; or

• (b) if notice of appeal against that conviction is duly given within the period aforesaid, until the date of the determination or abandonment of the appeal; or

• (c) if on any such appeal the appeal is allowed.

• (3) A licence shall not be forfeited or cancelled under such an order made by a court in Scotland—

• (a) until the expiration of the period of fourteen days commencing with the date on which the order was made ; or

• (b) if an appeal against the conviction which gave rise to the order is begun within the said period, until the date when that appeal is determined or abandoned or deemed to have been abandoned; or

• (c) if on any such appeal the appeal is allowed.

• (4) Where a betting office licence held by any person in respect of any premises is forfeited and cancelled in pursuance of an order under sub-paragraph (1) of this paragraph, the clerk of the court by whom the order was made shall, unless he is also clerk to the appropriate authority within the meaning of Schedule 1 to the Betting, Gaming and Lotteries Act 1963 who last either granted or renewed the licence, send a copy of the order to the clerk to that authority ; and, without prejudice to the renewal by that authority of any other betting office licence held by that person, that authority shall, notwithstanding anything in paragraph 20(1) of the said Schedule 1, refuse any application by that person for the grant of a new betting office licence in respect of those or any other premises made less than twelve months after that forfeiture and cancellation.

21

• (1) If any premises are used for the purposes of gaming in contravention of section 13(1) of this Act—

• (a) any provider of the premises and any person concerned in the organisation or management of the gaming shall each be liable—

• (i) on summary conviction to a penalty of treble the amount of the duty on the appropriate gaming licence, or to imprisonment for a term not exceeding twelve months, or to both ;

• (ii) on conviction on indictment, to the like penalty, or to imprisonment for a term not exceeding two years, or to both ; and

• (b) in addition and without prejudice to any liability under paragraph (a) of this sub-paragraph, unless and until the appropriate gaming licence in respect of those premises is taken out during the period of twelve months beginning with 1st October during which the contravention occurred, an amount equal to the duty on the appropriate gaming licence, together with interest thereon from the date of the contravention, shall become due and be recoverable as a debt due to the Crown jointly and severally from all or any of the persons liable under the said paragraph (a).

• (2) The court by or before whom a person is convicted under sub-paragraph (1)(a) of this paragraph may order anything produced to the court and shown to the satisfaction of the court to relate to the contravention to be forfeited and either destroyed or dealt with in such other manner as the court may order.

22

• (1) If any gaming machine is brought onto or kept on any premises in contravention of section 14(1) of this Act, each of the following persons, namely—

• (a) any person who controls the use of such machines while on those premises ;

• (b) any other person responsible for the management of those premises ;

• (c) in the case of such a contravention by reason of the absence of a gaming machine licence which would fall to be granted to the supplier of such a machine on the premises, that supplier,

shall be liable to a penalty of five hundred pounds.

• (2) In the case of any such contravention of the said section 14(1) as is referred to in sub-paragraph (1) of this paragraph, if any of the persons so referred to was knowingly or recklessly concerned in that contravention, or if any other person was knowingly concerned in, or in the taking of steps with a view to, that contravention, he shall be liable—

• (a) on summary conviction, to a penalty of one thousand pounds, or to imprisonment for a term not exceeding twelve months, or to both ;

• (b) on conviction on indictment, to the like penalty, or to imprisonment for a term not exceeding two years, or to both.

• (3) If any gaming machine licence which is or ought to be in force in respect of any premises is not produced on those premises to an officer on demand by him—

• (a) the officer may detain all gaming machines found on those premises pending the production of that licence ; and

• (b) if the appropriate licence valid at the date of the demand for its production is not produced to the officer within seven days, all those machines shall be liable to forfeiture;

and section 10 of the Customs and Excise Act 1952 (which relates to the obstruction of officers and interference with things liable to forfeiture) shall apply in relation to any gaming machine while it is detained by virtue of paragraph (a) of this sub-paragraph as it applies in relation to any thing liable to forfeiture.

23

• (1) If a justice of the peace is satisfied on information on oath that there is reasonable ground for suspecting that an offence in connection with the general betting duty or a contravention of section 13(1) or 14(1) of this Act is being, has been, or is about to be committed on any premises, he may issue a warrant in writing authorising any officer to enter those premises, if necessary by force, at any time within fourteen days from the time of the issue of the warrant and search them ; and any officer who enters the premises under the authority of the warrant may—

• (a) seize and remove any records, accounts or other documents, money or valuable thing, instrument, gaming machine or other thing whatsoever found on the premises which he has reasonable cause to believe may be required as evidence for the purposes of proceedings in respect of such an offence or contravention ; and

• (b) search any person found on the premises whom he has reasonable cause to believe to be carrying on bookmaking, or, as the case may be, concerned in the organisation or management of gaming on the premises.

• (2) In the application of this paragraph to Scotland, any reference to a justice of the peace includes a reference to the sheriff and to a magistrate.

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