Finance Act 1989

• (b) in subsection (2), for the word “award” in the first place where itoccurs there shall be substituted the word “penalty” and for that wordin the second place where it occurs there shall be substituted the word “imposition”, and

• (c) in subsection (4), for the words “award against” there shall besubstituted the words “imposition on” and for the word “award” thereshall be substituted the word “penalty”.

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

• (4) In section 102 (mitigation of penalties), for the words “recoverythereof” there shall be substituted the words “a penalty”.

• (5) In section 105 (evidence)—

• (a) the following paragraph shall be substituted for paragraph (a) ofsubsection (1)—

(a) pecuniary settlements may be accepted instead of a penalty beingdetermined, or proceedings being instituted, in relation to any tax,

,

• (b) in paragraph (b) of subsection (2), for the words “sum” onwards thereshall be substituted the words “tax due from him”, and

• (c) after that paragraph there shall be inserted the words

and (c) any proceedings for a penalty or on appeal against the determination ofa penalty.

• (6) In section 112 (loss of documents etc.), the following subsection shallbe added at the end—

(3) The references in subsection (1) above to assessments to tax includereferences to determinations of penalties; and in its application to suchdeterminations the proviso to that subsection shall have effect with theappropriate modifications.

• (7) In section 113 (form of documents)—

• (a) the following subsection shall be inserted after subsection (1C)—

(1D) Where an officer of the Board has decided to impose a penalty undersection 100 of this Act and has taken all other decisions needed for arrivingat the amount of the penalty, he may entrust to any other officer of the Boardresponsibility for completing the determination procedure, whether by meansinvolving the use of a computer or otherwise, including responsibility forserving notice of the determination on the person liable to the penalty.

and

• (b) in subsection (3)—

• (i) after the words “Every assessment,” there shall be inserted the words “determination of a penalty,”,

• (ii) after the words “notice of assessment” there shall be inserted thewords “, of determination”, and

• (iii) after the words “levying tax” there shall be inserted the words “ordetermining a penalty”.

• (8) In paragraph 5 of Schedule 3 (rules for assigning proceedings toCommissioners), for the words “section 100(4)” there shall be substitutedthe words “section 100C or an appeal under section 100B against thedetermination of a penalty”.

• (9) In section 41 of the Development Land Tax Act 1976(administration of development land tax) the following subsection shall beinserted after subsection (1)—

(1A) Nothing in sections 167 to 169 of the Finance Act 1989 shall apply topenalties relating to development land tax.

Time limits.

169

• (1) The following section shall be substituted for section 103 of the Taxes Management Act 1970—

(103) (1) Subject to subsection (2) below, where the amount of a penalty is to beascertained by reference to tax payable by a person for any period, thepenalty may be determined by an officer of the Board, or proceedings for thepenalty may be commenced before the Commissioners or a court— (a) at any time within six years after the date on which the penalty wasincurred, or (b) at any later time within three years after the final determination of theamount of tax by reference to which the amount of the penalty is to beascertained. (2) Where the tax was payable by a person who has died, and the determinationwould be made in relation to his personal representatives, subsection (1)(b)above does not apply if the tax was charged in an assessment made later thansix years after the end of the chargeable period for which it was charged. (3) A penalty under section 99 of this Act may be determined by an officer ofthe Board, or proceedings for such a penalty may be commenced before a court,at any time within twenty years after the date on which the penalty wasincurred. (4) A penalty to which neither subsection (1) nor subsection (3) above appliesmay be so determined, or proceedings for such a penalty may be commencedbefore the Commissioners or a court, at any time within six years after thedate on which the penalty was incurred or began to be incurred.

• (2) The amendment made by subsection (1) above shall not affect theapplication of section 103(4) of the Taxes Management Act1970 to proceedings under section 100 of that Act as it has effect before theamendment made by section 167 above.

Up-rating of certain penalties.

170

• (1) In section 23(8) of the Taxes Act 1988 (maximum penalty for agents failing to make certain payments on behalf of principals), for “£50” there shall be substituted “£300”.

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

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

• (4) In—

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

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

• (c) section 658(5) of that Act (maximum penalty for false statements or representations relating to purchased life annuities),

for “£500” there shall be substituted “£3,000”.

• (5) In paragraph 2(4) of Schedule 19A to that Act and Schedule 16A to the Finance Act 1973 (maximum penalty for incorrect return byLloyd’s agent), for the words “£500 in the case of fraud and £250 in the case of negligence” there shall be substituted “£3,000”.

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

Part III — Miscellaneous and General

Inheritance tax

Gifts to housing associations.

171

• (1) The following section shall be inserted in the Inheritance Tax Act 1984 after section 24—

(24A) (1) A transfer of value is exempt to the extent that the value transferred byit is attributable to land in the United Kingdom given to a registered housingassociation. (2) In subsection (1) above “registered housing association”means a registered housing association within the meaning of the Housing Associations Act 1985 or Part VII of the Housing (Northern Ireland) Order 1981. (3) Subsections (2) to (5) of section 23 and subsection (4) of section 24above shall apply in relation to subsection (1) above as they apply inrelation to section 24(1).

• (2) In section 23(5) of the Inheritance Tax Act 1984 the words “or, where it is land, of a body mentioned in section 24Abelow” shall be added at the end.

• (3) In section 29(5) of that Act—

• (a) the words “or, where it is land, of a body mentioned in section24A” shall be inserted at the end of paragraph (b), and

• (b) after “24(3) and (4),” there shall be inserted “24A(3),”.

• (4) In section 161(2)(b)(ii) of that Act after “24,” there shall beinserted “24A,”.

• (5) In section 102(5) of the Finance Act 1986 afterparagraph (e) there shall be inserted—

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

.

• (6) This section shall apply to transfers of value made on or after 14th March1989.

Abatement of exemption where claim settled out of beneficiary’s ownresources.

172

• (1) The following section shall be inserted after section 29 of the Inheritance Tax Act 1984—

(29A) (1) This section applies where— (a) apart from this section the transfer of value made on the death of anyperson is an exempt transfer to the extent that the value transferred by itis attributable to an exempt gift, and (b) the exempt beneficiary, in settlement of the whole or part of any claimagainst the deceased’s estate, effects a disposition of property not derivedfrom the transfer. (2) The provisions of this Act shall have effect in relation to the transferas if— (a) so much of the relevant value as is equal to the following amount, namelythe amount by which the value of the exempt beneficiary’s estate immediatelyafter the disposition is less than it would be but for the disposition, or (b) where that amount exceeds the relevant value, the whole of the relevantvalue, were attributable to such a gift to the exempt beneficiary as ismentioned in subsection (3) below (instead of being attributable to a giftwith respect to which the transfer is exempt). (3) The gift referred to in subsection (2) above is a specific gift withrespect to which the transfer is chargeable, being a gift which satisfies theconditions set out in paragraphs (a) and (b) of section 38(1) below. (4) In determining the value of the exempt beneficiary’s estate for thepurposes of subsection (2) above— (a) no deduction shall be made in respect of the claim referred to insubsection (1)(b) above, and (b) where the disposition referred to in that provision constitutes a transferof value— (i) no account shall be taken of any liability of the beneficiary for any taxon the value transferred, and (ii) sections 104 and 116 below shall be disregarded. (5) Subsection (1)(b) above does not apply in relation to any claim againstthe deceased’s estate in respect of so much of any liability as is, inaccordance with this Act, to be taken into account in determining the valueof the estate. (6) In this section— - “exempt gift”, in relation to a transfer of value fallingwithin subsection (1)(a) above, means— (a) a gift with respect to which the transfer is (apart from this section)exempt by virtue of the provisions of any of sections 18 and 23 to 28 above,or (b) where (apart from this section) the transfer is so exempt with respect toa gift up to a limit, so much of the gift as is within that limit; - “the exempt beneficiary”, in relation to an exempt gift,means any of the following, namely— (a) where the gift is exempt by virtue of section 18 above, the deceased’sspouse, (b) where the gift is exempt by virtue of section 23 above, any person orbody— (i) whose property the property falling within subsection (1) of that sectionbecomes, or (ii) by whom that property is held on trust for charitable purposes, (c) where the gift is exempt by virtue of section 24, 25 or 26 above, any bodywhose property the property falling within subsection (1) of that sectionbecomes, (d) where the gift is exempt by virtue of section 24A above, any body to whomthe land falling within subsection (1) of that section is given, and (e) where the gift is exempt by virtue of section 27 or 28 above, the trusteesof any settlement in which the property falling within subsection (1) of thatsection becomes comprised; - “gift” and “specific gift” have the samemeaning as in Chapter III of this Part; and - “the relevant value”, in relation to a transfer of valuefalling within subsection (1)(a) above, means so much of the value transferredby the transfer as is attributable to the gift referred to in that provision.

• (2) This section shall have effect in relation to deaths occurring on or afterthe day on which this Act is passed.

Stamp duty etc.

Insurance: abolition of certain duties.

173

• (1) Stamp duty shall not be chargeable under—

• (a) the heading “Policy of Life Insurance” in Schedule 1 tothe Stamp Act 1891, or

• (b) paragraph (3) of the heading “Bond, Covenant, or Instrument of any kindwhatsoever” in that Schedule (superannuation annuities).

• (2) Subject to section 4 of the Stamp Act 1891 (separate charges oninstruments containing or relating to several distinct matters) an instrumentwhich, but for subsection (1) above, would be chargeable with stamp duty underparagraph (3) of the heading mentioned in paragraph (b) of that subsectionshall not be chargeable with stamp duty under any other provision of the StampAct 1891.

• (3) Section 100 of the Stamp Act 1891 (penalty for not making out policy ormaking policy not duly stamped) shall cease to have effect.

• (4) Section 118 of the Stamp Act 1891 (assignment of life insurance policy tobe stamped before payment of money assured) shall cease to have effect.

• (5) Section 47(3) of the Finance Act 1966 (enhanced dutywhere policy not exceeding 2 years is varied so as to exceed 2 years) andsection 5(3) of the Finance Act (Northern Ireland)1966 (equivalent provision for Northern Ireland) shall cease to have effect.

• (6) Subsections (1) and (2) above apply to instruments made after 31stDecember 1989.

• (7) So far as it relates to section 100(1) of the 1891 Act, subsection (3)above applies where a person receives, or takes credit for, a premium orconsideration for insurance after 30th November 1989.

• (8) So far as it relates to section 100(2) of the 1891 Act, subsection (3)above applies where the policy is made after 31st December 1989.

• (9) Subsection (4) above applies to instruments of assignment made after 31stDecember 1989.

• (10) Subsection (5) above applies where the policy is varied after 31stDecember 1989 (whenever it was made).

Unit trusts.

174

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

Stamp duty: stock exchange nominees

175

• (1) The Treasury may by regulations provide that where —

• (a) circumstances would (apart from the regulations) give rise to a charge to stamp duty under Part I of Schedule 13 to the Finance Act 1999 (conveyance or transfer on sale) and to a charge to stamp duty reserve tax,

• (b) the circumstances involve a stock exchange nominee, and

• (c) the circumstances are such as are prescribed,

the charge to stamp duty shall be treated as not arising.

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

• (3) In this section —

• (a) “prescribed” means prescribed by the regulations, and

• (b) “stock exchange nominee” means a person designated for the purposes of section 127 of the Finance Act 1976 as a nominee of The Stock Exchange by an order made by the Secretary of State under subsection (5) of that section.

Stamp duty reserve tax: stock exchange nominees

176

• (1) The Treasury may by regulations provide that where —

• (a) circumstances would (apart from the regulations) give rise to two charges to stamp duty reserve tax,

• (b) the circumstances involve a stock exchange nominee, and

• (c) the circumstances are such as are prescribed,

such one of the charges as may be prescribed shall be treated as not arising.

• (2) The Treasury may by regulations provide that where —

• (a) circumstances would (apart from the regulations) give rise to a charge to stamp duty reserve tax and a charge to stamp duty,

• (b) the circumstances involve a stock exchange nominee, and

• (c) the circumstances are such as are prescribed,

the charge to stamp duty reserve tax shall be treated as not arising.

• (3) The Treasury may by regulations provide that a provision of an Act by virtue of which there is no charge to stamp duty reserve tax shall also apply in circumstances which involve a stock exchange nominee and are such as are prescribed.

• (4) The Treasury may by regulations provide that a provision of an Act by virtue of which the rate at which stamp duty reserve tax is charged is less than it would be apart from the provision shall also apply in circumstances which involve a stock exchange nominee and are such as are prescribed.

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

• (6) In this section —

• (a) “prescribed” means prescribed by the regulations, and

• (b) “stock exchange nominee” means a person designated for the purposes of section 127 of the Finance Act 1976 as a nominee of The Stock Exchange by an order made by the Secretary of State under subsection (5) of that section.

Stamp duty reserve tax: information.

177

— Regulations under section 98(1) of the Finance Act 1986 (administration etc. of stamp duty reserve tax) may include —

• (a) provision that notice which the regulations require to be given to the Commissioners of Inland Revenue shall be given in a manner or form specified by the Commissioners;

• (b) provision that information which the regulations require to be supplied to the Commissioners shall be supplied in a manner or form specified by the Commissioners.

Interest etc.

Setting of rates of interest.

178

• (1) The rate of interest applicable for the purposes of an enactment to which this section applies shall be the rate which for the purposes of that enactment is provided for by regulations made by the Treasury under this section.

• (2) This section applies to—

• (aa) section 15A of the Stamp Act 1891;

• (a) section 8(9) of the Finance Act 1894,

• (b) section 18 of the Finance Act 1896,

• (c) section 61(5) of the Finance (1909-10) Act 1910,

• (d) section 17(3) of the Law of Property Act 1925,

• (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (f) sections ... 86, 86A, 87, 87A, 88, 103A of the Taxes Management Act 1970,

• (g) paragraph 3 of Schedule 16A to the Finance Act 1973,

• (ga) section 48(1) of the Finance Act 1975,

• (gg) paragraph 6 of Schedule 1 to the Social Security Contributions and Benefits Act 1992,

• (gh) section 71(8A) of the Social Security Administration Act 1992, and section 69(8A) of the Social Security Administration (Northern Ireland) Act 1992, as they have effect in any case where the overpayment was made in respect of working families’ tax credit or disabled person’s tax credit;

• (h) paragraphs 15 and 16 of Schedule 2, and paragraph 8 of Schedule 5, to the Oil Taxation Act 1975,

• (i) section 283 of the Taxation of Chargeable Gains Act 1992;

• (j) paragraph 59 of Schedule 8 to the Development Land Tax Act 1976,

• (k) sections 233 , 235(1) and 236(3) and (4) of the Inheritance Tax Act 1984,

• (l) section 92 of the Finance Act 1986, and

• (m) sections . . . ... 824, 825 and 826 of, and paragraph 6B of Schedule 3 to and paragraph 3 of Schedule 19A to, the Taxes Act 1988. and

• (n) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . and

• (o) section 14(4) of the Ports Act 1991.

• (p) paragraph 8 of Schedule 4 to the Tax Credits Act 1999., ...

• (q) section 110 of the Finance Act 1999.

• (q) paragraph 8 of Schedule 1 to the Employment Act 2002.

• (r) paragraph 8 of Schedule I to the Employment (Northern Ireland) Order 2002., and

• (s) Chapter 7 of Part 3 of the Income Tax (Earnings and Pensions) Act 2003.

• (t) sections 87, 88 and 89 of the Finance Act 2003, ...

• (u) . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...

• (v) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (w) sections 67 and 68 of the Finance Act 2020.

• (x) paragraphs 33 and 33A of Schedule 14 to the Finance (No.2) Act 2023.

• (y) paragraphs 33 and 33A of Schedule 14 to the Finance (No.2) Act 2023, as applied in relation to domestic top-up tax by paragraph 4 of Schedule 18 to that Act.

• (3) Regulations under this section may—

• (a) make different provision for different enactments or for different purposes of the same enactment,

• (b) either themselves specify a rate of interest for the purposes of an enactment or make provision for any such rate to be determined by reference to such rate or the average of such rates as may be referred to in the regulations,

• (c) provide for rates to be reduced below, or increased above, what they otherwise would be by specified amounts or by reference to specified formulae,

• (d) provide for rates arrived at by reference to averages to be rounded up or down,

• (e) provide for circumstances in which alteration of a rate of interest is or is not to take place, and

• (f) provide that rates or alterations of rates are to have effect for periods beginning on or after a day determined in accordance with the regulations in relation to interest running from before that day as well as from or from after that day.

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

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

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

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

Provisions consequential on section 178.

179

• (1) The words “rate applicable under section 178 of the Finance Act 1989”shall be substituted—

• (a) for the words from “rate” to “annum” in—

• (i) section 18(1) of the Finance Act 1896,

• (ii) section 61(5) of the Finance (1909-10) Act 1910,

• (iii) section 17(3) of the Law of Property Act 1925,

• (iv) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (v) paragraphs 15(1) and 16 of Schedule 2, and paragraph 8(4) of Schedule 5,to the Oil Taxation Act 1975,

• (vi) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (vii) sections 824(1) and 825(2) of the Taxes Act 1988,

• (b) for the words“ prescribed rate” in—

• (i) sections 86(1), 86A(1), 87(1), 87A(1) ... and 88(1) of the Taxes Management Act 1970,

• (ii) paragraph 3(4) of Schedule 16A to the Finance Act1973, and

• (iii) paragraph 3(4) of Schedule 19A to the Taxes Act 1988,

• (c) for the words “rate which” onwards in—

• (i) paragraph 59(1) of Schedule 8 to the Development LandTax Act 1976, and

• (ii) section 826(1) of the Taxes Act 1988,

• (d) for the words “rate applicable under subsection (2) below” in section233(1) of the Inheritance Tax Act 1984,

• (e) for the words “rate for the time being applicable under section233(2)(b) above” in subsection (3), and the words “rate for the timebeing applicable under section 233(2)(a) above” in subsection (4), ofsection 236 of that Act,

• (f) for the words “appropriate rate” in section 92(2) of the Finance Act 1986, and

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

• (2) In section 8(9) of the Finance Act 1894, for thewords from “such interest” to “per cent.” there shall be substitutedthe words “interest at such rate not exceeding that applicable under section178 of the Finance Act 1989”.

• (3) In section 236(4) of the Inheritance Tax Act 1984, for the words “as ifsection 233(1)(b) above had applied” there shall be substituted the words “from the end of the period mentioned in section 233(1)(b) above”.

• (4) Any amendment made by subsection (1), (2) or (3) above shall have effect in relation to any period for which section 178(1) above has effect for thepurposes of the enactment concerned.

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

Repayment interest: period of accrual.

180

• (1) In section 48(1) of the Finance Act 1975, after thewords “carry interest” there shall be inserted the words “from the dateon which the sums were paid until the order for repayment is issued”.

• (2) In—

• (a) paragraph 16 of Schedule 2 to the Oil Taxation Act1975,

• (b) section 105(7) of the Finance Act 1980,

• (c) paragraph 13(4) and (5) of Schedule 16 to the FinanceAct 1981, and

• (d) paragraph 10(4) of Schedule 19 to the Finance Act1982,

for the word “repayment” there shall be substituted the words “theorder for repayment is issued”.

• (3) In paragraph 59(1) of Schedule 8 to the DevelopmentLand Tax Act 1976, after the word “later,” there shall be inserted thewords “until the order for repayment is issued”.

• (4) In section 235(1) of the Inheritance Tax Act 1984(and paragraph 19(3) of Schedule 4 to the Finance Act1975), after the word “made” there shall be inserted the words “untilthe order for repayment is issued”.

• (5) In section 92(2) of the Finance Act 1986, for thewords “the time it was paid” there shall be substituted the words “thedate on which the payment was made until the order for repayment isissued”.

• (6) In section 826(1) of the Taxes Act 1988, for the words “that repaymentor payment is made” there shall be substituted the words “the order forrepayment or payment is issued”.

• (7) The amendments made by this section shall be deemed always to have hadeffect.

Miscellaneous

Broadcasting: additional payments by programme contractors.

181

• (1) The Broadcasting Act 1981 shall have effect withrespect to additional payments payable by programme contractors under that Actsubject to the amendments made by Part I, and with the substitution, forSchedule 4 to that Act, of the provisions contained in Part II, of Schedule16 to this Act.

• (2) The transitional provisions made by Part III of that Schedule shall haveeffect.

• (3) This section shall come into force on 1st January 1990.

Disclosure of information.

182

• (1) A person who discloses any information which he holds or has held in the exercise of tax functions , tax credit functions , child trust fund functionsor social security functions is guilty of an offence if it is information about any matter relevant, for the purposes of any of those functions—

• (a) to tax or duty in the case of any identifiable person,

• (aa) to a tax credit in respect of any identifiable person,

• (ab) to a child trust fund of any identifiable person,

• (b) to contributions payable by or in respect of any identifiable person, or

• (c) to statutory sick pay , statutory maternity pay, statutory paternity pay, statutory adoption pay , statutory shared parental pay , statutory parental bereavement pay or statutory neonatal care pay in respect of any identifiable person.

• (2) In this section “tax functions” means functions relating to tax or duty—

• (a) of the Commissioners, the Board and their officers,

• (b) of any person carrying out the administrative work of the First-tier Tribunal or Upper Tribunal, and

• (c) of any other person providing, or employed in the provision of, services to any person mentioned in paragraph (a) or (b) above.

• (2ZA) In this section “tax credit functions” means the functions relating to tax credits—

• (a) of the Board,

• (b) of any person carrying out the administrative work of the the First-tier Tribunal or Upper Tribunal, and

• (c) of any other person providing, or employed in the provision of, services to the Board or to any person mentioned in paragraph (b) above.

• (2ZB) In this section “child trust fund functions” means the functions relating to child trust funds—

• (a) of the Board and their officers,

• (b) of any person carrying out the administrative work of the First-tier Tribunal or an appeal tribunal constituted under Chapter 1 of Part 2 of the Social Security (Northern Ireland) Order 1998, or

• (c) of any person providing, or employed in the provision of, services to the Board or any person mentioned in paragraph (b) above.

• (2A) In this section “social security functions” means—

• (a) the functions relating to contributions, child benefit, guardian’s allowance, statutory sick pay , statutory maternity pay, statutory paternity pay, statutory adoption pay , statutory shared parental pay , statutory parental bereavement pay or statutory neonatal care pay—

• (i) of the Board and their officers,

• (ii) of any person carrying out the administrative work of the the First-tier Tribunal or Upper Tribunal, and

• (iii) of any other person providing, or employed in the provision of, services to any person mentioned in sub-paragraph (i) or (ii) above, and

• (b) the functions under Part III of the Pension Schemes Act 1993 or Part III of the Pension Schemes (Northern Ireland) Act 1993 of the Board and their officers and any other person providing, or employed in the provision of, services to the Board or their officers.

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

• (4) A person who discloses any information which—

• (a) he holds or has held in the exercise of functions—

• (i) of the Comptroller Auditor General , of the National Audit Office and any member or employee of that Office or of any member of the staff of the National Audit Office that was established by section 3 of the National Audit Act 1983, . . .

• (ia) of the Comptroller and Auditor General for Northern Ireland and any member of the staff of the Northern Ireland Audit Office,

• (ii) of the Parliamentary Commissioner for Administration and his officers,

• (iii) of the Auditor General for Wales and any member of his staff, ...

• (iiia) of the Wales Audit Office and any member or employee of that Office,

• (iv) of the Public Services Ombudsman for Wales and any member of his staff, or

• (v) of the Scottish Public Services Ombudsman and any member of his staff,

• (b) is, or is derived from, information which was held by any person in the exercise of tax functions , tax credit functions , child trust fund functions or social security functions, and

• (c) is information about any matter relevant, for the purposes of tax functions , tax credit functions , child trust fund functions or social security functions—

• (i) to tax or duty in the case of any identifiable person,

• (ia) to a tax credit in respect of any identifiable person,

• (ib) to a child trust fund of any identifiable person,

• (ii) to contributions payable by or in respect of any identifiable person, or

• (iii) to child benefit, guardian’s allowance, statutory sick pay , statutory maternity pay, statutory paternity pay, statutory adoption pay , statutory shared parental pay , statutory parental bereavement pay or statutory neonatal care pay in respect of any identifiable person

is guilty of an offence.

• (5) Subsections (1) and (4) above do not apply to any disclosure of information—

• (a) with lawful authority,

• (b) with the consent of any person in whose case the information is about a matter relevant to tax or duty , to a tax credit or to a child trust fund or to contributions, statutory sick pay , statutory maternity pay, statutory paternity pay, statutory adoption pay , statutory shared parental pay , statutory parental bereavement pay or statutory neonatal care pay, or

• (c) which has been lawfully made available to the public before the disclosure is made.

• (6) For the purposes of this section a disclosure of any information is made with lawful authority if, and only if, it is made—

• (a) by a Crown servant in accordance with his official duty,

• (b) by any other person for the purposes of the function in the exercise of which he holds the information and without contravening any restriction dulyimposed by the person responsible,

• (c) to, or in accordance with an authorisation duly given by, the person responsible,

• (d) in pursuance of any enactment or of any order of a court, or

• (e) in connection with the institution of or otherwise for the purposes of any proceedings relating to any matter within the general responsibility of the Commissioners or, as the case requires, the Board,

and in this subsection “the person responsible” means the Commissioners, the Board, the Comptroller and Auditor General, the Comptroller and Auditor General for Northern Ireland , the Parliamentary Commissioner, the Auditor General for Wales , the Public Services Ombudsman for Wales or the Scottish Public Services Ombudsman, as the case requires.

• (7) It is a defence for a person charged with an offence under this section to prove that at the time of the alleged offence—

• (a) he believed that he had lawful authority to make the disclosure in question and had no reasonable cause to believe otherwise, or

• (b) he believed that the information in question had been lawfully made available to the public before the disclosure was made and had no reasonablecause to believe otherwise.

• (8) A person guilty of an offence under this section is liable—

• (a) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine or both, and

• (b) on summary conviction, to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum or both.

• (9) No prosecution for an offence under this section shall be instituted in England and Wales or in Northern Ireland except—

• (a) by the Commissioners or the Board, as the case requires, or

• (b) by or with the consent of the Director of Public Prosecutions or, in Northern Ireland, the Director of Public Prosecutions for Northern Ireland.

• (10) In this section—

• “the Board” means the Commissioners of Inland Revenue,

• “child trust fund” has the same meaning as in the Child Trust Funds Act 2004,

• “the Commissioners” means the Commissioners of Customs and Excise,

• “contributions” means contributions under Part I of the Social Security Contributions and Benefits Act 1992 or Part I of the Social Security Contributions and Benefits (Northern Ireland) Act 1992;

• “Crown servant” has the same meaning as in the Official Secrets Act 1989,

• “tax credit” means a tax credit under the Tax Credits Act 2002, and

• “tax or duty” means any tax or duty within the general responsibility of the Commissioners or the Board.

• (10A) In this section, in relation to the disclosure of information “identifiable person” means a person whose identity is specified in the disclosure or can be deduced from it.

• (11) In this section—

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

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

• (c) references to the Parliamentary Commissioner for Administration include the Health Service Commissioner for England... , ... the Assembly Ombudsman for Northern Ireland and the Northern Ireland Commissioner for Complaints.

• (11A) In this section, references to statutory paternity pay, statutory adoption pay , statutory shared parental pay , statutory parental bereavement pay or statutory neonatal care pay include statutory pay under Northern Ireland legislation corresponding to Part 12ZA , Part 12ZB , Part 12ZC , Part 12ZD or Part 12ZE of the Social Security Contributions and Benefits Act 1992 (c. 4).

• (12) This section shall come into force on the repeal of section 2 of the Official Secrets Act 1911.

Double taxation: disclosure of information.

182A

• (1) A person who discloses any information acquired by him in the exercise of his functions as a member of an advisory commission set up under the Arbitration Convention is guilty of an offence.

• (2) Subsection (1) above does not apply to any disclosure of information—

• (a) with the consent of the person who supplied the information to the commission, or

• (b) which has been lawfully made available to the public before the disclosure is made.

• (3) It is a defence for a person charged with an offence under this section to prove that at the time of the alleged offence he believed that the information in question had been lawfully made available to the public before the disclosure was made and had no reasonable cause to believe otherwise.

• (4) A person guilty of an offence under this section is liable—

• (a) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine or both;

• (b) on summary conviction, to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum or both.

• (5) No prosecution for an offence under this section shall be instituted in England and Wales or in Northern Ireland except—

• (a) by the Board, or

• (b) by or with the consent of the Director of Public Prosecutions or, in Northern Ireland, the Director of Public Prosecutions for Northern Ireland.

• (6) In this section—

• “the Arbitration Convention” has the meaning given by section 126 of the Taxation (International and Other Provisions) Act 2010;

• “the Board” means the Commissioners of Inland Revenue.

Government securities: redemption and transfer.

183

• (1) In section 47 of the Finance Act 1942 (power to makeregulations about transfer and registration of Government stock)—

• (a) the following paragraph shall be inserted after paragraph (b) ofsubsection (1)—

(bb) for the redemption of such stock and bonds;

and

• (b) the following subsection shall be inserted after that subsection—

(1A) Regulations under subsection (1) of this section may make provisionauthorising the Bank of England, in such circumstances and subject to suchconditions as may be prescribed in the regulations, to transfer stock andbonds standing in their books in the name of a deceased person into the nameof another person without requiring the production of probate, confirmationor letters of administration.

• (2) In section 3(1) of the National Debt Act 1972 (powerto make regulations about stock on the National Savings Stock Register) thefollowing paragraph shall be inserted after paragraph (b)—

(bb) the redemption of stock registered in the register,

.

• (3) After section 14 of the National Loans Act 1968 thereshall be inserted—

(14A) (1) Any securities of Her Majesty’s Government in the United Kingdom which arefor the time being held in the Issue Department of the Bank of England may beredeemed by the Treasury before maturity at market prices determined in suchmanner as may be agreed between the Treasury and the Bank. (2) Any expensess incurred by the Treasury in connection with the redemptionof securities under subsection (1) above shall be paid out of the NationalLoans Fund.

National savings accounts.

184

• (1) In section 2 of the National Savings Bank Act 1971(general power to make regulations) after subsection (1) there shall beinserted—

(1A) Regulations under this section may restrict the classes of persons who mayopen accounts with the National Savings Bank, but any such restriction shallnot apply to any account opened before the coming into force of theregulations imposing the restriction.

• (2) In section 5 of that Act (interest on ordinary deposits) in subsection (1)for the words from the beginning to “in any ordinary deposit account”there shall be substituted “The Director of Savings may, with the consentof the Treasury, from time to time determine the rate or rates at whichinterest is to be payable on amounts deposited in ordinary accounts or thatno interest is to be payable on such amounts, and any such determination inrelation to amounts deposited in any ordinary deposit account may be made”.

• (3) After subsection (1) of section 5 of that Act there shall beinserted—

(1A) The Director of Savings shall give notice in the London, Edinburgh andBelfast Gazettes of any determination under subsection (1) above; and any suchdetermination may affect deposits received at or before, as well as after, thetime the determination is made.

• (4) Subsection (5) of section 5 of that Act (rate of interest on ordinarydeposits to be not less than 2.5 per cent per annum) shall cease to haveeffect.

• (5) Subsections (2) and (3) above shall come into force on 1st October 1989.

Winding up of Redemption Annuities Account.

185

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

General

Interpretation etc.

186

• (1) In this Act “the Taxes Act 1970” means the Income and Corporation Taxes Act 1970 and “the Taxes Act1988” means the Income and Corporation Taxes Act1988.

• (2) Chapter II of Part I of this Act shall be construed as one with the Value Added Tax Act 1983.

• (3) Part II of this Act, so far as it relates to capital gains tax, shall beconstrued as one with the Capital Gains Tax Act 1979.

Repeals.

187

• (1) The enactments specified in Schedule 17 to this Act (which includeunnecessary enactments) are hereby repealed to the extent specified in thethird column of that Schedule, but subject to any provision at the end of anyPart of that Schedule.

• (2) The repeal of the enactments specified in Part XIV of Schedule 17 shallcome into force on such day as the Treasury may appoint by order made bystatutory instrument; and different days may be appointed for differentenactments.

Short title.

188

This Act may be cited as the Finance Act 1989.

SCHEDULE 1

Part I

Part II

SCHEDULE 2

1

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2

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

3

4

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SCHEDULE 3

Zero-rating

1

For Group 8 (construction of buildings etc.) of Schedule 5 (zero-rating)to the Value Added Tax Act 1983 there shall besubstituted—

Group 8—Construction of Dwellings, Etc. Item No. (1) The grant by a person constructing a building— (a) designed as a dwelling or number of dwellings; or (b) intended for use solely for a relevant residential purpose or a relevantcharitable purpose, of a major interest in, or in any part of, the building or its site. (2) The supply in the course of the construction of— (a) a building designed as a dwelling or number of dwellings or intended foruse solely for a relevant residential purpose or a relevant charitablepurpose; or (b) any civil engineering work necessary for the development of a permanentpark for residential caravans, of any services other than the services of an architect, surveyor or anyperson acting as consultant or in a supervisory capacity. (3) The supply to a person of— (a) materials; or (b) builders’ hardware, sanitary ware or other articles of a kind ordinarilyinstalled by builders as fixtures, by a supplier who also makes to the same person supplies within item 2 ofthis Group or Group 8A below of services which include the use of thematerials or the installation of the articles. (1) “Grant” includes assignment. (2) “Dwelling” includes a garage constructed at the same time asa dwelling for occupation together with it. (3) Use for a relevant residential purpose means use as— (a) a home or other institution providing residential accommodation forchildren; (b) a home or other institution providing residential accommodation withpersonal care for persons in need of personal care by reason of old age,disablement, past or present dependence on alcohol or drugs or past or presentmental disorder; (c) a hospice; (d) residential accommodation for students or school pupils; (e) residential accommodation for members of any of the armed forces; (f) a monastery, nunnery or similar establishment; or (g) an institution which is the sole or main residence of at least 90 percent. of its residents, except use as a hospital, a prison or similar institution or an hotel,inn or similar establishment. (4) Use for a relevant charitable purpose means use by a charity in either orboth of the following ways, namely— (a) otherwise than in the course or furtherance of a business; (b) as a village hall or similarly in providing social or recreationalfacilities for a local community. (5) Where part of a building is designed as a dwelling or number of dwellingsor intended for use solely for a relevant residential purpose or a relevantcharitable purpose (and part is not)— (a) a grant or other supply relating only to the part so designed or intendedfor such use (or its site) shall be treated as relating to a building sodesigned or intended for such use; (b) a grant or other supply relating only to the part neither so designed norintended for such use (or its site) shall not be so treated; and (c) in the case of any other grant or other supply relating to, or to any partof, the building (or its site), an apportionment shall be made to determinethe extent to which it is to be so treated. (6) Where all or part of a building is intended for use solely for a relevantresidential purpose or a relevant charitable purpose— (a) a supply relating to the building (or any part of it) shall not be takenfor the purposes of item 2 or 3 as relating to a building intended for suchuse unless it is made to a person who intends to use the building (or part)for such a purpose; and (b) a grant or other supply relating to the building (or any part of it) shallnot be taken as relating to a building intended for such use unless before itis made the person to whom it is made has given to the person making it acertificate in such form as may be specified in a notice published by theCommissioners stating that the grant or other supply (or a specified part ofit) so relates. (7) The grant of an interest in, or in part of, a building designed as adwelling or number of dwellings is not within item 1 if— (a) the interest granted is such that the grantee will not be entitled toreside in the building, or part, throughout the year; or (b) residence there throughout the year will be prevented by the terms of acovenant, statutory planning consent or similar permission. (8) Where the major interest referred to in item 1 is a tenancy orlease— (a) if a premium is payable, the grant falls within that item only to theextent that it is made for consideration in the form of the premium; and (b) if a premium is not payable, the grant falls within that item only to theextent that it is made for consideration in the form of the first payment ofrent due under the tenancy or lease. (9) The reference in item 2 to the construction of a building or work does notinclude a reference to— (a) the conversion, reconstruction, alteration or enlargement of an existingbuilding or work; or (b) any extension or annexation to an existing building which provides forinternal access to the existing building or of which the separate use, lettingor disposal is prevented by the terms of any covenant, statutory planningconsent or similar permission; and the reference in item 1 to a person constructing a building shall beconstrued accordingly. (10) A caravan is not a residential caravan if residence in it throughout theyear is prevented by the terms of a covenant, statutory planning consent orsimilar permission. (11) Item 2 does not include the supply of services described in paragraph 1(1)or 5(3) of Schedule 2 to this Act. (12) The goods referred to in item 3 do not include— (a) finished or prefabricated furniture, other than furniture designed to befitted in kitchens; (b) materials for the construction of fitted furniture, other than kitchenfurniture; (c) domestic electrical or gas appliances, other than those designed toprovide space heating or water heating or both; or (d) carpets or carpeting material. (13) Section 16(3) of this Act does not apply to goods forming part of adescription of supply in this Group.

2

• (1) Group 8A (protected buildings) of that Schedule shall be amended asfollows.

• (2) In item 1, for the word “granting” there shall be substituted theword “grant”.

• (3) In Note (1), for the words “a building which” there shall besubstituted the words “a building which is designed to remain as or becomea dwelling or number of dwellings or is intended for use solely for a relevantresidential purpose or a relevant charitable purpose after the reconstructionor alteration and which, in either case,”.

• (4) After that Note there shall be inserted—

(1A) Notes (1) to (8) to Group 8 above apply in relation to this Group as theyapply in relation to that Group.

• (5) Note (5) shall be omitted.

• (6) After Note (6) there shall be inserted—

(6A) For the purposes of item 2 the construction of a building separate from,but in the curtilage of, a protected building does not constitute analteration of the protected building.

• (7) The following Note shall be substituted for Note (7)—

(7) Item 2 does not include the supply of services described in paragraph 1(1)or 5(3) of Schedule 2 to this Act.

3

In Group 11 (caravans and houseboats) of that Schedule, for paragraph (b)of the Note there shall be substituted—

(b) the supply of accommodation in a caravan or houseboat.

Exemptions

4

• (1) For Group 1 (land) of Schedule 6 (exemptions) to the Value Added Tax Act 1983 there shall be substituted—

Group 1 – Land Item No. (1) The grant of any interest in or right over land or of any licence tooccupy land, other than— (a) the grant of the fee simple in— (i) a building which has not been completed and which is neither designed asa dwelling or number of dwellings nor intended for use solely for a relevantresidential purpose or a relevant charitable purpose; (ii) a new building which is neither designed as a dwelling or number ofdwellings nor intended for use solely for a relevant residential purpose ora relevant charitable purpose after the grant; (iii) a civil engineering work which has not been completed; (iv) a new civil engineering work; (b) the grant of any interest, right or licence consisting of a right to takegame or fish; (c) the provision in an hotel, inn, boarding house or similar establishmentof sleeping accommodation or of accommodation in rooms which are provided inconjunction with sleeping accommodation or for the purpose of a supply ofcatering; (d) the provision of holiday accommodation in a house, flat, caravan,houseboat or tent; (e) the provision of seasonal pitches for caravans, and the grant offacilities at caravan parks to persons for whom such pitches are provided; (f) the provision of pitches for tents or of camping facilities; (g) the grant of facilities for parking a vehicle; (h) the grant of any right to fell and remove standing timber; (i) the grant of facilities for housing, or storage of, an aircraft or formooring, or storage of, a ship, boat or other vessel; (j) the grant of any right to occupy a box, seat or other accommodation at asports ground, theatre, concert hall or other place of entertainment; and (k) the grant of facilities for playing any sport or participating in anyphysical recreation. (1) “Grant” includes an assignment, other than an assignment ofan interest made to the person to whom a surrender of the interest could bemade. (2) A building shall be taken to be completed when an architect issues acertificate of practical completion in relation to it or it is first fullyoccupied, whichever happens first; and a civil engineering work shall be takento be completed when an engineer issues a certificate of completion inrelation to it or it is first fully used, whichever happens first. (3) Notes (2) to (6) to Group 8 of Schedule 5 to this Act apply in relationto this Group as they apply in relation to that Group. (4) A building or civil engineering work is new if it was completed less thanthree years before the grant. (5) Subject to Note (6), the grant of the fee simple in a building or workcompleted before 1st April 1989 is not excluded from this Group by paragraph(a)(ii) or (iv). (6) Note (5) does not apply where the grant is the first grant of the feesimple made on or after 1st April 1989 and the building was not fullyoccupied, or the work not fully used, before that date. (7) Where a grant of an interest in, right over or licence to occupy landincludes a valuable right to take game or fish, an apportionment shall be madeto determine the supply falling outside this Group by virtue of paragraph (b). (8) “Similar establishment” includes premises in which there isprovided furnished sleeping accommodation, whether with or without theprovision of board or facilities for the preparation of food, which are usedby or held out as being suitable for use by visitors or travellers. (9) “Houseboat” includes a houseboat within the meaning of Group11 of Schedule 5 to this Act. (10) “Holiday accommodation” includes any accommodation advertisedor held out as such. (11) A seasonal pitch is a pitch— (a) which is provided for a period of less than a year; or (b) which is provided for a year or a period longer than a year but which theperson to whom it is provided is prevented by the terms of any covenant,statutory planning consent or similar permission from occupying by living ina caravan at all times throughout the period for which the pitch is provided. (12) “Mooring” includes anchoring or berthing. (13) Paragraph (k) shall not apply where the grant of the facilities isfor— (a) a continuous period of use exceeding twenty-four hours; or (b) a series of ten or more periods, whether or not exceeding twenty-fourhours in total, where the following conditions are satisfied— (i) each period is in respect of the same activity carried on at the sameplace; (ii) the interval between each period is not less than one day and not morethan fourteen days; (iii) consideration is payable by reference to the whole series and is evidencedby written agreement; (iv) the grantee has exclusive use of the facilities; and (v) the grantee is a school, a club, an association or an organisationrepresenting affiliated clubs or constituent associations.

• (2) In consequence of the amendment made by sub-paragraph (1) above, inparagraph 9(1) of Schedule 4 to the Value Added Tax Act1983 for “(a)” there shall be substituted “(c)”.

Other provisions

5

The following section shall be substituted for section 21 (refund of taxto person constructing dwelling) of the Value Added Tax Act 1983—

(21) (1) Subject to subsection (2) below, where tax is chargeable on the supply ofgoods to, or the importation of goods by, a person constructing a buildinglawfully and otherwise than in the course or furtherance of any business,and— (a) the goods are incorporated in the building or its site; and (b) the supply of the goods would have been zero-rated by virtue of item 3 ofGroup 8 of Schedule 5 to this Act if they had been supplied by a suppliermaking to the same person supplies within item 2 of that Group of servicesincluding their use or installation, and any required certificate had beengiven, the Commissioners shall, on a claim made in that behalf, refund to theperson the amount of the tax so chargeable. (2) The Commissioners shall not be required to entertain a claim for a refundof tax under this section unless the claim— (a) is made within such time and in such form and manner; (b) contains such information; and (c) is accompanied by such documents, whether by way of evidence or otherwise, as the Commissioners may by regulations prescribe.

6

• (1) The following section shall be inserted in the ValueAdded Tax Act 1983 after section 35—

(35A) (1) Schedule 6A to this Act shall have effect with respect to buildings andland. (2) The Treasury may by order amend Schedule 6A to this Act.

• (2) The following Schedule shall be inserted in the Value Added Tax Act 1983after Schedule 6—