Broadcasting Act 1996

• (1) If it appears to the OFCOM that there are grounds for suspecting that any person who is an applicant for a licence under Part 1 or 3 of the 1990 Act or Part 1 or 2 of this Act, is by virtue of any of the provisions specified in subsection (5) a disqualified person in relation to that licence, OFCOM shall be regarded as failing to discharge their duty under section 5(1) or 88(1) of the 1990 Act or section 5(1) or 44(1) of this Act , if they grant the licence to that person without being provided with information which satisfies them that he is not on those grounds a disqualified person by virtue of that provision.

• (2) If it appears to OFCOM that there are grounds for suspecting that any person who is the holder of a licence under Part 1 or 3 of the 1990 Act or Part 1 or 2 of this Act, is by virtue of any of the provisions specified in subsection (5) a disqualified person in relation to that licence, OFCOM shall be regarded as failing to discharge their duty under section 5(1) or 88(1) of the 1990 Act or section 5(1) or 44(1) of this Act , unless—

• (a) they require him to provide them with information for the purpose of determining whether he is on those grounds a disqualified person by virtue of that provision, and

• (b) if they are satisfied that he is a disqualified person, they revoke the licence.

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

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

• (5) The provisions referred to in subsections (1) and (2) are the following provisions of paragraph 1(1) of Part II of Schedule 2 to the 1990 Act—

• (a) paragraphs (d) to (g),

• (b) paragraph (h) so far as relating to participation by bodies falling within paragraph (d), (e) or (g),

• (c) paragraph (hh) so far as relating to a body corporate controlled by a body corporate in which a body falling within paragraph (d), (e) or (g) is a participant with more than a 5 per cent. interest,

• (d) paragraph (i) so far as relating to control by a person falling within any of paragraphs (d) to (g) or by two or more such persons, and

• (e) paragraph (j) so far as relating to participation by a body corporate which is controlled by a person falling within any of paragraphs (d) to (g) or by two or more such persons.

• (6) Nothing in subsections (1) to (5) shall be taken to limit the generality of the duties imposed on OFCOM by sections 5(1) and 88(1) of the 1990 Act and sections 5(1) and 44(1) of this Act.

Provision of false information, etc.

Offence of providing false information in certain circumstances

144

• (1) A person who, in connection with an application by him for, or his continued holding of, a licence under the 1990 Act or this Act—

• (a) makes a statement to OFCOM which he knows to be false in a material particular, or

• (b) recklessly makes a statement to OFCOM which is false in a material particular,

is guilty of an offence if the statement relates to a matter which would be relevant in determining whether he is by virtue of any of the provisions specified in subsection (3) a disqualified person, and he is by virtue of any of those provisions a disqualified person in relation to that licence.

• (2) A person who, in connection with an application by him for, or his continued holding of, a licence under the 1990 Act or this Act, withholds any information with the intention of causing OFCOM to be misled is guilty of an offence if—

• (a) the information would be relevant in determining whether he is by virtue of any of the provisions specified in subsection (3) a disqualified person, and

• (b) he is by virtue of any of those provisions a disqualified person in relation to that licence.

• (3) The provisions referred to in subsections (1) and (2) are the following provisions of paragraph 1(1) of Part II of Schedule 2 to the 1990 Act—

• (a) paragraphs (d) to (g),

• (b) paragraph (h) so far as relating to participation by bodies falling within paragraph (d), (e) or (g),

• (c) paragraph (hh) so far as relating to a body corporate controlled by a body corporate in which a body falling within paragraph (d), (e) or (g) is a participant with more than a 5 per cent. interest,

• (d) paragraph (i) so far as relating to control by a person falling within any of paragraphs (d) to (g) or by two or more such persons, and

• (e) paragraph (j) so far as relating to participation by a body corporate which is controlled by a person falling within any of paragraphs (d) to (g) or by two or more such persons.

• (4) A person guilty of an offence under this section is liable on summary conviction to imprisonment for a term not exceeding three months or to a fine not exceeding level 5 on the standard scale or to both.

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

Disqualification for offence of supplying false information, etc

145

• (1) Where a person is convicted of an offence under section 144 the court by which he is convicted may make an order (in this section referred to as a “disqualification order”) disqualifying him from holding a licence during a period specified in the order.

• (2) The period specified in a disqualification order shall not exceed five years beginning with the date on which the order takes effect.

• (3) Where an individual is disqualified from holding a licence by virtue of a disqualification order, any body corporate—

• (a) of which he is a director, or

• (b) in the management of which he is directly or indirectly concerned,

is also disqualified from holding a licence.

• (4) Where the holder of a licence is disqualified by virtue of a disqualification order, the licence shall be treated as being revoked with effect from the time when the order takes effect.

• (5) For the purposes of any of the provisions specified in subsection (6) (which relate to the imposition of a financial penalty on the revocation of a licence), a licence which is revoked by virtue of subsection (4) shall be taken to have been revoked by OFCOM as mentioned in that provision.

• (6) The provisions referred to in subsection (5) are as follows—

• (a) section 18(3) of the 1990 Act,

• (b) section 101(3) of the 1990 Act,

• (c) section 11(5), and

• (d) section 53(5).

• (7) In sections 5(1)(a) and (2)(db)... and 88(1)(a) and (2)(db) of the 1990 Act and sections 5(1)(a) and (2)(db) and 44(1)(a) and (2)(db) of this Act, the reference to a person who is a disqualified person by virtue of Part II of Schedule 2 to the 1990 Act includes a reference to a person who is disqualified by virtue of a disqualification order.

• (8) In this section—

• “licence” means a licence under Part 1 or 3 of the 1990 Act or under Part 1 or 2 of this Act;

• ...

Supplementary provisions as to disqualification orders

146

• (1) A person disqualified by a disqualification order may appeal against the order in the same manner as against a conviction.

• (2) A disqualification order made by a court in England and Wales or Northern Ireland—

• (a) shall not take effect until the end of the period within which the person on whose conviction the order was made can appeal against the order, and

• (b) if he so appeals, shall not take effect until the appeal has been determined or abandoned.

• (3) A disqualification order made by a court in Scotland—

• (a) shall not take effect until the end of the period within which the person on whose conviction the order was made can appeal against the order, and

• (b) if an appeal against the order or the conviction is taken within that period, shall not take effect until the date when that appeal is determined or abandoned or deemed to have been abandoned.

• (4) In this section “disqualification order” means an order under section 145.

General

General interpretation

147

• (1) In this Act—

• “the 1990 Act” means the Broadcasting Act 1990;

• “the BBC” means the British Broadcasting Corporation.

• “OFCOM” means the Office of Communications;

• (2) The 1990 Act and the following provisions of this Act—

• (a) Parts I and II and Schedule 1,

• (b) Part IV,

• (c) Part V and Schedules 3 and 4, and

• (d) sections 142 to 146,

shall be construed as if those provisions were contained in that Act.

Minor and consequential amendments, repeals and revocations

148

• (1) Schedule 10 (which makes minor and consequential amendments) shall have effect.

• (2) The enactments and instruments mentioned in Schedule 11 are hereby repealed or, as the case may be, revoked to the extent specified in the third column of that Schedule.

Commencement and transitional provisions

149

• (1) The following provisions of this Act—

• (a) paragraphs 7 to 9 of Schedule 2 so far as relating to BBC companies (as defined by section 202(1) of the 1990 Act), and section 73 so far as relating to those paragraphs in their application to such companies,

• (b) sections 74 to 78,

• (c) section 80,

• (d) section 83,

• (e) sections 88, 90 and 92,

• (f) Part VI (and Schedules 5 to 8),

• (g) section 147(1),

• (h) paragraphs 15 and 19 of Schedule 10 so far as relating to BBC companies (as defined by section 202(1) of the 1990 Act), and section 148(1) so far as relating to those paragraphs in their application to such companies,

• (i) the entries in Schedule 11 relating to sections 32(9), 45(8) and (9) and 47(11) and (12) of the 1990 Act, and section 148(2) so far as relating to those entries, and

• (j) this section and section 150,

shall come into force on the passing of this Act.

• (2) The other provisions of this Act shall come into force on such day as the Secretary of State may by order made by statutory instrument appoint; and different days may be appointed for different purposes.

• (3) The power to make an order under this section includes power to make such transitional provisions and savings as the Secretary of State considers appropriate.

Short title and extent

150

• (1) This Act may be cited as the Broadcasting Act 1996.

• (2) This Act, except paragraph 27 of Schedule 10, extends to Northern Ireland.

• (3) Section 204(6) of the 1990 Act (power to extend to Isle of Man and Channel Islands) applies to the provisions of this Act amending that Act.

• (4) Her Majesty may by Order in Council direct that any of the other provisions of this Act shall extend to the Isle of Man or any of the Channel Islands with such modifications, if any, as appear to Her Majesty to be appropriate.

SCHEDULE 1

Part I — Multiplex revenue for purposes of Part I of this Act

Computation of multiplex revenue

1

• (1) It shall be the duty of OFCOM to draw up, and from time to time review, a statement setting out the principles to be followed in ascertaining—

• (a) the multiplex revenue in relation to a licence holder for the purposes of section 14 for any accounting period, and

• (b) the share of multiplex revenue attributable to a person in relation to any multiplex service for the purposes of any provision of Part I of this Act—

• (i) for any accounting period of the holder of the multiplex licence, or

• (ii) for any year.

• (2) A statement under this paragraph may set out different principles for persons holding different kinds of licences.

• (3) Before drawing up or revising a statement under this paragraph OFCOM shall consult the Secretary of State and the Treasury.

• (4) OFCOM shall—

• (a) publish the statement drawn up under this paragraph and every revision of that statement; and

• (b) transmit a copy of that statement, and every revision of it, to the Secretary of State;

and the Secretary of State shall lay copies of the statement and of every such revision before each House of Parliament.

Disputes

2

• (1) For the purposes of any provision of Part I of this Act—

• (a) the amount of the multiplex revenue in relation to any holder of a multiplex licence for any accounting period of his, or (as the case may be) for any year, or

• (b) the amount of any payment to be made to OFCOM by any person in respect of any such revenue, or of an instalment of any such payment,

shall, in the event of a disagreement between OFCOM and that person, be the amount determined by OFCOM .

• (2) For the purposes of any provision of Part I of this Act the share of multiplex revenue attributable to any person in relation to a multiplex service for any accounting period or (as the case may be) for any year shall, in the event of a disagreement between OFCOM and that person, be the amount determined by OFCOM .

• (3) No determination of OFCOM under this paragraph shall be called in question in any court of law, or be the subject of any arbitration; but nothing in this sub-paragraph shall prevent the bringing of proceedings for judicial review.

Part II — Multiplex revenue for purposes of Part II of this Act

Computation of multiplex revenue

3

• (1) It shall be the duty of OFCOM to draw up, and from time to time review, a statement setting out the principles to be followed in ascertaining—

• (a) the multiplex revenue in relation to a licence holder for the purposes of section 56 for any accounting period, and

• (b) the share of multiplex revenue attributable to a person in relation to any national radio multiplex service for the purposes of any provision of Part II of this Act—

• (i) for any accounting period of the holder of the national radio multiplex licence, or

• (ii) for any year.

• (2) A statement under this paragraph may set out different principles for persons holding different kinds of licences.

• (3) Before drawing up or revising a statement under this paragraph OFCOM shall consult the Secretary of State and the Treasury.

• (4) OFCOM shall—

• (a) publish the statement drawn up under this paragraph and every revision of that statement; and

• (b) transmit a copy of that statement, and every revision of it, to the Secretary of State;

and the Secretary of State shall lay copies of the statement and of every such revision before each House of Parliament.

Disputes

4

• (1) For the purposes of any provision of Part II of this Act—

• (a) the amount of the multiplex revenue in relation to any holder of a national radio multiplex licence for any accounting period of his, or (as the case may be) for any year, or

• (b) the amount of any payment to be made to OFCOM by any person in respect of any such revenue, or of an instalment of any such payment,

shall, in the event of a disagreement between OFCOM and that person, be the amount determined by OFCOM .

• (2) For the purposes of any provision of Part II of this Act the share of multiplex revenue attributable to any person in relation to any national radio multiplex service for any accounting period or (as the case may be) for any year shall, in the event of a disagreement between OFCOM and that person, be the amount determined by OFCOM .

• (3) No determination of OFCOM under this paragraph shall be called in question in any court of law, or be the subject of any arbitration; but nothing in this sub-paragraph shall prevent the bringing of proceedings for judicial review.

SCHEDULE 2

Part I — Amendments of Part I of Schedule 2

1

• (1) In Part I of Schedule 2, paragraph 1 (which contains interpretative provisions) is amended as follows.

• (2) In sub-paragraph (1)—

• (a) before the definition of “advertising agency” there is inserted—

“the 1996 Act” means the Broadcasting Act 1996;

,

• (b) for paragraph (a) of the definition of “associate” there is substituted—

1. in relation to a body corporate, shall be construed in accordance with paragraph (1A), and

,

• (c) in paragraph (b) of the definition of “control” for “by virtue of the rules regulating that or any other body” there is substituted “ by whatever means and whether directly or indirectly ”,

• (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

• (f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) After sub-paragraph (1) there is inserted—

(1A) For the purpose of determining the persons who are the associates of a body corporate for the purposes of this Schedule— (a) an individual shall be regarded as an associate of a body corporate if he is a director of that body corporate, and (b) a body corporate and another body corporate shall be regarded as associates of each other if one controls the other or if the same person controls both.

• (4) For sub-paragraph (3) there is substituted—

(3) For the purposes of this Schedule a person controls a body corporate if— (a) he holds, or is beneficially entitled to, more than 50 per cent. of the equity share capital in the body, or possesses more than 50 per cent. of the voting power in it, or (b) although he does not have such an interest in the body, it is reasonable, having regard to all the circumstances, to expect that he will be able, by whatever means and whether directly or indirectly, to achieve the result that the affairs of the body are conducted in accordance with his wishes; or (c) he holds, or is beneficially entitled to, 50 per cent. of the equity share capital in that body, or possesses 50 per cent. of the voting power in it, and an arrangement exists between him and any other participant in the body as to the manner in which any voting power in the body possessed by either of them is to be exercised, or as to the omission by either of them to exercise such voting power. (3A) For the purposes of sub-paragraph (3)(c)— (a) “arrangement” includes any agreement or arrangement, whether or not it is, or is intended to be, legally enforceable, and (b) a person shall be treated— (i) as holding, or being beneficially entitled to, any equity share capital which is held by a body corporate which he controls or to which such a body corporate is beneficially entitled, and (ii) as possessing any voting power possessed by such a body corporate.

• (5) Sub-paragraph (4) is omitted.

• (6) For sub-paragraph (6) there is substituted—

(6) In this Schedule any reference to a participant with more than a 20 per cent. interest in a body corporate is a reference to a person who— (a) holds or is beneficially entitled to more than 20 per cent. of the shares in that body, or (b) possesses more than 20 per cent. of the voting power in that body. (7) Sub-paragraph (6) shall have effect subject to the necessary modifications in relation to other references in this Schedule— (a) to an interest of more than a specified percentage in a body corporate, or (b) to an interest of a specified percentage or more in a body corporate. (8) Any reference in this Schedule to a person who is over a particular age is a reference to a person who has attained that age.

2

• (1) Paragraph 2 of Part I of Schedule 2 is amended as follows.

• (2) At the beginning of sub-paragraph (1) there is inserted “ Subject to sub-paragraph (1A) ”.

• (3) After sub-paragraph (1) there is inserted—

(1A) For the purposes of this Schedule, a person’s holding of shares, or possession of voting power, in a body corporate shall be disregarded if, or to the extent that— (a) he holds the shares concerned— (i) as a nominee, (ii) as a custodian (whether under a trust or by a contract), or (iii) under an arrangement pursuant to which he has issued, or is to issue, depositary receipts, as defined by section 220(1) of the Companies Act 1985, in respect of the shares concerned, and (b) he is not entitled to exercise or control the exercise of voting rights in respect of the shares concerned. (1B) For the purposes of sub-paragraph (1A)(b)— (a) a person is not entitled to exercise or control the exercise of voting rights in respect of shares if he is bound (whether by contract or otherwise) not to exercise the voting rights, or not to exercise them otherwise than in accordance with the instructions of another, and (b) voting rights which a person is entitled to exercise or of which he is entitled to control the exercise only in certain circumstances shall be taken into account only when those circumstances have arisen and for as long as they continue to obtain.

3

For paragraph 3 of Part I of Schedule 2 there is substituted—

(3) For the purposes of this Schedule the following persons shall be treated as connected with a particular person— (a) a person who controls that person, (b) an associate of that person or of a person falling within paragraph (a), and (c) a body which is controlled by that person or by an associate of that person.

4

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

5

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

Part II — Amendments of Part II of Schedule 2

6

• (1) In Part II of Schedule 2, paragraph 1 (general disqualification of non-EEA nationals and bodies having political connections) is amended as follows.

• (2) In sub-paragraph (1), after paragraph (h) there is inserted—

(hh) a body corporate which is controlled by a body corporate falling within paragraph (h);

.

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

7

In paragraph 3 of Part II of Schedule 2 (disqualification of publicly-funded bodies for radio service licences), in sub-paragraph (1)(a) for “(other than a local authority)” there is substituted “ (other than a local authority, the Welsh Authority or the BBC) ”.

8

In paragraph 5 of Part II of Schedule 2 (general disqualification of broadcasting bodies), paragraphs (c) and (d) are omitted.

9

After paragraph 5 of Part II of Schedule 2 there is inserted—

(5A) (1) A BBC company, a Channel 4 company or an S4C company is a disqualified person in relation to— (a) any licence granted by the Commission to provide regional or national Channel 3 services or Channel 5, and (b) any licence granted by the Commission to provide a local delivery service. (2) A BBC company is also a disqualified person in relation to any licence granted by the Authority to provide a national, local or restricted service within the meaning of Part III of this Act. (3) The Secretary of State may by order provide that sub-paragraph (1)(b) shall not have effect in relation to any local delivery service of a description specified in the order.

Part III — Provisions substituted for Part III of Schedule 2

10

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

Part IV — Provisions substituted for Part IV of Schedule 2

11

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

Part V — Amendments of other provisions of 1990 Act

12

• (1) Section 5 of the 1990 Act (restrictions on the holding of licences) is amended as follows.

• (2) For subsection (6) there is substituted—

(6) The Commission shall not serve any such notice on the licence holder unless— (a) the Commission have notified him of the matters complained of and given him a reasonable opportunity of making representations to them about those matters, and (b) in a case where the relevant change is one falling within subsection (6A)— (i) they have also given him an opportunity of complying with Parts III and IV of Schedule 2 within a period specified in the notification, and (ii) the period specified in the notification has elapsed. (6A) A relevant change falls within this subsection if it consists only in one or more of the following— (a) a change in the percentage of total audience time attributable to one or more services for the purposes of paragraph 2 of Part III of Schedule 2; (b) a change in the national market share (within the meaning of Part IV of that Schedule) of one or more national newspapers (within the meaning of that Part of that Schedule); (c) a change in the local market share (within the meaning of that Part of that Schedule) in a particular area of one or more local newspapers (within the meaning of that Part of that Schedule). (6B) Where a licence has been granted in a case where the Commission could have made a determination under paragraph 9(1) or 10(1) of Part IV of Schedule 2 (if satisfied that the fact mentioned in that provision could have been expected to operate against the public interest), subsection (5) does not enable the licence to be revoked merely because a change is such that the Commission would have made such a determination in the new circumstances of the case.

• (3) In subsection (7)—

• (a) after paragraph (b) there is inserted—

or (c) any other change giving rise to a failure to comply with any requirement imposed by or under Schedule 2,

, and

• (b) for “(in either case)” there is substituted “ (in any case) ”.

13

• (1) Section 88 of the 1990 Act (restrictions on the holding of licences) is amended as follows.

• (2) For subsection (6) there is substituted—

(6) The Authority shall not serve any such notice on the licence holder unless— (a) the Authority have notified him of the matters complained of and given him a reasonable opportunity of making representations to them about those matters, and (b) in a case where the relevant change is one falling within subsection (6A)— (i) they have also given him an opportunity of complying with Parts III and IV of Schedule 2 within a period specified in the notification, and (ii) the period specified in the notification has elapsed. (6A) A relevant change falls within this subsection if it consists only in one or more of the following— (a) a reduction in the total number of points, calculated in accordance with paragraph 9 of Part III of Schedule 2, attributable to all the services referred to in paragraph 8(1) or (2)(a) or (b) of that Part of that Schedule; (b) a change in the national market share (within the meaning of Part IV of that Schedule) of one or more national newspapers (within the meaning of that Part of that Schedule); (c) a change in the local market share (within the meaning of that Part of that Schedule) in a particular area of one or more local newspapers (within the meaning of that Part of that Schedule). (6B) Where a licence has been granted in a case where the Authority could have made a determination under paragraph 9(1) or 10(1) of Part IV of Schedule 2 (if satisfied that the fact mentioned in that provision could have been expected to operate against the public interest), subsection (5) does not enable the licence to be revoked merely because a change is such that the Authority would have made such a determination in the new circumstances of the case.

• (3) In subsection (7)—

• (a) after paragraph (b) there is inserted—

or (c) any other change giving rise to a failure to comply with any requirement imposed by or under Schedule 2,

, and

• (b) for “(in either case)” there is substituted “ (in any case) ”.

SCHEDULE 3

Interpretation

1

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

Status and capacity

2

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

Appointment of members

3

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

Tenure of office

4

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

Remuneration and pensions of members

5

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

Disqualification of members of BSC for House of Commons and Northern Ireland Assembly

6

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

Proceedings

7

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

8

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

9

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

Employees of the BSC

10

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

Financial provisions

11

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

Authentication of seal of BSC

12

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

Presumption of authenticity of documents issued by BSC

13

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

Accounts and audit

14

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

SCHEDULE 4

Meaning of “the existing boards”

1

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

Provisions as to vesting of property et ceteralaetc. of existing boards

2

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

3

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

Pensions

4

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

Final accounts and annual report of existing bodies

5

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

6

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

7

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

Final contributions towards cost of Broadcasting Complaints Commission

8

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

SCHEDULE 5

Contents and effect of scheme

1

• (1) A transfer scheme may define the property, rights and liabilities to be transferred to a particular person—

• (a) by specifying or describing the property, rights and liabilities in question,

• (b) by referring to all (or all but so much as may be excepted) of the property, rights and liabilities comprised in a specified part of the BBC’s undertaking, or

• (c) partly in one way and partly in the other.

• (2) A transfer scheme shall appoint the day on which it is to come into force.

• (3) This Act shall have effect, in relation to any provision of a transfer scheme for the transfer of any property, rights or liabilities, so as to transfer the property, rights or liabilities, at the beginning of the day appointed for the coming into force of the scheme, and without further assurance, from the BBC to the person to whom they are allocated under the scheme and to vest them in that person; and the provisions of that scheme in relation to that transfer shall have effect from that time accordingly.

• (4) This Act shall have effect, in relation to any provision of a transfer scheme for the creation, by virtue of paragraph 2, of any interest or right, so as to create the specified interests and rights, at the beginning of the day appointed for the coming into force of the scheme and without further assurance.

• (5) The preceding provisions of this paragraph shall have effect subject to so much of a transfer scheme as provides for—

• (a) the transfer of any of the property, rights or liabilities to be transferred in accordance with the scheme, or

• (b) the creation of any of the rights or interests to be created in accordance with the scheme,

to be effected by or under any agreement or instrument entered into or executed in pursuance of an obligation imposed by virtue of paragraph 2(1)(g).

• (6) In their application to Scotland, sub-paragraphs (3) and (4) shall have effect with the omission of the words “and without further assurance”.

Division of BBC’s undertaking by scheme

2

• (1) For the purposes of making any such division as the BBC consider appropriate of any of the property, rights and liabilities of the BBC between two or more persons (including any division between the BBC and any one or more other persons), a transfer scheme may contain provision—

• (a) for the creation in favour of the BBC of an interest or right in or in relation to property transferred in accordance with that scheme to any person,

• (b) for the creation, in favour of a person to whom any transfer is made, of an interest or right in or in relation to property so transferred to another,

• (c) for giving effect to a transfer to any person by the creation, in favour of that person, of an interest or right in or in relation to property retained by the BBC,

• (d) for rights and liabilities to be transferred so as to be enforceable by or against more than one transferee or by or against both one or more transferees and the BBC,

• (e) for rights and liabilities enforceable by or against more than one person in accordance with any provision falling within paragraph (d) to be enforceable in different or modified respects by or against each or any of them,

• (f) for the creation of new rights and liabilities as between different transferees and as between any transferee and the BBC, and

• (g) without prejudice to paragraph (f), for imposing on any transferee or the BBC an obligation—

• (i) to enter into such written agreements with any other person on whom any corresponding obligation is, could be or has been imposed by virtue of this paragraph of this Schedule (whether in the same or a different scheme), or

• (ii) to execute such instruments in favour of any such person,

as may be specified or described in the scheme.

• (2) A transfer scheme may contain such supplemental and incidental provision with respect to the interests, rights and liabilities of third parties in relation to anything to which the scheme relates as the BBC consider to be necessary or expedient for the purposes of any such division as is mentioned in sub-paragraph (1), or in connection with anything contained in the scheme by virtue of that sub-paragraph.

• (3) The provision that may be contained in a transfer scheme by virtue of sub-paragraph (2) shall include provision for interests, rights or liabilities to which any third party is entitled or subject in relation to anything to which the scheme relates to be modified in such respects or in such manner as may be specified or determined under the scheme.

• (4) An obligation imposed on any person by virtue of sub-paragraph (1)(g) shall be enforceable by the bringing, by any person with or in favour of whom the agreement or instrument is to be entered into or executed, of civil proceedings for an injunction or for interdict or for other appropriate relief.

• (5) In this paragraph—

• (a) references, in relation to a transfer scheme, to a transferee include references to any person in whose favour any interest or right is created in accordance with the scheme, and

• (b) the reference, in relation to such a scheme, to a third party is a reference to a person other than—

• (i) the BBC, or

• (ii) any person who (apart from any provision made by virtue of sub-paragraph (1)(e) or (2)) is a transferee.

• (6) Sub-paragraphs (2) and (3) shall be without prejudice to the generality of paragraph 4(1).

Property to which a scheme may relate

3

• (1) The property, rights and liabilities that shall be capable of being transferred in accordance with a transfer scheme shall include—

• (a) property, rights and liabilities that would not otherwise be capable of being transferred or assigned by the BBC,

• (b) rights and liabilities of the BBC under any agreement or arrangement for the payment of pensions, allowances and gratuities,

• (c) property acquired at a time after the making of the scheme and before it comes into force, and rights and liabilities which arise or may arise in respect of anything occurring after the making of the scheme,

• (d) property situated anywhere in the United Kingdom or elsewhere and rights and liabilities under the law of any part of the United Kingdom or of any country or territory outside the United Kingdom, and

• (e) rights and liabilities under enactments.

• (2) The transfers authorised by sub-paragraph (1)(a), and the interests and rights that may be created in accordance with a transfer scheme, include transfers, interests and rights which are to take effect as if there were—

• (a) no such requirement to obtain any person’s consent or concurrence,

• (b) no such liability in respect of a contravention of any other requirement, and

• (c) no such interference with any interest or right,

as there would be, in the case of any transaction apart from this Act, by reason of provisions having effect (whether under any enactment or agreement or otherwise) in relation to the terms on which the BBC are entitled or subject to any property, right or liability.

• (3) Where apart from this sub-paragraph any person would have an entitlement, in consequence of anything done or likely to be done by or under this Act, to terminate, modify, acquire or claim an interest or right which is vested in the BBC at the passing of this Act or acquired by the BBC after that time, or to treat any such interest or right as modified or terminated, then—

• (a) for the purposes of the transfer of the interest or right in accordance with a transfer scheme, that entitlement shall not be enforceable in relation to that interest or right until after its transfer in accordance with such a scheme, and

• (b) without prejudice to the preceding provisions of this paragraph or to paragraph 4(2)(a), that entitlement shall be enforceable in relation to the interest or right after its transfer only in so far as the scheme contains provision for it to be transferred subject to the provisions conferring that entitlement.

• (4) Subject to sub-paragraphs (5) and (6), nothing in sub-paragraph (1) or (2) shall enable—

• (a) any agreement or instrument entered into or executed in pursuance of an obligation imposed by virtue of paragraph 2(1)(g), or

• (b) anything done under any such agreement,

to give effect to any transfer, or to create any interest or right, which could not apart from this paragraph have been made by or under that agreement or instrument.

• (5) A transfer scheme may provide for—

• (a) the transfers to which effect is to be given by or under any agreement or instrument entered into or executed in accordance with the scheme, or

• (b) the interests or rights that are to be created by or under any such agreement or instrument,

to include, to such extent as may be specified in the scheme, any such transfer, interest or right as is mentioned in sub-paragraph (2).

• (6) A transfer scheme may provide that sub-paragraph (3) shall apply in relation to the provisions of any agreement or instrument which is to be entered into or executed in accordance with the scheme, and in relation to any proposal for such an agreement or for the execution of such an instrument, as if the reference in sub-paragraph (3)(b) to provision contained in the scheme included a reference to provision contained, in accordance with the scheme, in the agreement or instrument.

Supplemental provisions of schemes

4

• (1) A transfer scheme may contain supplemental, incidental, consequential and transitional provision for the purposes of, or in connection with, any transfer of property, rights or liabilities for which the scheme provides or in connection with any other provisions contained in the scheme; and any such provision may include different provision for different cases or different purposes.

• (2) A transfer scheme may, in relation to transfers in accordance with the scheme, make provision, either generally or for such purposes as may be specified in the scheme—

• (a) for the transferee to be treated as the same person in law as the BBC,

• (b) for agreements made, transactions effected or other things done by or in relation to the BBC to be treated, so far as may be necessary for the purposes of or in connection with the transfers, as made, effected or done by or in relation to the transferee,

• (c) for references in any agreement (whether or not in writing) or in any deed, bond, instrument or other document to, or to any member or officer of, the BBC to have effect, so far as may be necessary for the purposes of or in connection with any of the transfers, with such modifications as are specified in the scheme,

• (d) for proceedings commenced by or against the BBC to be continued by or against the transferee, and

• (e) for any such disputes as to the effect of the scheme as arise between different transferees, or between any transferee on the one hand and the BBC on the other, to be referred to such arbitration as may be specified in or determined under the scheme.

• (3) Where any person is entitled, in consequence of any transfer made in accordance with a transfer scheme or in pursuance of any provision made under this paragraph, to possession of a document relating in part to the title to, or to the management of, any land or other property in England and Wales or Northern Ireland—

• (a) the scheme may contain provision for treating that person as having given another person an acknowledgment in writing of the right of that other person to production of the document and to delivery of copies of the document, and

• (b) section 64 of the Law of Property Act 1925 (production and safe custody of documents) or section 9 of the Conveyancing Act 1881 (the corresponding provision for Northern Ireland) shall have effect accordingly, and on the basis that the acknowledgment did not contain any such expression of contrary intention as is mentioned in that section.

• (4) Where any person is entitled, in consequence of any transfer made in accordance with a transfer scheme or in pursuance of any provision made under this paragraph, to possession of a document relating in part to the title to, or to the management of, any land or other property in Scotland transferred in accordance with a transfer scheme, subsections (1) and (2) of section 16 of the Land Registration (Scotland) 1979 (omission of certain clauses in deeds) shall have effect in relation to the transfer as if the transfer had been effected by deed and as if from each of those subsections the words “unless specially qualified” were omitted.

• (5) In this paragraph—

• (a) references to a transfer include references to the creation in any person’s favour of any interest or right, and references to a transferee shall be construed accordingly, and

• (b) references to a person who is entitled, in consequence of any transfer, to possession of a document include references to the BBC in a case where the BBC are entitled to retain possession of any document following any transfer.

• (6) Sub-paragraphs (2) to (4) shall be without prejudice to the generality of sub-paragraph (1).

Certificate of Secretary of State as to vesting of property etc.

5

A certificate issued by the Secretary of State to the effect that any property, right or liability of the BBC vested at a particular time in accordance with a transfer scheme in a person specified in the certificate shall be conclusive evidence of the matters stated in the certificate.

Duties in relation to foreign property etc.

6

• (1) It shall be the duty of the BBC and of any person to whom any foreign property, right or liability is transferred to take all such steps as may be requisite to secure that the vesting in the transferee, in accordance with the scheme, of the foreign property, right or liability is effective under the relevant foreign law.

• (2) Until the vesting in the transferee in accordance with the scheme of any foreign property, right or liability is effective under the relevant foreign law, it shall be the duty of the BBC to hold that property or right for the benefit of, or to discharge that liability on behalf of, the transferee.

• (3) Nothing in sub-paragraphs (1) and (2) shall be taken as prejudicing the effect under the law of any part of the United Kingdom of the vesting in the transferee in accordance with the scheme of any foreign property, right or liability.

• (4) The BBC shall have all such powers as may be requisite for the performance of their duties under this paragraph, but it shall be the duty of a person to whom a transfer is made in accordance with a transfer scheme to act on behalf of the BBC (so far as possible) in performing the duties imposed on them by this paragraph.

• (5) Where—

• (a) any foreign property, rights or liabilities are acquired or incurred by the BBC in respect of any other property, rights or liabilities, and

• (b) by virtue of this paragraph the BBC hold the other property or rights for the benefit of another person or discharge the liability on behalf of another person,

the property, rights or liabilities acquired or incurred are immediately to become property, rights or liabilities of that other person; and the preceding provisions of this paragraph shall have effect accordingly in relation to the property, rights or liabilities acquired or incurred.

• (6) References in this paragraph to any foreign property, right or liability are references to any property, right or liability as respects which any issue arising in any proceedings would have to be determined (in accordance with the rules of private international law) by reference to the law of a country or territory outside the United Kingdom.

• (7) Any expenses incurred by the BBC under this paragraph shall be met by the person to whom the transfer in question is made.

• (8) Any obligation imposed under this paragraph shall be enforceable as if contained in a contract between the BBC and the person to whom the transfer in question is made.

Modification of scheme by agreement

7

• (1) This paragraph applies where any person to whom anything has been transferred in accordance with a transfer scheme agrees in writing with the BBC or another person to whom anything has been transferred in accordance with that or any other transfer scheme that, for the purpose of modifying the effect of the scheme or, as the case may be, of modifying the effect of either or both of the schemes—

• (a) any of the property, rights or liabilities transferred in accordance with the scheme or either of them, and

• (b) any or all of the property, rights or liabilities acquired or incurred since the transfer in respect of the transferred property, rights or liabilities,

should be transferred from one to the other as from a date appointed by the agreement.

• (2) If—

• (a) the agreement is entered into within the period of twelve months after the time when a transfer in accordance with a transfer scheme of property, rights or liabilities to any of its parties comes into force, and

• (b) the Secretary of State has given his approval to the transfer for which the agreement provides and to its terms and conditions,

then the transfer for which the agreement provides shall take effect on the date appointed by the agreement in the like manner as a transfer for which provision is made by a transfer scheme.

• (3) Subject to the approval of the Secretary of State and to sub-paragraph (4), the provisions that may be contained in a modification agreement shall include any such provision in relation to any transfer for which it provides as may be contained, in relation to any transfer for which a transfer scheme provides, in that scheme.

• (4) Nothing in any modification agreement shall provide for any interests or rights to be created, as opposed to transferred, except as between persons who are parties to the agreement.

• (5) Before—

• (a) refusing his approval for the purposes of this paragraph, or

• (b) giving his approval for those purposes in a case where the BBC are not a party to the proposed agreement,

the Secretary of State shall consult the BBC.

• (6) In this paragraph references to a transfer in accordance with a transfer scheme include references to the creation of any interest, right or liability in accordance with such a scheme.

• (7) In this paragraph and paragraphs 8 and 9 “modification agreement” means any agreement providing for a transfer which is to take effect in accordance with sub-paragraph (2).

Compensation

8

• (1) Where, in consequence of any provisions included in a transfer scheme for the purposes of any such division as is mentioned in paragraph 2(1), the interests, rights or liabilities of a third party are modified as mentioned in sub-paragraph (2), the third party shall be entitled to such compensation as may be just in respect of—

• (a) any diminution attributable to that modification in the value of any of his interests or rights, or

• (b) any increase attributable to that modification in the burden of his liabilities.

• (2) The modifications mentioned in sub-paragraph (1) are modifications by virtue of which—

• (a) an interest of the third party in any property is transformed into, or replaced by—

• (i) an interest in only part of that property, or

• (ii) separate interests in different parts of that property,

• (b) a right of the third party against the BBC is transformed into, or replaced by, two or more rights which do not include a right which, on its own, is equivalent (disregarding the person against whom it is enforceable) to the right against the BBC, or

• (c) a liability of the third party to the BBC is transformed into, or replaced by, two or more separate liabilities at least one of which is a liability enforceable by a person other than the BBC.

• (3) Where—

• (a) a third party would, apart from any provisions of a transfer scheme or paragraph 3(3), have become entitled to, or to exercise, any interest or right arising or exercisable in respect of the transfer or creation in accordance with such a scheme of any property, rights or liabilities, and

• (b) the provisions of that scheme or of paragraph 3(3) have the effect of preventing that person’s entitlement to, or to exercise, that interest or right from arising on any occasion in respect of anything mentioned in paragraph (a), and

• (c) provision is not made by a transfer scheme for securing that an entitlement to, or to exercise, that interest or right or an equivalent interest or right, is preserved or created so as to arise in respect of the first occasion when corresponding circumstances next occur after the coming into force of the transfers for which the scheme provides,

the third party shall be entitled to such compensation as may be just in respect of the extinguishment of the interest or right.

• (4) A liability to pay compensation under this paragraph shall fall on the persons not being themselves third parties who, as the case may be—

• (a) have interests in the whole or any part of the property affected by the modification in question,

• (b) are subject to the rights of the person to be compensated which are affected by the modification in question,

• (c) are entitled to enforce the liabilities of the person to be compensated which are affected by that modification, or

• (d) benefit from the extinguishment of the entitlement mentioned in sub-paragraph (3),

and that liability shall be apportioned between those persons in such manner as may be appropriate having regard to the extent of their respective rights or liabilities or the extent of the benefit they respectively obtain from the extinguishment.

• (5) Where any liability falls by virtue of sub-paragraph (4) on the BBC, that sub-paragraph shall have effect subject to so much of any transfer scheme (including the one which gives rise to the liability) as makes provision for the transfer of that liability to any other person.

• (6) Any dispute as to whether, or as to the person by whom, any compensation is to be paid under this paragraph, and any dispute as to the amount of any compensation to be paid by any person, shall be referred to and determined—

• (a) where the claimant requires the matter to be determined in England and Wales or in Northern Ireland, by an arbitrator appointed by the Lord Chancellor, or

• (b) where the claimant requires the matter to be determined in Scotland, by an arbiter appointed by the Lord President of the Court of Session.

• (7) This paragraph shall have effect in relation to the provisions of any agreement or instrument entered into or executed in pursuance of an obligation imposed by virtue of paragraph 2(1)(g), and to any modification agreement, as it has effect in relation to the provisions of a transfer scheme.

• (8) In this paragraph “third party”, in relation to provisions capable of giving rise to compensation under this paragraph, means any person other than—

• (a) the BBC or any of their wholly-owned subsidiaries (as defined by section 1159 of the Companies Act 2006 ,

• (b) the Secretary of State, or

• (c) any person whose consent to those provisions has been given for the purposes of section 132(2) or who has agreed to those provisions by virtue of being a party to a modification agreement.

Notice to persons affected by scheme

9

• (1) It shall be the duty of the BBC, where it appears to them in the case of any transfer scheme or modification agreement that there are persons whose property, rights or liabilities are affected in a manner that may give rise to an entitlement to compensation under paragraph 8, to give notice under this paragraph to every such person.

• (2) A notice to be given by the BBC under this paragraph shall be given as soon as reasonably practicable after they make the scheme or agreement.

• (3) A notice under this paragraph shall set out the general effect of the scheme or, as the case may be, of the agreement and shall describe the respects in which it appears to the BBC that the property, rights or liabilities of the person to whom it is given are affected.

• (4) Where it is not reasonably practicable for the notice under this paragraph to any person to be given to that person, the BBC shall, instead, take such steps for publishing the contents of the notice as they may consider appropriate for the purpose of bringing the matters to which the notice relates to the attention of that person.

Consideration for transfer etc.

10

• (1) A transfer in accordance with a transfer scheme may be made for consideration or for no consideration and, if it is made for consideration, the consideration may, in particular, take the form of the issue of shares or securities.

• (2) In sub-paragraph (1), “transfer” has the meaning given by paragraph 1(1) of Schedule 7.

SCHEDULE 6

Interpretation

1

• (1) In this Schedule—

• “the Charter” means the Royal Charter of 1st May 1996 for the continuance of the British Broadcasting Corporation;

• “preparatory scheme” means a transfer scheme whose main purpose is to provide for a transfer of property, rights or liabilities from the BBC to a wholly-owned subsidiary of the BBC;

• “successor company” means a company to which property, rights or liabilities are transferred in accordance with a preparatory scheme at a time when the company is a wholly-owned subsidiary of the BBC;

• “transfer” includes—any transfer effected by or under an agreement or instrument entered into or executed in pursuance of an obligation imposed by a provision contained in a preparatory scheme by virtue of paragraph 2(1)(g) of Schedule 5;the creation of interests, rights or liabilities by or under any such agreement or instrument; andthe creation of interests, rights or liabilities by virtue of any provision contained in a preparatory scheme by virtue of paragraph 2 of Schedule 5;and references to a transfer in accordance with a preparatory scheme shall be construed accordingly;

• “wholly-owned subsidiary” has the meaning given by section 1159 of the Companies Act 2006 .

• (2) Any reference in this Schedule to vesting in accordance with a preparatory scheme or vesting effected by a preparatory scheme shall be construed as a reference to vesting as a result of a transfer in accordance with a preparatory scheme.

Statutory accounts

2

• (1) The following provisions of this paragraph shall have effect for the purposes of any statutory accounts of a successor company.

• (2) The vesting in the company effected by any preparatory scheme shall be taken—

• (a) to have been effected immediately after the end of the last financial year of the BBC to end before the coming into force of the scheme, and

• (b) to have been a vesting of such property, rights and liabilities as are determined by or under the scheme.

• (3) The value of any asset and the amount of any liability which is taken by virtue of sub-paragraph (2) to have been vested in the company shall be taken to have been—

• (a) in the case where the value or amount is determined by or under the preparatory scheme, that value or amount, and

• (b) in any other case, the value or amount assigned to the asset or liability for the purposes of the Account or Accounts prepared by the BBC for the purposes of Article 18(2) of the Charter in respect of their last financial year to end before the day on which the preparatory scheme comes into force.

• (4) If an Account or Accounts are prepared by the BBC for the purposes of Article 18(2) of the Charter in respect of the residual part of a financial year, that residual part shall be treated as a financial year of the BBC for the purposes of sub-paragraph (3).

• (5) In this paragraph “statutory accounts”, in relation to a company, means any accounts of that company prepared for the purposes of any provision of the the Companies Act 2006 .

Distributable reserves

3

• (1) Where statutory accounts of a successor company prepared as at any time would show the company as having net assets in excess of the aggregate of—

• (a) its called-up share capital, and

• (b) the amount, apart from any property, rights and liabilities transferred to it in accordance with any preparatory scheme, of its undistributable reserves,

then, for the purposes of section 830 of the Companies Act 2006 and of the preparation as at that time of any statutory accounts of the company, that excess shall be treated, except so far as the Secretary of State may otherwise direct, as representing an excess of the company’s accumulated realised profits over its accumulated realised losses.

• (2) For the purposes of section 831 of the Companies Act 2006 so much of any excess of a company’s net assets as falls, in accordance with a direction under this paragraph, to be treated otherwise than as representing an excess of the company’s accumulated realised profits over its accumulated realised losses shall be treated (subject to any modification of that direction by a subsequent direction under this paragraph) as comprised in the company’s undistributable reserves.

• (3) A direction under this paragraph may provide, in relation to any amount to which it applies, that, on the realisation (whether before or after the company in question ceases to be a wholly-owned subsidiary of the BBC) of such profits and losses as may be specified or described in the direction, so much of that amount as may be determined in accordance with the direction is to cease to be treated as mentioned in sub-paragraph (2) and is to fall to be treated as comprised in the company’s accumulated realised profits.

• (4) The Secretary of State shall not give a direction under this paragraph in relation to a successor company at any time after the company has ceased to be a wholly-owned subsidiary of the BBC.

• (5) The consent of the Treasury shall be required for the giving of a direction under this paragraph.

• (6) In this paragraph—

• “called-up share capital” has the same meaning as in the Companies Act 2006 ;

• “net assets” has the meaning given by subsection (2) of section 831 of the Companies Act 2006 ;

• “undistributable reserves” has the meaning given by subsection (4) of that section ;

and references in this paragraph, in relation to a company, to statutory accounts are references to accounts of that company prepared in respect of any period in accordance with the requirements of that Act, or with those requirements applied with such modifications as are necessary where that period is not an accounting reference period.

Dividends

4

• (1) Where a distribution is proposed to be declared during any accounting reference period of a successor company which includes a transfer date or before any accounts are laid or filed in respect of such a period, sections 836 to 840 of the Companies Act 2006 shall have effect as if—

• (a) references in section 836 to the company’s accounts or to accounts relevant under that section, and

• (b) references in section 839 to initial accounts,

included references to such accounts as, on the assumptions stated in sub-paragraph (2), would have been prepared under section 394 of that Act in respect of the relevant year (in this paragraph referred to as “the relevant accounts”).

• (2) Those assumptions are—

• (a) that the relevant year had been a financial year of the successor company,

• (b) that the vesting in accordance with the preparatory scheme had been a vesting of all the property, rights and liabilities transferred to the company in accordance with that scheme and had been effected immediately after the beginning of that year,

• (c) that the value of any asset and the amount of any liability of the BBC vested in the successor company in accordance with the preparatory scheme had been the value or (as the case may be) amount determined by or under the scheme or (if there is no such determination) the value or amount assigned to the asset or liability for the purposes of the Account or Accounts prepared by the BBC for the purposes of Article 18(2) of the Charter in respect of their financial year immediately preceding the relevant year,

• (d) that any securities of the successor company issued or allotted before the declaration of the distribution had been issued or allotted before the end of the relevant year, and

• (e) such other assumptions (if any) as may appear to the directors of the successor company to be necessary or expedient for the purposes of this paragraph.

• (3) If an Account or Accounts are prepared by the BBC for the purposes of Article 18(2) of the Charter in respect of the residual part of a financial year, that residual part shall be treated as a financial year of the BBC for the purposes of sub-paragraph (2)(c).

• (4) The relevant accounts shall not be regarded as statutory accounts for the purposes of paragraph 2.

• (5) In this paragraph—

• “accounting reference period” has the meaning given by section 391 of the Companies Act 2006 ;

• “complete financial year” means a financial year ending with 31st March;

• “the relevant year”, in relation to any transfer date, means the last complete financial year ending before that date;

• “a transfer date”, in relation to a successor company, means the date of the coming into force of any preparatory scheme in accordance with which property, rights or liabilities are transferred to that company.

Application of the Trustee Investments Act 1961

5

• (1) For the purpose of applying paragraph 3(b) of Part IV of Schedule 1 to the Trustee Investments Act 1961 (which provides that shares and debentures of a company shall not count as wider-range and narrower-range investments respectively within the meaning of that Act unless the company has paid dividends in each of the five years immediately preceding that in which the investment is made) in relation to investment in shares or debentures of a successor company during the calendar year in which the transfer date falls (“the first investment year”) or during any year following that year, the successor company shall be deemed to have paid a dividend as there mentioned—

• (a) in every year preceding the first investment year which is included in the relevant five years, and

• (b) in the first investment year, if that year is included in the relevant five years and the successor company does not in fact pay such a dividend in that year.

• (2) In sub-paragraph (1)—

• “the relevant five years” means the five years immediately preceding the year in which the investment in question is made or proposed to be made;

• “the transfer date”, in relation to a successor company, means the first date on which any preparatory scheme in accordance with which property, rights or liabilities are transferred to that company comes into force.

SCHEDULE 7

Interpretation

1

• (1) In this Schedule, unless the context otherwise requires—

• . . .

• “the BBC transmission network” has the meaning given by section 131(2);

• “the Capital Allowances Act” means the Capital Allowances Act 2001 and includes, where the context admits, enactments which under the Taxes Act 1988 are to be treated as contained in the Capital Allowances Act 2001.

• “direct disposal scheme” means a transfer scheme which is not a preparatory scheme;

• “direct disposal transfer” means a transfer in accordance with a direct disposal scheme;

• “the documents regulating the BBC” includes—the Royal Charter of 1st May 1996 for the continuance of the British Broadcasting Corporation; andthe Agreement dated 25th January 1996 between Her Majesty’s Secretary of State for National Heritage and the British Broadcasting Corporation;

• “the Gains Act” means the Taxation of Chargeable Gains Act 1992;

• “modification agreement” has the meaning given by paragraph 7(7) of Schedule 5;

• “preparatory scheme” means a transfer scheme whose main purpose is to provide for a transfer of property, rights or liabilities from the BBC to a wholly-owned subsidiary of the BBC;

• “preparatory transfer” means a transfer in accordance with a preparatory scheme;

• “relevant transfer” means a transfer in accordance with a transfer scheme;

• “successor company” means a company to which property, rights or liabilities are transferred in accordance with a preparatory scheme at a time when the company is a wholly-owned subsidiary of the BBC;

• “the Taxes Act 1988” means the Income and Corporation Taxes Act 1988;

• “transfer”, except for the purposes of paragraphs 13 to 18, includes—any transfer effected by or under an agreement or instrument entered into or executed in pursuance of an obligation imposed by a provision contained in a transfer scheme by virtue of paragraph 2(1)(g) of Schedule 5;the creation of interests, rights or liabilities by or under any such agreement or instrument; andthe creation of interests, rights or liabilities by virtue of any provision contained in a transfer scheme by virtue of paragraph 2 of Schedule 5;and references to a transfer in accordance with a transfer scheme (or any description of transfer scheme) shall be construed accordingly;

• “transferee”—in relation to a transfer scheme, means a person to whom property, rights or liabilities are transferred in accordance with the transfer scheme; andin relation to a relevant transfer, means the person to whom the property, rights or liabilities in question are transferred in accordance with the transfer scheme in question;

• “wholly-owned subsidiary” has the meaning given by section 1159 of the Companies Act 2006 .

• (2) In any provision of this Schedule “the prescribed amount”, in relation to any transferee under a transfer scheme, means such amount as may be specified by the Secretary of State by order for the purposes of that provision in its application to that transferee.

• (3) This Schedule—

• (a) so far as it relates to corporation tax, shall be construed as one with the Corporation Tax Acts, and

• (b) so far as it relates to capital allowances, shall be construed as one with the the Capital Allowances Act.

Chargeable gains: preparatory transfers etc to be without gain or loss

2

• (1) For the purposes of corporation tax on chargeable gains, the disposal of property, rights or liabilities which is constituted by a preparatory transfer shall, subject to the following provisions of this Schedule, be taken in relation to both—

• (a) the person to whom the disposal is made, and

• (b) the person making the disposal,

to be effected for a consideration such that no gain or loss accrues to the person making the disposal.

• (2) Section 171(1) of the Gains Act (which makes provision in relation to the disposal of assets from one member of a group of companies to another member of the group) shall not apply where the disposal in question is a preparatory transfer.

Chargeable gains: amendment of section 35(3)(d) of the Gains Act

3

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

Chargeable gains: section 41 of the Gains Act

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Subsection (1) of section 174 of the Gains Act (which applies section 41 of that Act to cases where assets have been acquired without gain or loss) shall have effect, without prejudice to paragraph 2, where there has been a preparatory transfer as if the asset to which the preparatory transfer relates had thereby been transferred and acquired in relevant circumstances, within the meaning of that subsection.

Chargeable gains: assets held before 6th April 1965

5

Schedule 2 to the Gains Act (assets held on 6th April 1965) shall have effect in relation to any assets which are transferred to a successor company in accordance with a preparatory scheme as if—

• (a) the BBC and the successor company were the same person; and

• (b) those assets, to the extent that they were in fact acquired or provided by the BBC, were acquired or, as the case may be, provided by the successor company.

Chargeable gains: sale of successor company : group transactions

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• (1) For the purposes of section 179 of the Gains Act (company ceasing to be a member of a group), where any company (“the degrouped company”) ceases, by virtue of a qualifying transaction, to be a member of a group of companies, the degrouped company shall not, by virtue of that qualifying transaction, be treated under that section as having sold, and immediately reacquired, any asset acquired from a company which falls to be regarded for the purposes of subsection (1) of that section as having been at the time of acquisition a member of that group.

• (2) Where, disregarding any preparatory transactions, a company would be regarded for the purposes of section 179 of the Gains Act (and, accordingly, of this paragraph) as ceasing to be a member of a group of companies by virtue of a qualifying transaction, it shall be regarded for those purposes as so doing by virtue of the qualifying transaction and not by virtue of any preparatory transactions.

• (3) In this paragraph—

• “preparatory transaction”, in the case of any qualifying transaction, means anything done for the purpose of initiating, advancing or facilitating the qualifying transaction;

• “qualifying transaction” means the disposal by the BBC of any shares or securities of a successor company.

• (4) Expressions used in this paragraph and in section 179 of the Gains Act have the same meaning in this paragraph as they have in that section.

Chargeable gains: sale or exchange of shares or securities of successor company

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• (1) Where a company issues shares or debentures to the BBC in exchange for shares in or debentures of a successor company which have not, before that exchange, been disposed of by the BBC—

• (a) sections 127 to 131 of the Gains Act (reorganisation or reduction of share capital) shall not apply by virtue of subsection (3) of section 135 of that Act (exchange of securities) in relation to that exchange, and

• (b) section 116 of that Act (reorganisations, conversions and reconstructions) accordingly does not have effect in relation to that transaction,

and the following provisions of this paragraph shall apply accordingly.

• (2) The following provisions of this paragraph apply in any case where—

• (a) there is a preparatory transfer to a successor company;

• (b) the BBC disposes of any shares or securities of the successor company for a consideration in money or money’s worth; and

• (c) those shares or securities are shares or securities which were—

• (i) held by or on behalf of the BBC immediately before the preparatory transfer takes effect, or

• (ii) issued to or for the BBC at a time when the successor company is a wholly-owned subsidiary of the BBC,

and which have not previously been disposed of by the BBC.

• (3) For the purposes of corporation tax on chargeable gains, neither a chargeable gain nor an allowable loss shall be regarded as arising to the BBC on the disposal mentioned in sub-paragraph (2)(b).

• (4) If the consideration for the disposal mentioned in sub-paragraph (2)(b) consists of or includes a right to any variable deferred consideration, then, for the purposes of corporation tax on chargeable gains, neither a chargeable gain nor an allowable loss shall be regarded as arising to the BBC on the disposal of the right to the variable deferred consideration.

• (5) In this paragraph “variable deferred consideration” means any consideration—

• (a) which is not to be given until after the disposal mentioned in sub-paragraph (2)(b); and

• (b) whose amount or value, as at the time when it is to be given, is not ascertainable at the time of that disposal.

No chargeable gain or allowable loss to arise on any disposal constituted by a direct disposal transfer

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• (1) For the purposes of corporation tax on chargeable gains, neither a chargeable gain nor an allowable loss shall be regarded as arising to the BBC on any disposal constituted by a direct disposal transfer.

• (2) If the consideration for a direct disposal transfer consists of or includes a right to any variable deferred consideration, then, for the purposes of corporation tax on chargeable gains, neither a chargeable gain nor an allowable loss shall be regarded as arising to the BBC on the disposal of the right to the variable deferred consideration.

• (3) In this paragraph “variable deferred consideration”, in the case of any direct disposal transfer, means any consideration—

• (a) which is not to be given until after the direct disposal transfer; and

• (b) whose amount or value, as at the time when it is to be given, is not ascertainable at the time of the disposal constituted by that transfer.

Chargeable gains: value shifting

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• (1) Nothing in Part VI of this Act, and no instrument or agreement made, or other thing done, under or by virtue of that Part or for the purpose of initiating, advancing or facilitating the disposal by the BBC of—

• (a) the whole or any part of the BBC transmission network, or

• (b) any shares or securities of a successor company which are shares or securities which were—

• (i) held by or on behalf of the BBC immediately before a preparatory transfer to the successor company takes effect, or

• (ii) issued to or for the BBC at a time when the successor company is a wholly-owned subsidiary of the BBC,

and which have not previously been disposed of by the BBC,

shall be regarded as a scheme or arrangement for the purposes of section 30 of the Gains Act (value-shifting).

• (2) In any case where—

• (a) an asset which is the subject of a preparatory transfer has previously been the subject of a scheme or arrangements falling within subsection (1) of section 30 of the Gains Act,

• (b) in consequence, subsection (5) of that section (consideration on disposal to be treated as increased for certain purposes) would, apart from sub-paragraph (3), have had effect in relation to the consideration for the preparatory transfer, and

• (c) the consideration for the preparatory transfer falls to be determined, for the purposes of corporation tax on chargeable gains, under paragraph 2,

sub-paragraph (3) shall apply.

• (3) Where this sub-paragraph applies—

• (a) subsection (5) of section 30 of the Gains Act shall not have effect in relation to the consideration for the preparatory transfer; but

• (b) on the first subsequent disposal of the asset which is neither a preparatory transfer nor a group disposal—

• (i) that subsection shall have effect in relation to the consideration for that disposal (whether or not it would otherwise have done so); and

• (ii) the increase that falls to be made under that subsection shall be so calculated as to include any increase which would, but for paragraph (a) above, have fallen to be made in relation to the preparatory transfer.

• (4) In this paragraph “group disposal” means a disposal which falls to be treated by virtue of section 171(1) of the Gains Act as made for a consideration such that no gain or loss accrues to the person making the disposal.

Chargeable gains: receipt of compensation or insurance money

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• (1) Subsection (4) of section 23 of the Gains Act (adjustments where compensation or insurance money used for purchase of replacement asset) shall have effect in accordance with sub-paragraph (3) in any case where—

• (a) there is a relevant transfer such that—

• (i) a capital sum received by the BBC by way of compensation for the loss or destruction of an asset, or under a policy of insurance of the risk of the loss or destruction of an asset, becomes available to the transferee; or

• (ii) a right of the BBC to receive such a sum is transferred to the transferee, and the transferee receives that sum; and

• (b) the transferee acquires an asset in circumstances where—

• (i) had there been no such relevant transfer, and

• (ii) had the BBC acquired the asset by the application of that sum,

the BBC would be treated for the purposes of that subsection as having so acquired the asset in replacement for the asset lost or destroyed.

• (2) Subsection (5) of that section (adjustments where a part of any compensation or insurance money is used for the purchase of a replacement asset) shall have effect in accordance with sub-paragraph (3) in any case where—

• (a) there is a relevant transfer such that—

• (i) a capital sum received by the BBC by way of compensation for the loss or destruction of an asset, or under a policy of insurance of the risk of the loss or destruction of an asset, becomes available to the transferee; or

• (ii) a right of the BBC to receive such a sum is transferred to the transferee, and the transferee receives that sum; and

• (b) the transferee acquires an asset in circumstances where—

• (i) had there been no such relevant transfer, and

• (ii) had the BBC acquired the asset by the application of all of that sum except for a part which was less than the amount of the gain (whether all chargeable gain or not) accruing on the disposal of the asset lost or destroyed,

the BBC would be treated for the purposes of that subsection as having so acquired the asset in replacement for the asset lost or destroyed.

• (3) In a case falling within sub-paragraph (1) or (2) of this paragraph, subsection (4) or, as the case may be, subsection (5) of section 23 of the Gains Act shall have effect as if the transferee and the BBC were the same person, except that—

• (a) in a case falling within sub-paragraph (1)(a)(i) or (2)(a)(i)—

• (i) any claim under the subsection in question must be made by the BBC and the transferee; and

• (ii) any adjustment to be made in consequence of paragraph (a) of that subsection shall be made for the purposes only of the taxation of the BBC; and

• (b) in a case falling within sub-paragraph (1)(a)(ii) or (2)(a)(ii)—

• (i) any claim under the subsection in question must be made by the transferee; and

• (ii) any adjustment to be made in consequence of paragraph (a) of that subsection shall be made for the purposes only of the taxation of the transferee.

Loan relationships: disposal of securities by BBC

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• (1) This paragraph applies in any case where—

• (a) there is a preparatory transfer to a successor company;

• (b) the BBC disposes of any securities of the successor company for a consideration in money or money’s worth; and

• (c) those securities are securities issued to or for the BBC in consideration for the preparatory transfer.

• (2) Where this paragraph applies, any debits or credits which, by reason of the disposal mentioned in sub-paragraph (1)(b), would, apart from this sub-paragraph, be given by Part 5 of the Corporation Tax Act 2009 in respect of a loan relationship for an accounting period of the BBC shall not be brought into account for the purposes of that Chapter as respects the BBC.

Transfer of trade: loss relief and capital allowances

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• (1) This paragraph applies in any case where, as a result of a relevant transfer,—

• (a) the BBC ceases to carry on a trade; and

• (b) the transferee begins to carry on that trade.

• (2) Where this paragraph applies, Chapter 1 of Part 22 of the Corporation Tax Act 2010 (transfers of trade without change of ownership) shall not have effect in relation to the event described in sub-paragraph (1).

• (3) Where this paragraph applies, the trade mentioned in sub-paragraph (1) shall not be treated as permanently discontinued nor a new trade as set up and commenced for the purpose of the allowances and charges provided for by the the Capital Allowances Act; but—

• (a) there shall be made to or on the transferee in accordance with that Act all such allowances and charges as would, if the BBC had continued to carry on the trade, have fallen to be made to or on it; and

• (b) the amount of any such allowance or charge shall be computed as if—

• (i) the transferee had been carrying on the trade since the BBC began to do so; and

• (ii) everything done to or by the BBC had been done to or by the transferee (but so that no sale or transfer which on the transfer of the trade is made to the transferee by the BBC of any assets in use for the purpose of the trade shall be treated as giving rise to any such allowance or charge).

• (4) For the purposes of this paragraph—

• (a) where, on the BBC ceasing to carry on a trade, a company begins to carry on the activities of the trade as part of its trade, then that part of the trade carried on by the company shall be treated as a separate trade, if the effect of so treating it is that this paragraph applies by virtue of sub-paragraph (1) on that event in relation to that separate trade; and

• (b) where, on the BBC ceasing to carry on part of a trade, a company begins to carry on the activities of that part as its trade or part of its trade, the BBC shall be treated as having carried on that part of its trade as a separate trade if the effect of so treating it is that this paragraph applies by virtue of sub-paragraph (1) on that event in relation to that separate trade.

Capital allowances: industrial buildings . . .

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• (1) This paragraph applies in any case where there is a relevant transfer of property which is, for the purposes of Part 3 of the Capital Allowances Act (industrial buildings allowances), the relevant interest in relation to any expenditure incurred on the construction of a building or structure.

• (2) Where this paragraph applies, the Secretary of State may by order make provision specifying, as respects the transferee,—

• (a) the amount which is to be taken for the purposes of Part 3 of the Capital Allowances Act to be the amount of the capital expenditure incurred on the construction of the building or structure; and

• (b) the date which is to be taken for the purposes of that Part as the date on which the building or structure was first used.

• (3) This paragraph shall not have effect in relation to any property if paragraph 12(3) has effect in relation to it.

Capital allowances: plant and machinery

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• (1) For the purposes of Part 2 of the Capital Allowances Act (plant and machinery allowances) property which is transferred to a successor company in accordance with a preparatory scheme shall be treated as if—

• (a) it had been acquired by the successor company, for the purposes for which it is used by that company on and after the date on which the transfer of the property in accordance with the scheme takes effect, on that date; and

• (b) capital expenditure of the prescribed amount had been incurred on that date by the successor company on the acquisition of the property for the purposes mentioned in paragraph (a).

• (2) This paragraph shall not have effect in relation to any property if paragraph 12(3) has effect in relation to it.

Capital allowances: leased fixtures

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• (1) This paragraph applies to any lease which is granted in pursuance of an obligation imposed by a provision contained in a preparatory scheme by virtue of paragraph 2(1)(g) of Schedule 5.

• (2) Where the conditions in section 183(1)(a) and (b) of the Capital Allowances Act (incoming lessee where lessor entitled to allowances)are fulfilled in relation to a lease to which this paragraph applies—

• (a) the lessee shall be deemed for the purposes of Part 2 of that Act to have given as consideration for the lease a capital sum which falls to be treated for the purposes of that Part as expenditure on the provision of the fixture concerned;

• (b) the amount of that capital sum shall be the prescribed amount; and

• (c) subsection (1)(d) of that section shall be disregarded.

• (3) Where the conditions in section 184(1)(a) to (c) of the Capital Allowances Act (incoming lessee where lessor not entitled to allowances) are fulfilled in relation to a lease to which this paragraph applies—

• (a) the lessee shall be deemed for the purposes of Part 2 of that Act to have given as consideration for the lease a capital sum which falls to be treated for the purposes of that Part as expenditure on the provision of the fixture concerned; and

• (b) the amount of that capital sum shall be the prescribed amount.

Capital allowances: connected persons

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In Part 2 of the Capital Allowances Act (plant and machinery allowances) references to a transaction (however described) between connected persons within the meaning of section 1122 of the Corporation Tax Act 2010 shall not include references to a preparatory transfer.

Capital allowances: agricultural buildings allowances

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• (1) This paragraph applies where there is a relevant transfer of property which is the relevant interest in relation to any expenditure for which the BBC would be entitled to an allowance (other than a balancing allowance) under Part 4 of the Capital Allowances Act (agricultural buildings allowances).

• (2) Where this paragraph applies, then, as respects the transferee—