Legalize / United Kingdom / Public General Act

Finance Act 2000

Type Public General Act

Publication 2000-07-28

Last updated 2026-04-07

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(92) (1) Where a company carries on a business, the profits or losses of the business for an accounting period shall for the purposes of corporation tax be computed and expressed in sterling; but this is subject to section 93 below. (2) In this section— - “losses” includes management expenses and any allowances falling to be made under section 28 or 61(1) of the Capital Allowances Act 1990; - “profits” includes gains, income and any charges falling to be made under section 28 or 61(1) of that Act. (93) (1) This section applies where in an accounting period a company carries on a business and either the first condition or the second condition is fulfilled. (2) The first condition is that— (a) the accounts of the company as a whole are prepared in a currency other than sterling in accordance with normal accounting practice; and (b) in the case of a company which is not resident in the United Kingdom, the company makes a return of accounts for its branch in the United Kingdom prepared in such a currency in accordance with such practice. (3) The second condition is that— (a) the accounts of the company as a whole are prepared in sterling but, so far as relating to the business, they are prepared, using the closing rate/net investment method, from financial statements prepared in a currency other than sterling; or (b) in the case of a company which is not resident in the United Kingdom, the company makes a return of accounts for its branch in the United Kingdom prepared in sterling but, so far as relating to the business, it is prepared, using that method, from financial statements prepared in such a currency. (4) The profits or losses of the business for an accounting period shall for the purposes of corporation tax be found by— (a) taking the amount of all the profits and losses of the business for the period computed and expressed in the relevant foreign currency; (b) taking account of any of the following which are so computed and expressed— (i) any management expenses brought forward under section 75(3) of the Taxes Act 1988 from an earlier accounting period; (ii) any losses of the business brought forward under section 392B or 393 of that Act from such a period; and (iii) any non-trading deficits on loan relationships brought forward under section 83 of the Finance Act 1996 from the previous accounting period; and (c) taking the sterling equivalent of the amount found by applying paragraphs (a) and (b) above. (5) In the application of section 22B, 34, 35, 38C, 38D or 79A of the Capital Allowances Act 1990 for the purposes of subsection (4)(a) or (b) above, it shall be assumed that any sterling amount mentioned in any of those sections is its equivalent expressed in the relevant foreign currency. (6) Where in an accounting period— (a) a company carries on different parts of a business through different branches (whether within or outside the United Kingdom); and (b) this section would apply differently in relation to different parts if they were separate businesses, those parts shall be treated for the purposes of this section as if they were separate businesses for that period. (7) In this section, unless the context otherwise requires— - “accounts”, in relation to a company, means— 1. the annual accounts of the company prepared in accordance with Part VII of the Companies Act 1985 or Part VIII of the Companies (Northern Ireland) Order 1986; or 2. if the company is not required to prepare such accounts, the accounts which it is required to keep under the law of its home State; or 3. if the company is not so required to keep accounts, such of its accounts as most closely correspond to accounts which it would have been required to prepare if the provisions of that Part applied to it; - “branch” includes any collection of assets and liabilities; - “the closing rate/net investment method” means the method so called as described under the title “Foreign currency translation” in the Statement of Standard Accounting Practice issued in April 1983 by the Institute of Chartered Accountants in England and Wales; - “home State”, in relation to a company, means the country or territory under whose laws the company is incorporated; - “losses” has the same meaning as in section 92 above except that it does not include allowable losses within the meaning of the Taxation of Chargeable Gains Act 1992; - “profits” has the same meaning as in section 92 above except that it does not include chargeable gains within the meaning of that Act; - “the relevant foreign currency” means the currency other than sterling or, where the first condition is fulfilled and two different such currencies are involved, the currency in which the return of accounts is prepared; - “return of accounts”, in relation to a branch in the United Kingdom, means a return of such accounts of the branch as may be required by the Inland Revenue under paragraph 3 of Schedule 18 to the Finance Act 1998 (company tax returns, assessments and related matters). (94) (1) Any receipt or expense which is to be taken into account in making a computation under subsection (1) of section 92 above for an accounting period, and is denominated in a currency other than sterling, shall be translated into its sterling equivalent— (a) if either of the conditions mentioned in subsection (2) below is fulfilled, by reference to the rate used in the preparation of the accounts of the company as a whole for that period; (b) if neither of those conditions is fulfilled, by reference to the London closing exchange rate for the relevant day. (2) The conditions are— (a) that the rate is an arm’s length exchange rate for the relevant day; (b) that the rate is an average arm’s length exchange rate for a period ending with that day, or for a period not exceeding three months which includes that day, and the arm’s length exchange rate for any day in that period (except the first) is not significantly different from that for the preceding day. (3) Subject to subsections (5) and (7) below, any amount found by applying paragraphs (a) and (b) of subsection (4) of section 93 above shall be translated into its sterling equivalent by reference to the London closing exchange rate for the relevant day. (4) The following— (a) any receipt or expense which is to be taken into account in making a calculation for the purposes of subsection (4)(a) or (b) of section 93 above, and is denominated in a currency other than the relevant foreign currency; and (b) any such sterling amount as is referred to in subsection (5) of that section, shall be translated into its equivalent expressed in the relevant foreign currency by reference to the London closing exchange rate for the relevant day. (5) Where section 93 above applies by virtue of the first condition mentioned in that section, then, as regards the business or part of the business, the company— (a) may elect, by a notice given to an officer of the Board, that as from the first day of the accounting period in which the notice is given, an average arm’s length exchange rate shall be used for the purposes of subsection (3) above instead of the rate there mentioned; and (b) may withdraw such an election, by a notice so given, as from the first day of the first accounting period beginning on or after the date of the notice. (6) Where an election under subsection (5) above is withdrawn, no further election may be made under that subsection so as to take effect before the third anniversary of the day on which the withdrawal takes effect. (7) Where— (a) section 93 above applies by virtue of the second condition mentioned in that section; and (b) the accounts of the company, so far as relating to the business or part of the business, are prepared by reference to an average arm’s length exchange rate, that exchange rate shall be used for the purposes of subsection (3) above instead of the rate there mentioned. (8) In this section— - “accounts” has the same meaning as in section 93 above; - “arm’s length exchange rate” means such exchange rate as might reasonably be expected to be agreed between persons dealing at arm’s length; - “average arm’s length exchange rate”, in relation to a period, means the rate which represents an appropriate average of arm’s length exchange rates for the period; - “the relevant day” means— 1. for the purposes of subsections (1), (2) and (4)(a) above, the day on which the company becomes entitled to the receipt or incurs (or is treated as incurring) the expense; 2. for the purposes of subsection (3) above, the last day of the accounting period in question; 3. for the purposes of subsection (4)(b) above, the day on which the company incurs the capital expenditure. (9) Nothing in this section affects the operation of Chapter IV of Part VII of the Taxes Act 1988 (controlled foreign companies) or Chapter II of this Part. (10) Nothing in paragraph 88 of Schedule 18 to the Finance Act 1998 (company tax returns, assessments and related matters) shall be taken to prevent any amount which is taken to be conclusively determined for the purposes of the Corporation Tax Acts from being translated under this section by reference to an exchange rate which was not used to determine the amount which can no longer be altered.

(2) Where any of the items referred to in section 93(4)(b) of the Finance Act 1993 (as substituted by subsection (1) above) fall to be taken into account in the first accounting period in relation to which this section has effect, the amounts of those items shall be computed and expressed in the relevant currency by reference to the London closing exchange rate for the last day of the immediately preceding accounting period.

(3) Where any amount falls to be taken into account under Chapter 5 of Part 2 of the Capital Allowances Act as available qualifying expenditure for the first accounting period in relation to which this section has effect relate to expenditure which was incurred before the beginning of that period, the amounts of those items shall be computed and expressed in the relevant currency by reference to the London closing exchange rate for the last day of the immediately preceding accounting period.

(4) Subject to subsection (5) below, this section has effect for accounting periods beginning on or after 1st January 2000 and ending on or after 21st March 2000.

(5) Any company which did not, for the accounting period immediately preceding the first accounting period falling within subsection (4) above, make an election in respect of a trade or part of a trade under the Local Currency Elections Regulations 1994 may, by notice given to an officer of the Board on or before 31st August 2000, elect that this section shall not have effect in relation to it until the first accounting period beginning on or after 1st July 2000.

Foreign exchange gains and losses: use of local currency

106

Insurance

General insurance reserves

107

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Overseas life assurance business

108

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Insurance business: apportionment rules

109

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Miscellaneous

Rent factoring

110

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Payments under deduction of tax

111

(1) Chapter VIIA of Part IV of the Taxes Act 1988 (paying and collecting agents) shall cease to have effect.

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

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

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

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

(6) In this section—

(a) subsections (1) and (5) apply to relevant payments or receipts in relation to which the chargeable date for the purposes of Chapter VIIA of Part IV is on or after 1st April 2001;

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

UK public revenue dividends: deduction of tax

112

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Tax treatment of expenditure on production or acquisition of films

113

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Part IV — Stamp duty and Stamp duty reserve tax

Stamp duty

Rates: conveyance or transfer on sale

114

(1) In Schedule 13 to the Finance Act 1999 (instruments chargeable and rates of duty), in Part I (conveyance or transfer on sale), in the third column of the table in paragraph 4—

(a) in the third entry, for “2.5%" substitute “ 3% ”; and

(b) in the fourth entry, for “3.5%" substitute “ 4% ”.

(2) This section applies to instruments executed on or after 28th March 2000.

(3) But this section does not apply to an instrument giving effect to a contract made on or before 21st March 2000, unless—

(a) the instrument is made in consequence of the exercise after that date of any option, right of pre-emption or similar right; or

(b) the instrument transfers the property in question to, or vests it in, a person other than the purchaser under the contract, because of an assignment (or, in Scotland, assignation) or further contract made after that date.

(4) This section shall be deemed to have come into force on 28th March 2000.

Rates: duty on lease chargeable by reference to rent

115

(1) In Schedule 13 to the Finance Act 1999 (instruments chargeable and rates of duty), in Part II (lease)—

(a) in paragraph 11, in paragraph 1 of the table, and

(b) in paragraph 12(3), in paragraph 1(a) and (b) of the table,

for “£500" substitute “ £5,000 ”.

(2) This section has effect in relation to instruments executed on or after 28th March 2000.

(3) This section shall be deemed to have come into force on 28th March 2000.

Rate of duty on seven year leases

116

(1) In paragraph 12(3) of Schedule 13 to the Finance Act 1999 (rates of stamp duty on leases where part of consideration is rent), in paragraph 1 of the table, for “less than 7 years" substitute “ not more than 7 years ”.

(2) This section applies to instruments executed on or after 1st October 1999, subject to Schedule 32 to this Act (which makes transitional provision for instruments executed on or after 1st October 1999 but before 28th March 2000).

(3) This section shall be deemed to have come into force on 28th March 2000.

Power to vary stamp duties

117

Schedule 33 to this Act (power to vary stamp duties) has effect.

Land transferred etc for other property

118

(1) Subsection (2) applies where—

(a) an instrument transferring or vesting an estate or interest in land would not, apart from this section, be or fall to be treated as a conveyance or transfer on sale for the purposes of stamp duty; but

(b) the transfer or vesting of the estate or interest is for consideration; and

(2) For the purposes of Part I of Schedule 13 to the Finance Act 1999 (stamp duty on conveyance or transfer on sale) the instrument transferring or vesting the estate or interest shall be taken to be a transfer on sale of the estate or interest.

(3) If—

(a) the other property is or includes one or more estates or interests in land, and

(b) ad valorem duty is chargeable on the conveyance or transfer of all or any of those estates or interests,

the amount of duty that would (apart from this subsection) be chargeable in consequence of subsection (2) on the transfer on sale there mentioned shall be reduced (but not below nil) by the total of thead valorem duty chargeable as mentioned in paragraph (b).

(4) If, for the purposes of Part I of Schedule 13 to the Finance Act 1999, the amount or value of the consideration for the transfer on sale mentioned in subsection (2) would (apart from this subsection) exceed the market value of the estate or interest immediately before the execution of the instrument transferring or vesting it, the amount or value of the consideration shall be taken for those purposes to be equal to that market value.

(5) For the purposes of this section, the market value of property at any time is the price which that property might reasonably be expected to fetch on a sale at that time in the open market.

(6) Subsection (2) has effect even though—

(a) the transfer or vesting of the estate or interest is the whole or part of the consideration for a sale of the other property; or

(b) the transaction is by way of exchange.

(7) Subsection (2) does not affect any charge to stamp duty in respect of the same or any other instrument so far as it relates to the transfer of the other property.

(8) This section is subject to subsection (5) of section 119.

(9) This section shall be construed as one with the Stamp Act 1891.

(10) This section applies to instruments executed on or after 28th March 2000.

(11) But this section does not apply to an instrument giving effect to a contract made on or before 21st March 2000, unless—

(a) the instrument is made in consequence of the exercise after that date of any option, right of pre-emption or similar right; or

(b) the instrument transfers the property in question to, or vests it in, a person other than the purchaser under the contract, because of an assignment (or, in Scotland, assignation) or further contract made after that date.

(12) This section shall be deemed to have come into force on 28th March 2000.

Transfer of land to connected company

119

(1) This section applies where an estate or interest in land is transferred to or vested in a company (“A”) and—

(a) the person transferring or vesting the estate or interest (“B”) is connected with A; or

(b) some or all of the consideration for the transfer or vesting consists of the issue or transfer of shares in a company with which B is connected.

(2) For the purposes of Part I of Schedule 13 to the Finance Act 1999 (stamp duty on conveyance or transfer on sale) an instrument transferring or vesting the estate or interest shall be taken to be a transfer on sale of the estate or interest.

(3) If for those purposes the amount or value of the consideration for the transfer on sale of the estate or interest would, apart from this subsection, be less than the value determined under subsection (4), the consideration shall be taken for those purposes to be the value determined under subsection (4).

(4) That value is—

(a) the market value of the estate or interest immediately before the execution of the instrument transferring or vesting it; but

(b) reduced by the value of so much of any actual consideration as does not consist of property.

(5) Where—

(a) apart from this section, an instrument would be chargeable to stamp duty in accordance with section 118, and

(b) apart from that section, the instrument would be chargeable to stamp duty in accordance with this section,

the stamp duty chargeable on the instrument shall be determined in accordance with this section (instead of that section).

(6) This section applies only if, in consequence of its application, the instrument transferring or vesting the estate or interest is chargeable with a greater amount of stamp duty than it would be apart from this section and section 118.

(7) For the purposes of this section, the market value of property at any time is the price which that property might reasonably be expected to fetch on a sale at that time in the open market.

(8) In this section—

“company” means any body corporate;

“shares” includes stock and the reference to shares in a company includes a reference to securities issued by a company.

(9) For the purposes of this section, the question whether any person is connected with another shall be determined in accordance with the provisions of section 1122 of the Corporation Tax Act 2010.

(10) This section shall be construed as one with the Stamp Act 1891.

(11) This section applies to instruments executed on or after 28th March 2000.

(12) But this section does not apply to an instrument giving effect to a contract made on or before 21st March 2000, unless—

(a) the instrument is made in consequence of the exercise after that date of any option, right of pre-emption or similar right; or

(b) the instrument transfers the property in question to, or vests it in, a person other than the purchaser under the contract, because of an assignment (or, in Scotland, assignation) or further contract made after that date.

(13) This section shall be deemed to have come into force on 28th March 2000.

Exceptions from section 119

120

(1) Section 119 does not apply by virtue of paragraph (a) of subsection (1) of that section in any of the following cases (any reference in this section to A or B being taken as a reference to the person referred to as A or B, as the case may be, in that subsection).

(2) Case 1 is where B holds the estate or interest as nominee or bare trustee for A.

(3) Case 2 is where A is to hold the estate or interest as nominee or bare trustee for B.

(4) Case 3 is where B holds the estate or interest as nominee or bare trustee for some other person and A is to hold it as nominee or bare trustee for that other person.

(5) Case 4 is where (in a case not falling within subsection (2) or (4) above)—

(a) the transfer or vesting is a conveyance or transfer out of a settlement in or towards satisfaction of a beneficiary’s interest;

(b) the beneficiary’s interest is not an interest acquired for money or money’s worth; and

(6) Case 5 is where (in a case not falling within subsection (3) above) A—

(a) is a person carrying on a business which consists of or includes the management of trusts; and

(b) is to hold the estate or interest as trustee acting in the course of that business.

(7) Case 6 is where (in a case not falling within subsection (3) above) A is to hold the estate or interest as trustee and, apart from section 1122(6) of the Corporation Tax Act 2010 (trustees as connected persons), would not be connected with B.

(8) Case 7 is where—

(a) B is a company;

(b) the transfer or vesting is, or is part of, a distribution of assets (whether or not in connection with the winding up of the company); and

(9) This section shall be construed as one with the Stamp Act 1891.

(10) This section applies to instruments executed after the day on which this Act is passed.

Grant of lease to connected company

121

(1) This section applies where a lease is granted to a company (“A”) and—

(a) the person granting the lease (“B”) is connected with A; or

(b) some or all of the consideration for the grant of the lease consists of the issue or transfer of shares in a company with which B is connected.

(2) Subsection (3) has effect for the purposes of stamp duty chargeable under Part II of Schedule 13 to the Finance Act 1999 (stamp duty on a lease) by reference to Part I of that Schedule (conveyance or transfer on sale).

(3) If, apart from this subsection, the amount or value of the consideration for the grant would be less than the value determined under subsection (4), the consideration shall be taken to be the value determined under subsection (4).

(4) That value is—

(a) the market value, immediately before the instrument granting the lease is executed, of the lease granted; but

(b) reduced by the value of so much of any actual consideration as does not consist of property.

(5) This section applies only if, in consequence of its application, the lease is chargeable with a greater amount of stamp duty than it would be apart from this section.

(6) For the purposes of this section, the market value of property at any time is the price which that property might reasonably be expected to fetch on a sale at that time in the open market.

(7) In this section—

“company” means any body corporate;

“shares” includes stock and the reference to shares in a company includes a reference to securities issued by a company.

(8) For the purposes of this section, the question whether any person is connected with another shall be determined in accordance with the provisions of section 1122 of the Corporation Tax Act 2010.

(9) This section shall be construed as one with the Stamp Act 1891.

(10) This section applies to instruments executed on or after 28th March 2000.

(11) But this section does not apply to an instrument giving effect to a contract made on or before 21st March 2000, unless—

(a) the instrument is made in consequence of the exercise after that date of any option, right of pre-emption or similar right; or

(b) the instrument transfers the property in question to, or vests it in, a person other than the purchaser under the contract, because of an assignment (or, in Scotland, assignation) or further contract made after that date.

(12) This section shall be deemed to have come into force on 28th March 2000.

Marketable securities transferred etc for exempt property

122

(1) Subsection (2) applies where—

(a) an instrument transferring marketable securities would not, apart from this section, be or fall to be treated as a transfer on sale for the purposes of stamp duty; but

(b) the transfer of the marketable securities is for consideration; and

(2) For the purposes of Part I of Schedule 13 to the Finance Act 1999 (stamp duty on conveyance or transfer on sale) the instrument transferring the marketable securities shall be taken to be a transfer on sale of those securities.

(3) If the amount or value of the consideration for that transfer on sale would (apart from this subsection) exceed the market value of the marketable securities immediately before the execution of the instrument transferring them, the amount or value of the consideration shall be taken to be equal to that market value.

For this purpose the market value of property at any time is the price which that property might reasonably be expected to fetch on a sale at that time in the open market.

(4) Subsection (2) has effect even though—

(a) the transfer of the marketable securities is the whole or part of the consideration for a sale of the other property; or

(b) the transaction is by way of exchange.

(5) Subsection (2) does not affect any charge to stamp duty in respect of the same or any other instrument so far as it relates to the transfer of the other property.

(6) In this section “qualifying property” means any debt due, stock or securities, to the extent that the debt, stock or securities are not chargeable securities, within the meaning of Part IV of the Finance Act 1986 (stamp duty reserve tax).

(7) This section shall be construed as one with the Stamp Act 1891.

(8) This section applies to instruments executed on or after 28th March 2000.

(9) But this section does not apply to an instrument giving effect to a contract made on or before 21st March 2000, unless—

(a) the instrument is made in consequence of the exercise after that date of any option, right of pre-emption or similar right; or

(b) the instrument transfers the property in question to, or vests it in, a person other than the purchaser under the contract, because of an assignment (or, in Scotland, assignation) or further contract made after that date.

(10) This section shall be deemed to have come into force on 28th March 2000.

Transfer of property between associated companies: Great Britain

123

(1) Amend section 42 of the Finance Act 1930 as follows.

(2) In subsection (2) (instruments on which stamp duty not chargeable) in paragraph (a) for “to another" substitute “ (“the transferor”) to another (“the transferee”) ”.

(3) In that subsection, after paragraph (b) insert— “ unless at the time the instrument is executed arrangements are in existence by virtue of which at that or some later time any person has or could obtain, or any persons together have or could obtain, control of the transferee but not of the transferor. ”.

(4) In subsection (2B) (body to be parent of another if beneficial owner of 75% of ordinary share capital) after “if at that time the first body" insert “ (a) ” and at the end of the subsection add—

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

(5) In subsection (3)—

(a) after “The ownership referred to in" insert “ paragraph (a) of ”; and

(b) for “this section" substitute “ that paragraph ”.

(6) At the end of the section add—

(5) Schedule 18 to the Income and Corporation Taxes Act 1988 shall apply for the purposes of paragraphs (b) and (c) of subsection (2B) as it applies for the purposes of paragraphs (a) and (b) of section 413(7) of that Act; but this is subject to subsection (6). (6) In determining for the purposes of this section whether a body corporate is the parent of the transferor, paragraphs 5(3) and 5B to 5E of Schedule 18 to the Income and Corporation Taxes Act 1988 shall not apply for the purposes of paragraph (b) or (c) of subsection (2B). (7) In this section, “control” shall be construed in accordance with section 840 of the Income and Corporation Taxes Act 1988.

(7) This section has effect in relation to instruments executed after the day on which this Act is passed.

Transfer of property between associated companies: Northern Ireland

124

(1) Amend section 11 of the Finance Act (Northern Ireland) 1954 as follows.

(2) After subsection (2) (instruments on which stamp duty not chargeable) insert—

(2A) But this section does not apply to an instrument by virtue of subsection (2)(a) if, at the time the instrument is executed, arrangements are in existence by virtue of which at that or some later time any person has or could obtain, or any persons together have or could obtain, control of the transferee but not of the transferor.

(3) In subsection (3AA) (body to be parent of another if beneficial owner of 75% of ordinary share capital) after “if at that time the first body" insert “ (a) ” and at the end of the subsection add—

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

(4) In subsection (3A)—

(a) after “The ownership referred to in" insert “ paragraph (a) of ”; and

(b) for “this section" substitute “ that paragraph ”.

(5) At the end of the section add—

(6) Schedule 18 to the Income and Corporation Taxes Act 1988 shall apply for the purposes of paragraphs (b) and (c) of subsection (3AA) as it applies for the purposes of paragraphs (a) and (b) of section 413(7) of that Act; but this is subject to subsection (7). (7) In determining for the purposes of this section whether a body corporate is the parent of the transferor, paragraphs 5(3) and 5B to 5E of Schedule 18 to the Income and Corporation Taxes Act 1988 shall not apply for the purposes of paragraph (b) or (c) of subsection (3AA). (8) In this section, “control” shall be construed in accordance with section 840 of the Income and Corporation Taxes Act 1988.

(6) This section has effect in relation to instruments executed after the day on which this Act is passed.

Grant of leases etc between associated companies

125

(1) Amend section 151 of the Finance Act 1995 as follows.

(2) In subsection (1) (stamp duty not chargeable on leases etc) at the end insert the following paragraph—

This subsection is subject to subsection (4A) below.

(3) After subsection (4) insert—

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

(4) In subsection (8) (body to be parent of another if beneficial owner of 75% of ordinary share capital) after “if at that time the first body" insert “ (a) ” and at the end of the subsection add—

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

(5) In subsection (10)—

(a) after “The ownership referred to in" insert “ paragraph (a) of ”; and

(b) for “this section" substitute “ that paragraph ”.

(6) After subsection (10) insert—

(10A) Schedule 18 to the Income and Corporation Taxes Act 1988 shall apply for the purposes of paragraphs (b) and (c) of subsection (8) as it applies for the purposes of paragraphs (a) and (b) of section 413(7) of that Act; but this is subject to subsection (10B). (10B) In determining for the purposes of this section whether a body corporate is the parent of the lessor, paragraphs 5(3) and 5B to 5E of Schedule 18 to the Income and Corporation Taxes Act 1988 shall not apply for the purposes of paragraph (b) or (c) of subsection (8) above. (10C) In this section, “control” shall be construed in accordance with section 840 of the Income and Corporation Taxes Act 1988.

(7) This section has effect in relation to instruments executed after the day on which this Act is passed.

Future issues of stock

126

(1) Amend section 55 of the Stamp Act 1891 (calculation of ad valorem duty in respect of stock and securities) as follows.

(2) After subsection (1) insert—

(1A) For the purposes of subsection (1), it is immaterial— (a) whether, at the time of the execution of the conveyance on sale, the stock or marketable security is or has been issued or is to be issued; and (b) in a case where the stock or marketable security is to be issued, when it is to be, or is, issued and whether the issue is certain or contingent.

(3) This section has effect in relation to instruments executed after the day on which this Act is passed.

Company acquisition reliefs: redeemable shares

127

(1) Amend section 75 of the Finance Act 1986 (acquisitions: reliefs) in accordance with subsections (2) and (3).

(2) In subsection (4), in paragraph (a) (which requires that the consideration for the acquisition consists of or includes the issue of shares) after “the issue of" insert “ non-redeemable ”.

(3) In subsection (4), after paragraph (b) add—

In paragraph (a) above, “non-redeemable shares” means shares which are not redeemable shares.

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

(5) This section has effect in relation to instruments executed after the day on which this Act is passed.

Surrender of leases

128

(1) Where a lease is or has been surrendered or, in Scotland, renounced at any time, a document evidencing the surrender or renunciation shall be treated for the purposes of stamp duty as if it were a deed executed at that time effecting the surrender or renunciation.

(2) Stamp duty shall be chargeable by virtue of subsection (1) on a document containing a statutory declaration, notwithstanding anything in land registration rules under the Land Registration Act 2002.

(3) Stamp duty shall not be chargeable by virtue of subsection (1) on any lease or agreement for a lease or with respect to any letting if the lease or agreement—

(a) is made in consideration of the surrender or renunciation; and

(b) relates to the same subject matter as the lease surrendered or renounced.

(4) Stamp duty shall not be chargeable by virtue of subsection (1) on any document if a document falling within subsection (5) has been duly stamped.

(5) The documents that fall within this subsection are—

(a) a deed effecting the surrender or renunciation;

(b) an agreement which falls to be treated for the purposes of stamp duty as if it were such a deed;

(d) any lease or agreement falling within subsection (3).

(6) A land registrar shall regard a document which by virtue of subsection (4) is not chargeable to stamp duty by virtue of subsection (1) as not duly stamped unless—

(a) it is stamped as if it were a deed effecting the surrender or renunciation; or

(b) it appears by some stamp ... on it that the full and proper duty chargeable on such a deed has been paid on another document; or

(d) the land registrar is aware of a document falling within subsection (5) which has been duly stamped.

(7) The documents which evidence the surrender or renunciation of a lease shall be taken to include an application, in consequence of the surrender or renunciation of the lease, for—

(a) the making in a land register, or

(b) the removal from a land register,

of an entry relating to the lease.

(8) In this section—

“land register"—

(a) in relation to England and Wales, means the register kept under section 1 of the Land Registration Act 2002;

(b) in relation to Scotland, means the Land Register of Scotland or the General Register of Sasines;

(c) in relation to Northern Ireland, means the register maintained under section 10 of the Land Registration Act (Northern Ireland) 1970;

“land registrar"—

(a) in relation to England and Wales, means the Chief Land Registrar or any other officer of Her Majesty’s Land Registry exercising functions of the Chief Land Registrar;

(b) in relation to Scotland, means the Keeper of the Registers of Scotland;

(c) in relation to Northern Ireland, means the Registrar of Titles or any other official of the Land Registry exercising functions of the Registrar of Titles.

(9) This section shall be construed as one with the Stamp Act 1891.

(10) This section applies to documents relating to the surrender or renunciation of a lease after the day on which this Act is passed.

Abolition of duty on instruments relating to intellectual property

129

(1) No stamp duty is chargeable on an instrument for the sale, transfer or other disposition of intellectual property.

(2) In subsection (1) “intellectual property” means—

(a) any patent, trade mark, registered design, copyright or design right,

(b) any plant breeders’ rights and rights under section 7 of the Plant Varieties Act 1997,

(d) any rights under the law of a country or territory outside the United Kingdom that correspond or are similar to those within paragraph (a), (b) or (c).

(3) Schedule 34 to this Act (which contains provisions supplementing this section) has effect.

(4) This section and Schedule 34 shall be construed as one with the Stamp Act 1891.

(5) This section applies to instruments executed on or after 28th March 2000.

(6) This section shall be deemed to have come into force on that date.

130

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

Relief for certain instruments executed before this Act has effect

131

(1) This section applies to an instrument of any of the following descriptions executed in the period beginning with 22nd March 2000 and ending with the day on which this Act is passed—

(a) an instrument transferring or vesting an estate or interest in land in such circumstances as are mentioned in section 119 (transfer of land to connected company), in a case specified in section 120 (excepted cases);

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

(2) If the instrument is not stamped until after the day on which this Act is passed, the law in force at the time of its execution shall be deemed for stamp duty purposes to be that which would have applied if it had been executed after that day.

(3) If the Commissioners are satisfied that—

(a) the instrument was stamped on or before the day on which this Act is passed,

(b) stamp duty was chargeable in respect of it, and

they shall pay to such person as they consider appropriate an amount equal to the duty (and any interest or penalty) that would not have been payable if the law in force at the time of execution of the instrument had been that which would have applied had it been executed after that day.

(4) Any such payment must be claimed before 1st April 2001.

(5) Entitlement to a payment is subject to compliance with such conditions as the Commissioners may determine with respect to the production of the instrument, to its being stamped so as to indicate that it has been produced under this section or to other matters.

(6) For the purposes of section 10 of the Exchequer and Audit Departments Act 1866 (Commissioners to deduct repayments from gross revenues) any amount paid under this section shall be treated as a repayment.

(7) This section shall be construed as one with the Stamp Act 1891.

The Northern Ireland Assembly Commission

132

(1) Amend section 55 of the Finance Act 1987 (Crown exemption from stamp duty) as follows.

(2) In subsection (1) (which specifies the bodies relieved from stamp duty)—

(a) after “agreed to be made" insert “ (a) ”;

(b) after “Minister of the Crown or" insert “ (b) ”; and

(3) In subsection (1), after “National Assembly for Wales," insert

or (d) to the Northern Ireland Assembly Commission,

(4) Subsection (3) has effect in relation to instruments executed on or after 28th March 2000.

(5) This section shall be deemed to have come into force on 28th March 2000.

Stamp duty and Stamp duty reserve tax

Loan capital where return bears inverse relationship to results

133

(1) In section 79 of the Finance Act 1986 (loan capital), after subsection (7) insert—

(7A) Subsection (4) above shall not be prevented from applying to an instrument by virtue of subsection (6)(b) above by reason only that the loan capital concerned carries a right to interest which— (a) reduces in the event of the results of a business or part of a business improving, or the value of any property increasing, or (b) increases in the event of the results of a business or part of a business deteriorating, or the value of any property diminishing.

(2) For the purposes of stamp duty, subsection (1) above has effect where the instrument is executed on or after 21st March 2000.

(3) For the purposes of stamp duty reserve tax, subsection (1) above has effect—

(a) in relation to the charge to tax under section 87 of the Finance Act 1986, where—

(i) the agreement to transfer is conditional and the condition is satisfied on or after 21st March 2000, or

(ii) the agreement is not conditional and is made on or after that date;

(b) in relation to the charge to tax under section 93(1) of that Act, where securities are transferred, issued or appropriated on or after 21st March 2000 (whenever the arrangement was made);

(c) in relation to the charge to tax under section 96(1) of that Act, where securities are transferred or issued on or after 21st March 2000 (whenever the arrangement was made);

(d) in relation to the charge to tax under section 93(10) of that Act, where securities are issued or transferred on sale, under terms there mentioned, on or after 21st March 2000;

(e) in relation to the charge to tax under section 96(8) of that Act, where securities are issued or transferred on sale, under terms there mentioned, on or after 21st March 2000.

Transfers between depositary receipt systems and clearance systems

134

(1) In Part III of the Finance Act 1986 (stamp duty), after section 72 insert—

(72A) (1) Where an instrument transfers relevant securities of a company incorporated in the United Kingdom between a depositary receipt system and a clearance system— (a) the provisions of section 67(2) to (5) or, as the case may be, section 70(2) to (5) above shall not apply, and (b) the stamp duty chargeable on the instrument is £5. (2) A transfer between a depositary receipt system and a clearance system means a transfer— (a) from (or to) a company that at the time of the transfer falls within section 67(6) above, and (b) to (or from) a company that at that time falls within section 70(6) above. (3) This section does not apply to a transfer from a clearance system (that is, from such a company as is mentioned in subsection (2)(b) above) if at the time of the transfer an election is in force under section 97A below in relation to the clearance services for the purposes of which the securities are held immediately before the transfer.

(2) In Part IV of the Finance Act 1986 (stamp duty reserve tax), after section 97A insert—

(97B) (1) There shall be no charge to tax under section 93 or 96 above where securities are transferred between a depositary receipt system and a clearance system. (2) A transfer between a depositary receipt system and a clearance system means a transfer— (a) from (or to) a company which at the time of the transfer falls within section 67(6) above, and (b) to (or from) a company which at that time falls within section 70(6) above. (3) This section does not apply to a transfer from a clearance system (that is, from such a company as is mentioned in subsection (2)(b) above) if at the time of the transfer an election is in force under section 97A above in relation to the clearance services for the purposes of which the securities are held immediately before the transfer.

(3) In sections 67(9), 70(9), 95(1) and 97(1) of the Finance Act 1986 (transfers between depositary receipt systems or between clearance systems), the words “and is resident in the United Kingdom" and “and is so resident" shall cease to have effect.

(4) In section 97A of that Act (clearance services: election for alternative system of charge), after subsection (12) add—

(13) Nothing in section 70(9) or 97(1) above has effect to prevent a charge to stamp duty or stamp duty reserve tax arising— (a) on a transfer to which subsection (5) above applies, or (b) on a deemed transfer under subsection (11) above.

(5) The amendments in this section have effect as follows—

(a) subsection (1), and subsections (3) and (4) as they apply for stamp duty purposes, apply in relation to instruments executed after the day on which this Act is passed;

(b) subsection (2), and subsections (3) and (4) as they apply for the purposes of stamp duty reserve tax, apply where the securities are transferred after that day.

Part V — Other taxes

Value added tax

Supplies to which reduced rate applies

135

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

Disposals of assets for which a VAT repayment is claimed

136

(1) In section 3(2) of the Value Added Tax Act 1994 (taxable persons and registration), for “Schedules 1 to 3" there shall be substituted “ Schedules 1 to 3A ”.

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

(3) In section 69(1)(a) of that Act (breaches of regulatory provisions), for “or paragraph 5 of Schedule 3" there shall be substituted “ , paragraph 5 of Schedule 3 or paragraph 5 of Schedule 3A ”.

(4) In section 73(3)(b) of that Act (failure to make returns etc.), for “or paragraph 6(2) or (3) of Schedule 3" there shall be substituted “ , paragraph 6(2) or (3) of Schedule 3 or paragraph 6(1) or (2) of Schedule 3A ”.

(5) In section 74(1)(c) of that Act (interest on VAT recovered or recoverable by assessment), for “under paragraph 8 of Schedule 3" there shall be substituted “ , under paragraph 8 of Schedule 3 or under paragraph 7 of Schedule 3A ”.

(6) In the following provisions of that Act—

(a) paragraph 1(4)(a) and (5) of Schedule 1 (registration in respect of taxable supplies); and

(b) paragraph 1(4) of Schedule 2 (registration in respect of supplies from other member States),

for “or paragraph 6(3) of Schedule 3" there shall be substituted “ , paragraph 6(3) of Schedule 3 or paragraph 6(2) of Schedule 3A ”.

(7) In paragraph 1(3) of Schedule 3 to that Act (registration in respect of acquisitions from other member States), for “or paragraph 6(2) of Schedule 2" there shall be substituted “ , paragraph 6(2) of Schedule 2 or paragraph 6(2) of Schedule 3A ”.

(8) After Schedule 3 to that Act there shall be inserted the Schedule 3A set out in Schedule 36 to this Act.

(9) In paragraph 5(5) of Schedule 4 to that Act (matters to be treated as a supply of goods or services), for the words from “under sections 25 and 26" to the end there shall be substituted—

(a) under sections 25 and 26, to credit for the whole or any part of the VAT on the supply, acquisition or importation of those goods or of anything comprised in them; or (b) under a scheme embodied in regulations made under section 39, to a repayment of VAT on the supply or importation of those goods or of anything comprised in them.

(10) Subsections (1) to (7) and (9) above have effect in relation to supplies made on or after 21st March 2000; and subsection (8) above and Schedule 36 to this Act have effect in relation to relevant supplies (within the meaning of Schedule 3A to that Act) made on or after that date.

Gold: penalty for failure to comply with record-keeping requirements etc

137

(1) Part IV of the Value Added Tax Act 1994 (administration, collection and enforcement) is amended as follows.

(2) After section 69 (breaches of regulatory provisions) insert—

(69A) (1) This section applies where a person fails to comply with a requirement of regulations under section 13(5)(a) or (b) of the Finance Act 1999 (gold: duties to keep records or provide information). Where this section applies, the provisions of section 69 do not apply. (2) A person who fails to comply with any such requirement is liable to a penalty not exceeding 17.5% of the value of the transactions to which the failure relates. (3) For the purposes of assessing the amount of any such penalty, the value of the transactions to which the failure relates shall be determined by the Commissioners to the best of their judgement and notified by them to the person liable. (4) No assessment of a penalty under this section shall be made more than 2 years after evidence of facts sufficient in the opinion of the Commissioners to justify the making of the assessment comes to their knowledge. (5) The reference in subsection (4) above to facts sufficient to justify the making of the assessment is to facts sufficient— (a) to indicate that there had been a failure to comply with any such requirement as is referred to in subsection (1) above, and (b) to determine the value of the transactions to which the failure relates. (6) A failure by any person to comply with any such requirement as is mentioned in subsection (1) above shall not give rise to a liability to a penalty under this section if the person concerned satisfies the Commissioners or, on appeal, a tribunal, that there is a reasonable excuse for the failure. (7) Where by reason of conduct falling within subsection (1) above a person— (a) is assessed to a penalty under section 60, or (b) is convicted of an offence (whether under this Act or otherwise), that conduct shall not also give rise to a penalty under this section.

(3) In section 70(1) of that Act (mitigation of penalties), for “or 67" substitute “ , 67 or 69A ”.

(4) In section 76(1) of that Act (assessment of amount due by way of penalty etc.), for “to 69" (in both places) substitute “ to 69A ”.

(5) In section 83 of that Act (appeals), in paragraph (n) for “59 to 69" substitute “ 59 to 69A ”.

Inheritance tax

138

(1) The Inheritance Tax Act 1984 is amended as follows.

(2) In section 13 (dispositions by close companies for benefit of employees), in subsection (4), after paragraph (b) insert

; or (c) if the trusts are those of an employee share ownership plan approved under Schedule 8 to the Finance Act 2000, of any power to appropriate shares to, or acquire shares on behalf of, individuals under the plan.

(3) In section 72 (property leaving employee trusts and newspaper trusts)—

(a) in subsection (2) after “subsection (4)" insert “ , (4A) ”, and

(b) after subsection (4) insert—

(4A) If the trusts are those of an employee share ownership plan approved under Schedule 8 to the Finance Act 2000, tax shall not be chargeable under this section by virtue of subsection (3)(b) above on an appropriation of shares to, or acquisition of shares on behalf of, an individual under the plan.

(4) In section 86 (trusts for benefit of employees), in subsection (3), after paragraph (b) insert

; or (c) the trusts on which the settled property is held are those of an employee share ownership plan approved under Schedule 8 to the Finance Act 2000.

Petroleum revenue tax

Operating expenditure incurred while safeguard relief applies

139

(1) After section 9 of the Oil Taxation Act 1975 insert—

(9A) (1) Subsections (2) and (3) below apply where— (a) operating expenditure is incurred by a participator in an oil field during a chargeable period to which section 9(1) of this Act applies (“the relevant chargeable period”); (b) a claim for the allowance of the expenditure is made under Schedule 5 or 6 for the claim period which coincides with the relevant chargeable period (“the relevant claim period”); and (c) the claim is made more than four months after the end of the relevant claim period. (2) The Board shall not allow the expenditure except to such extent (if any) as they consider necessary to secure that the participator’s overall liability to tax is no greater than it would have been if the claim had been allowed before the Board had made an assessment to tax or a determination on or in relation to the participator in respect of the field for the relevant chargeable period. (3) Any amounts of oil allowance which, if the claim had been allowed before the Board had made an assessment to tax or a determination on or in relation to the participator in respect of the field for the relevant chargeable period, would not have been utilised by him in that period, or any subsequent chargeable period, shall be disregarded for the purposes of section 8(6) of this Act. (4) Where— (a) the participator transfers the whole or part of his interest in the oil field to another person; and (b) Parts II and III of Schedule 17 to the Finance Act 1980 apply to the transfer, subsections (2) and (3) above shall have effect as if references to the participator included references to that other person. (5) In this section— - “acquisition”, in relation to an asset, includes acquisition of an interest in the asset; - “capital expenditure” means expenditure on the acquisition or construction of an asset which is to be used for any of the following purposes— 1. for ascertaining the extent or characteristics of any oil-bearing area wholly or partly included in the field, or what the reserves of oil of any such oil-bearing area are; 2. for winning oil from the field; 3. for transporting oil won from the field, whether to a place in the United Kingdom or to a place in another country; or 4. for the initial treatment or initial storage of oil won from the field; - “operating expenditure” means any expenditure other than capital expenditure. (6) Where a claim period is a period of twelve months, this section shall have effect as if— (a) that period were two separate claim periods of six months each; (b) any claim for that period under Schedule 5 or 6 were two separate claims, one for each of those separate periods; and (c) the operating expenditure to which that claim relates were apportioned between those separate periods and those separate claims in such manner as may be just and reasonable.

(2) This section has effect in relation to expenditure incurred on or after 21st March 2000.

Landfill tax

Rate

140

(1) In section 42 of the Finance Act 1996 (amount of landfill tax), in subsections (1)(a) and (2) for “£10" substitute “ £11 ”.

(2) This section has effect in relation to taxable disposals made, or treated as made, on or after 1st April 2000.

Disposals which are not taxable

141

(1) In section 62 of the Finance Act 1996 (regulations about taxable disposals) amend subsection (7) (limit on power to make regulations providing that a disposal is not taxable) as follows.

(2) For paragraph (a) substitute—

(a) the material comprised in the disposal is held temporarily pending one or more of the following— (i) the incineration or recycling of the material, or (ii) the removal of the material for use elsewhere, or (iii) the use of the material, if it is qualifying material within the meaning of section 42(3) above, for the restoration to use of the site at which the disposal takes place, or any part of that site, upon completion of waste disposal operations at the site, or as the case may be, that part of the site, or (iv) the sorting of the material with a view to its removal elsewhere or its eventual disposal, and

(3) In paragraph (b) for “the temporary disposal is made" substitute “ the material in question is held temporarily ”.

Secondary liability

142

(1) In section 60 of the Finance Act 1996 (which gives effect to Schedule 5 to the Act), after “penalties" insert “ , secondary liability ”.

(2) Accordingly the sidenote to that section becomes “Information, powers, penalties, secondary liability, etc".

(3) At the end of Schedule 5 to that Act (supplementary provisions relating to landfill tax) add the Part VIII set out in Schedule 37 to this Act.

(4) Subsection (3) has effect in relation to taxable disposals made on or after the day on which this Act is passed.

Part VI — Miscellaneous and supplementary provisions

Incentives for electronic communications

Power to provide incentives to use electronic communications

143

(1) Regulations may be made in accordance with Schedule 38 to this Act for providing incentives to use electronic communications.

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

Compliance

Offence of fraudulent evasion of income tax

144

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

Information about interest etc paid, credited or received

145

(1) In section 17 of the Taxes Management Act 1970 (interest paid or credited by banks etc without or after deduction of tax), subsections (4B) and (4C) shall cease to have effect.

(2) In subsection (5) of that section—

(a) for paragraph (c) there shall be substituted—

(c) that if a person is required— (i) to make and deliver a return under subsection (1) above; (ii) to include information in such a return under any provision made under paragraph (a) above; or (iii) to furnish information under any provision made under paragraph (b) above, and the notice under subsection (1) above specifies the form in which the return is to be made and delivered, or the information is to be included or furnished, the person shall make and deliver the return, or include or furnish the information, in that form;

;

and

(b) at the end there shall be inserted—

The further information required as mentioned in paragraph (a) or (b) above may include, in prescribed cases, the name and address of the person beneficially entitled to the interest paid or credited.

(3) After paragraph (a) of subsection (6) of that section there shall be inserted—

(aa) may make provision with respect to the furnishing of information by persons required— (i) to make and deliver a return under subsection (1) above; (ii) to include information in such a return under any provision made under subsection (5)(a) above; or (iii) to furnish information under any provision made under subsection (5)(b) above, including the inspection of books, documents and other records on behalf of the Board;

(4) In subsection (1) of section 18 of that Act (interest paid without or after deduction of tax)—

(a) for “by whom" there shall be substituted “ by or through whom ”; and

(b) for “who receives any such interest" there shall be substituted “ by whom any such interest is received ”.

(5) Subsections (3) and (3AA) of that section shall cease to have effect.

(6) In subsection (3A) of that section, after “interest paid" there shall be inserted “ or received ”.

(7) At the end of subsection (3B) of that section there shall be inserted—

The further information required as mentioned in paragraph (a) above may include, in prescribed cases, the name and address of the person beneficially entitled to the interest paid or received.

(8) After paragraph (a) of subsection (3C) of that section there shall be inserted—

(aa) may make provision with respect to the furnishing of information by persons required to furnish information under subsection (1) above, or under any provision made under subsection (3B)(a) above, including the inspection of books, documents and other records on behalf of the Board;

(9) For subsection (3D) of that section there shall be substituted—

(3D) For the purposes of this section interest shall be treated as received by any person if it is received by another person at his direction or with his consent. (3E) For the purposes of this section the following shall be treated as interest— (a) any dividend in respect of a share in a building society; (b) any amount to which a person holding a relevant discounted security is entitled on the redemption of that security; and (c) any foreign dividend. (3F) In subsection (3E)(b) above “relevant discounted security” has the meaning given by paragraph 3 of Schedule 13 to the Finance Act 1996. (3G) In subsection (3E)(c) above “foreign dividend” means any annual payment, interest or dividend payable out of, or in respect of the stocks, funds, shares or securities of— (a) a body of persons that is not resident in the United Kingdom, or (b) a government or public or local authority in a country outside the United Kingdom.

(10) Section 482A of Taxes Act 1988 (audit powers in relation to non-residents) shall cease to have effect.

(11) This section has effect in relation to amounts paid, credited or received on or after 6th April 2001.

International exchange of information: general

146

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

International exchange of information: inheritance tax

147

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

Use of minimum wage information

148

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

Orders for the delivery of documents

149

(1) After section 20B of the Taxes Management Act 1970 insert—

(20BA) (1) The appropriate judicial authority may make an order under this section if satisfied on information on oath given by an authorised officer of the Board— (a) that there is reasonable ground for suspecting that an offence involving serious fraud in connection with, or in relation to, tax is being, has been or is about to be committed, and (b) that documents which may be required as evidence for the purposes of any proceedings in respect of such an offence are or may be in the power or possession of any person. (2) An order under this section is an order requiring the person who appears to the authority to have in his possession or power the documents specified or described in the order to deliver them to an officer of the Board within— (a) ten working days after the day on which notice of the order is served on him, or (b) such shorter or longer period as may be specified in the order. For this purpose a “working day” means any day other than a Saturday, Sunday or public holiday. (3) Where in Scotland the information mentioned in subsection (1) above relates to persons residing or having places of business at addresses situated in different sheriffdoms— (a) an application for an order may be made to the sheriff for the sheriffdom in which any of the addresses is situated, and (b) where the sheriff makes an order in respect of a person residing or having a place of business in his own sheriffdom, he may also make orders in respect of all or any of the other persons to whom the information relates (whether or not they have an address within the sheriffdom). (4) Schedule 1AA to this Act contains provisions supplementing this section.

(2) After Schedule 1 to the Taxes Management Act 1970, insert the Schedule 1AA set out in Schedule 39 to this Act.

(3) In section 20BB of that Act (falsification etc. of documents)—

(a) in subsection (1)(a), after “above" insert “ or an order under section 20BA above ”;

(b) in subsection (3), after “notice is given" insert “ or the order is made ”; and

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

Search warrants: miscellaneous amendments

150

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

Provisions relating to government finance

Debt Management Account

151

In Schedule 5A to the National Loans Act 1968 (the Debt Management Account), in paragraph 11, after sub-paragraph (1) (excess of Account’s liabilities over its assets to be liability of National Loans Fund) insert—

(1A) The Treasury may pay from the National Loans Fund to the Debt Management Account an amount representing all or any of any excess mentioned in sub-paragraph (1) above, and if they do the liability there mentioned shall be extinguished or reduced accordingly.

National Savings Bank

152

(1) In section 4 of the National Savings Bank Act 1971 (deposits: limits and minimum balances), after subsection (3) insert—

(4) Regulations under section 2 of this Act may include any provision that may be included in an order under this section.

(2) In section 26 of that Act (regulations and orders etc.), for subsections (2) and (3) (parliamentary control of regulations under section 2 and orders under section 4) substitute—

(2) A statutory instrument containing— (a) regulations under section 2 of this Act, or (b) an order under section 4 of this Act, shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(3) If a draft of a statutory instrument containing an order under section 4 of that Act has been laid before Parliament, but the instrument has not been made, before the day on which this Act is passed, the instrument may be made either—

(a) as if section 26 of that Act had not been amended by this section, or

(b) in reliance on section 26(2) as substituted by this section.

The instrument shall be taken to be made as mentioned in paragraph (a) unless it states that it is made in reliance on section 26(2) as substituted by this section.

National savings certificates

153

(1) This section applies to a national savings certificate issued under section 12 of the National Loans Act 1968 if—

(a) it was purchased on or before 7th October 1999, and

(b) the fifth anniversary of its purchase falls after the day on which this Act is passed.

(2) The power of the Treasury (under the prospectus under which the certificate was issued) to alter or end the extension terms for the certificate shall have effect as if it included power for the Treasury to decide before the fifth anniversary of the certificate’s purchase that the extension terms for the certificate are to involve it (so far as not cashed in) undergoing automatic roll-over on that anniversary.

(3) Where a certificate undergoes automatic roll-over on any occasion, the Treasury has power to decide before the fifth anniversary of that occasion that the extension terms for the certificate are to involve it (so far as not cashed in) undergoing automatic roll-over on that anniversary.

(4) For the purposes of this section a certificate undergoes “automatic roll-over” on an occasion if during the period of 5 years beginning with that occasion the certificate (so far as not cashed in) will earn interest as though it were a national savings certificate—

(a) purchased on that occasion for a term of 5 years at a price equal to the value (rounded, if necessary, to the nearest penny) of the certificate on that occasion, and

(b) earning such interest (whether at fixed rates or at rates that give effect to index-linking or partly one and partly the other) as has been decided by the Treasury before that occasion.

(5) Subject to subsections (2) and (3), a certificate to which this section applies continues (so far as not cashed in) to be held on the terms of the prospectus under which it was issued.

However, any obligation of the Director of Savings to take steps to inform the holder of the certificate before the fifth anniversary of its purchase of what is to happen to the certificate after that anniversary extends to taking the corresponding steps in relation to the fifth anniversary of each occasion on which the certificate has undergone automatic roll-over.

(6) Nothing in this section shall be taken as prejudicing the rights of the holder of a certificate to which this section applies to apply at any time to cash in the certificate.

(7) References in this section to cashing in a certificate include reinvesting it.

Exchange Equalisation Account

154

(1) For section 4 of the Exchange Equalisation Account Act 1979 (examination and certification of the Account) substitute—

(4) (1) For each financial year in which the Account operates the Treasury shall prepare, in such form and on such basis as they may prescribe, accounts in relation to the transactions, assets and liabilities of the Account. (2) The Treasury shall send the accounts to the Comptroller and Auditor General not later than 30th November of the financial year following that to which the accounts relate. (3) The Comptroller and Auditor General shall examine and certify the accounts, issue a report on them and send the certified accounts and the report to the Treasury not later than 15th January of that year. (4) The Treasury shall lay the certified accounts and the report before each House of Parliament not later than 31st January of that year. (5) In certifying accounts under subsection (3) above the Comptroller and Auditor General shall state whether or not it is his opinion, having regard to his examination of the accounts, that— (a) the resources of the Account have been used in accordance with the provisions of this Act; (b) the transactions of the Account are in accordance with any relevant authority; and (c) the accounts have been prepared in the form, and on the basis, prescribed under subsection (1) above. (6) The Treasury may by order made by statutory instrument amend the date for the time being specified in any of subsections (2) to (4) above. (7) Before making an order under subsection (6) above the Treasury shall consult the Comptroller and Auditor General. (8) A statutory instrument containing an order under subsection (6) above shall be subject to annulment in pursuance of a resolution of the House of Commons. (9) In this section a reference to the use of resources is a reference to their expenditure, consumption or reduction in value.

(2) This section applies in relation to the operation of the Exchange Equalisation Account in the financial year ending 31st March 2001 and subsequent financial years.

Supplementary provisions

Interpretation

155

In this Act “the Taxes Act 1988” means the Income and Corporation Taxes Act 1988 and “ITTOIA 2005” means the Income Tax (Trading and Other Income) Act 2005 and “ITA 2007” means the Income Tax Act 2007.

Repeals

156

(1) The enactments mentioned in Schedule 40 to this Act (which include provisions that are spent or of no practical utility) are repealed to the extent specified in the third column of that Schedule.

(2) The repeals specified in that Schedule have effect subject to the commencement provisions and savings contained or referred to in the notes set out in that Schedule.

Short title

157

This Act may be cited as the Finance Act 2000.

SCHEDULE 1

Converting unleaded petrol into leaded petrol

1

(1) In paragraph 1(1) of Schedule 2A to the Hydrocarbon Oil Duties Act 1979 (converting unleaded petrol into leaded petrol), before paragraph (a) insert—

(aa) adding lead to unleaded petrol in respect of which duty has been charged at the rate specified in section 6(1A)(a);

(2) In paragraph 8 of that Schedule (rate for mixtures of light oil), for sub-paragraph (2) substitute—

(2) In the case of a mixture produced in contravention of paragraph 1 above, the rate is the rate in force under section 6(1A)(b) at the time the mixture is produced.

Converting unleaded petrol into higher octane unleaded petrol

2

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

Mixing different kinds of unleaded petrol

3

(1) After paragraph 2 of that Schedule insert—

(2A) (1) A mixture which is unleaded petrol is produced in contravention of this paragraph if the mixture is produced by mixing unleaded petrol of any two or more of the following descriptions— (a) petrol on which duty has been paid at the rate specified in section 6(1A)(a), (b) petrol in respect of which a rebate has been allowed under section 13A(1A)(b), (c) petrol in respect of which a rebate has been allowed under section 13A(1A)(a), where the mixture produced is petrol of a description subject to a higher effective rate of duty than one or more of the ingredients of the mixture. (2) The comparison required by sub-paragraph (1) shall be made by reference to the effective rates of duty in force at the time the mixture is produced. (3) This paragraph is subject to any direction given under paragraph 3.

(2) In paragraph 3 of that Schedule, for “paragraph 1 above or (as the case may be) paragraph 2 above" substitute “ paragraph 1, 2 or 2A above ”.

(3) In paragraph 8 of that Schedule, after sub-paragraph (3) insert—

(3A) In the case of a mixture produced in contravention of paragraph 2A above, the rate is— (a) in the case of a mixture that is higher octane unleaded petrol, the rate produced by deducting from the rate in force under section 6(1A)(b) at the time the mixture is produced the rebate which at that time is in force under section 13A(1A)(a); (b) in the case of a mixture that is neither higher octane unleaded petrol nor ultra low sulphur petrol, the rate produced by deducting from the rate in force under section 6(1A)(b) at the time the mixture is produced the rebate which at that time is in force under section 13A(1A)(b).

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

Interpretation

4

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

SCHEDULE 2

Introduction

1

The Betting and Gaming Duties Act 1981 is amended as follows.

Exceptions from requirement to be licensed

2

In section 21(3A) (types of amusement machine excepted from requirement to be licensed) in paragraph (b) (five-penny machine which is a small-prize machine) for “five-penny machine" substitute “ ten-penny machine ”.

Amusement machine licence duty

3

(1) In section 22(2) (definition of small-prize machines)—

(a) after “Act" insert “ (a) ”;

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

(b) an amusement machine is a medium-prize machine if it is a prize machine and the value or aggregate value of the benefits in money or money’s worth, which any player who is successful in a single game played by means of the machine may receive, can exceed £8 but cannot exceed £15.

(2) In section 22(3) (power of Commissioners to amend the sum mentioned in the definition of prize machines), for “the sum" substitute “ a sum ”.

Amount of duty

4

(1) In section 23(2) (amount of duty)—

(a) in paragraph (b) for “column 2, column 3 or column 4 of the Table" substitute “ Category A, Category B, Category C, Category D or Category E ”;

(b) for “the rate in column 2, the rate in column 3, or the rate in column 4" substitute “ the rate for the category of machine in question in column 2, 3, 4, 5 or 6 of the Table ”;

(1)	(2)	(3)	(4)	(5)	(6)
Period (in months) for which licence granted	Category A	Category B	Category C	Category D	Category E
	£	£	£	£	£
1	30	80	80	165	220
2	50	150	160	320	425
3	75	220	230	470	615
4	95	285	300	605	800
5	120	345	360	735	970
6	140	400	420	855	1,125
7	160	450	475	965	1,270
8	185	500	525	1,065	1,405
9	205	540	570	1,155	1,525
10	225	580	610	1,240	1,635
11	240	615	650	1,310	1,730
12	250	645	680	1,375	1,815

(2) At the end of section 23 insert—

(3) The machines comprised in each category referred to in this section are as follows— Category A: any machine which is not a gaming machine; Category B: any gaming machine which is a small-prize machine or five-penny machine; Category C: any gaming machine which is a medium-prize machine, unless it is also a five-penny machine; Category D: any gaming machine which is a ten-penny machine, unless it is also— (a) a five-penny machine, (b) a small-prize machine, or (c) a medium-prize machine; Category E: any machine which is not in any other category.

Meaning of amusement machine

5

(1) In section 25 (meaning of amusement machine), in paragraph (b) of subsection (1B) (meaning of video machine) omit “, other than one consisting only in a blank surface onto which light is projected”.

(2) In that section, in subsection (7) (application of provisions to a machine that falls to be treated as more than one machine) omit the word “or" at the end of paragraph (c) and after that paragraph insert—

(cc) medium-prize machines, (cd) ten-penny machines, or

Supplementary provisions

6

In section 26(2) (definitions), after the definition of “five-penny machine" insert—

“ten-penny machine" means an amusement machine which can only be played by the insertion into the machine of coins of a denomination, or aggregate denomination, not exceeding 10p;

Paragraphs 2 to 6: commencement

7

(1) Paragraphs 2 to 4, 5(2) and 6 shall have effect in relation to any amusement machine licence for which an application is received by the Commissioners of Customs and Excise after 4th August 2000.

(2) Paragraph 5(1) shall have effect on and after the day on which this Act is passed.

Seasonal licences: duration

8

(1) Amend paragraph 4 of Schedule 4 as follows.

(2) In sub-paragraph (2) (which provides for a seasonal licence to remain in force during October of the year for which it is granted) for the words from “during October of that year" to the end substitute

the provision of that number of relevant machines on the premises during the period in that year— (a) beginning with 1st October; and (b) ending with the Sunday before the first Monday in November.

(3) In sub-paragraph (8) (meaning of “winter period”) for “November to February" substitute “ the period beginning with the first Monday in November and ending with the last day of February ”.

(4) Sub-paragraph (2) applies in relation to any licence expressed to be granted for a period beginning with 1st April in 2000 or any subsequent year.

(5) Sub-paragraph (3) has effect for determining what was comprised in the winter period beginning in 1999, and for determining what is comprised in any subsequent winter period.

Unlicensed amusement machines: duty chargeable

9

After section 24 insert—

(24A) Schedule 4A to this Act (which provides for the recovery of amusement machine licence duty in relation to unlawfully unlicensed machines) shall have effect.

10

(1) After Schedule 4 insert—

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Finance Act 2000

Foreign exchange gains and losses: use of local currency

106

Insurance

General insurance reserves

107

Overseas life assurance business

108

Insurance business: apportionment rules

109

Miscellaneous

Rent factoring

110

Payments under deduction of tax

111

UK public revenue dividends: deduction of tax

112

Tax treatment of expenditure on production or acquisition of films

113

Part IV — Stamp duty and Stamp duty reserve tax

Stamp duty

Rates: conveyance or transfer on sale

114

Rates: duty on lease chargeable by reference to rent

115

Rate of duty on seven year leases

116

Power to vary stamp duties

117

Land transferred etc for other property

118

Transfer of land to connected company

119

Exceptions from section 119

120

Grant of lease to connected company

121

Marketable securities transferred etc for exempt property

122

Transfer of property between associated companies: Great Britain

123

Transfer of property between associated companies: Northern Ireland

124

Grant of leases etc between associated companies

125

Future issues of stock

126

Company acquisition reliefs: redeemable shares

127

Surrender of leases

128

Abolition of duty on instruments relating to intellectual property

129

Transfers to registered social landlords etc

130

Relief for certain instruments executed before this Act has effect

131

The Northern Ireland Assembly Commission

132

Stamp duty and Stamp duty reserve tax

Loan capital where return bears inverse relationship to results

133

Transfers between depositary receipt systems and clearance systems

134

Part V — Other taxes

Value added tax

Supplies to which reduced rate applies

135

Disposals of assets for which a VAT repayment is claimed

136

Gold: penalty for failure to comply with record-keeping requirements etc

137

Inheritance tax

Treatment of employee share ownership trusts

138

Petroleum revenue tax

Operating expenditure incurred while safeguard relief applies

139

Landfill tax

Rate