Office of Public Sector Information
PART I continued
(1) Where property, rights, liabilities and functions of a relevant port authority are transferred under section 2 above to a company (“the chargeable company”), a levy under this section shall be chargeable in respect of any gain accruing to the company on a chargeable disposal of—
(a) relevant land; or
(b) a relevant interest in land;
made within the period of ten years beginning with the date on which the company ceases to be a wholly-owned subsidiary of the body which immediately before the transfer was the relevant port authority in question (“the levy period”).
(2) For the purposes of subsection (1) above—
(a) land is relevant land if—
(i) it is transferred by the transfer; or
(ii) it belongs both immediately before and immediately after the transfer to a transferred 51 per cent. subsidiary; and
(b) an interest in land is a relevant interest if—
(i) it is transferred by the transfer;
(ii) it belongs both immediately before and immediately after the transfer to a transferred 51 per cent. subsidiary; or
(iii) it is an interest of any specified description in land which is relevant land or in land in which a relevant interest within sub-paragraph (i) or (ii) above subsists at the time of the transfer.
(3) The levy shall be charged—
(a) at the rate of twenty-five per cent. on the amount of the gain, in the case of a disposal made within the first five years of the levy period;
(b) at the rate of twenty per cent. on the amount of the gain, in the case of a disposal made within the sixth or seventh year of that period; and
(c) at the rate of ten per cent. on the amount of the gain, in the case of a disposal made during the remainder of that period.
(4) The levy shall be paid by the chargeable company to the appropriate Minister.
(5) There is a disposal of land or an interest in land for the purposes of this section and section 18 below if there would be such a disposal for the purposes of the 1979 Act.
(6) In addition, there is such a disposal for the purposes of this section in any case where—
(a) there would be such a disposal for the purposes of the 1979 Act by virtue of section 278(3) or (3C) of the [1970 c. 10.] Income and Corporation Taxes Act 1970 (deemed disposal of assets by company leaving a group) if the relevant six-year limit were disregarded; and
(b) the operative time falls within the levy period.
(7) For the purposes of subsection (6) above—
(a) “the relevant six-year limit” means—
(i) in relation to section 278(3), subsection (1)(b) of that section; and
(ii) in relation to section 278(3C), the words “within six years of that time” in paragraph (a) of that subsection; and
(b) “the operative time” means—
(i) in relation to section 278(3), the time when the company in question ceases for the purposes of that section to be a member of the group referred to in subsection (1) of that section; and
(ii) in relation to section 278(3C), the time when the company in question ceases to satisfy the conditions specified in subsection (3D) of that section.
(8) The Secretary of State may by order make provision—
(a) for determining when and by whom any disposal of land or an interest in land is to be regarded for the purposes of this section as being made;
(b) specifying the descriptions of disposal which are to be chargeable disposals for the purposes of this section;
(c) for determining in what circumstances a gain is to be regarded for the purposes of this section as accruing to the chargeable company on such a disposal and the amount of any gain so accruing; and
(d) for the administration, assessment, collection and recovery of levy under this section;
and the order may contain such supplementary, incidental or consequential provisions as appear to the Secretary of State to be appropriate.
(9) Without prejudice to the generality of subsection (8) above, the provision authorised by that subsection includes in particular provision—
(a) for treating a disposal of land or an interest in land as being made at any specified time notwithstanding that it is not the time at which the disposal takes place, or is to be regarded as taking place, for the purposes of the 1979 Act (including that Act as it applies by virtue of subsection (6) above);
(b) for treating a gain as accruing to the chargeable company in specified circumstances on a disposal of land or an interest in land notwithstanding that no actual benefit accrues to that company on the disposal (including in particular circumstances where the disposal is made by a person other than that company);
(c) for treating a disposal made in specified circumstances as having been made for consideration of any specified description;
(d) with respect to the principles, assumptions and methods to be applied in making any valuation of land or an interest in land for the purpose of determining the amount of any gain accruing on a disposal;
(e) with respect to the payment of interest at such rate as may be specified, or as may be determined by or under the order, in respect of any amount of levy not paid within the period during which it is payable in accordance with the order;
(f) imposing penalties (including continuing penalties) in respect of contraventions of provisions of any order under this section; and
(g) applying for any purposes of the order any statutory provisions relating to corporation tax on chargeable gains with such modifications as may be specified.
(10) The provision referred to in subsection (9)(a) above includes provision for treating a disposal as being made at a time falling within the levy period notwithstanding that for the purposes there mentioned it takes place, or is to be regarded as taking place, before the beginning of that period.
(11) An order under this section may make different provision for different cases to which it applies (and in particular for different descriptions of disposals).
(12) In this section—
(a) “specified” means specified in an order under this section; and
(b) “transferred 51 per cent. subsidiary” means, in relation to a transfer under section 2 above, a company which—
(i) immediately before the transfer is an effective 51 per cent. subsidiary of the relevant port authority in question; and
(ii) by virtue of the transfer becomes such a subsidiary of the chargeable company.
(13) In subsection (12)(b) above “effective 51 per cent. subsidiary” has the meaning that it would have for the purposes of sections 272 to 281 of the [1970 c. 10.] Income and Corporation Taxes Act 1970 by virtue of subsections (1E) and (1F) of section 272 if the word “or” were substituted for the word “and” between paragraphs (a) and (b) of subsection (1E) (by virtue of which, for a company to be an effective 51 per cent. subsidiary of another company, that other company must meet conditions both as to entitlement to profits and as to entitlement to assets on a winding up).
(1) The Secretary of State may, with the consent of the Treasury, by order substitute for any percentage for the time being specified in section 17(3) above such other percentage as may be specified in the order.
(2) Subject to subsections (3) and (4) below, any amount payable or paid by any company in respect of levy under that section on any disposal shall be allowable as a deduction from the consideration in the computation under the 1979 Act of the gain accruing to that company or to any other person on the disposal.
References below in this section, in relation to any disposal on which levy under that section is chargeable, to the levy amount are references to any amount so payable or paid in respect of the levy.
(3) Subsection (2) above shall not apply where—
(a) apart from the deduction of the levy amount an allowable loss would accrue to the company or to any other person on the disposal; or
(b) such a loss would so accrue if the levy amount were deducted;
but in the latter case the person making the disposal shall be treated for the purposes of corporation tax on chargeable gains as if the disposal had been made for a consideration of such amount as would secure that neither a gain nor a loss would accrue to that person.
(4) Subsection (2) above shall not apply where a disposal on which levy under section 17 above is chargeable is one which, by virtue of section 267(1) or 273(1) of the [1970 c. 10.] Income and Corporation Taxes Act 1970 (company reconstructions and amalgamations and transfers within groups of companies), is treated as made for a consideration (“the original consideration”) giving rise to neither a gain nor a loss.
(5) Where in any case within subsection (4) above the original consideration is less than the market value at the time of the disposal of the land or interest in land which is the subject of the disposal, the consideration for which the disposal is treated by the provision in question as being made shall be increased by—
(a) the levy amount; or
(b) the excess of that market value over the original consideration;
whichever is the less.
(6) Except as provided above in this section, no amount payable or paid in respect of levy under section 17 above or interest on such levy shall be allowed as a deduction or otherwise taken into account in computing any income, profits or losses for any tax purposes.
(7) There shall be paid into the Consolidated Fund—
(a) all payments received by the appropriate Minister in respect of levy under section 17 above;
(b) all interest paid to the appropriate Minister by virtue of any provision of an order under that section; and
(c) all penalties paid to the appropriate Minister by virtue of any such provision.
(8) In this section “allowable loss” has the same meaning as in the 1979 Act; and in section 17 above and this section—
(a) “the 1979 Act” means the [1979 c. 14.] Capital Gains Tax Act 1979; and
(b) references to an interest in land include any right in, over or in relation to land.
(1) The power under subsection (2) below—
(a) is exercisable by a body which is a relevant port authority in any case where that body proposes to form or has formed a company in pursuance of section 1 above; and
(b) is exercisable by a body which was such an authority immediately before the transfer under section 2 above to a company formed by that body of its property, rights, liabilities and functions;
and references below in this section, in relation to any such body, to the relevant company are references to the company it proposes to form or has formed (as the case may require).
(2) The body concerned may on such terms as it thinks fit agree with any persons who at the time of the agreement qualify for assistance from it under this section—
(a) to indemnify those persons in respect of the whole or any part of any expenditure to which subsection (4) below applies; or
(b) to discharge on their behalf the whole or any part of any liability to which that subsection applies.
(3) For the purposes of subsection (2) above persons qualify for assistance under this section from any body if—
(a) each of them satisfies the employment condition as regards assistance from that body;
(b) they have formulated a proposal for maximising participation by employees of the relevant company in ownership of its equity share capital; and
(c) they appear to the body concerned to have a reasonable prospect of securing that the objective of the proposal is achieved.
(4) This subsection applies to any expenditure or liability of the persons concerned incurred wholly and exclusively for the purposes of the proposal mentioned in subsection (3)(b) above.
(5) Where in accordance with subsection (3) above different persons would qualify for assistance under this section from any body in respect of different proposals, only such of them as appear to the body concerned to have the best prospect of securing that the objective mentioned in paragraph (b) of that subsection is achieved shall be regarded as qualifying for such assistance.
(6) A person satisfies the employment condition as regards assistance under this section from any body—
(a) so long as it is a relevant port authority, if he is employed by it; and
(b) after it has ceased to be such an authority, if he is employed by the relevant company.
(1) In this Part—
“accounting year”, in relation to a relevant port authority, means any period in respect of which the authority are required under section 42 of the [1964 c. 40.] Harbours Act 1964 to prepare annual statements of accounts;
“the appropriate Minister” means, in relation to any body which is or immediately before a transfer under section 2 above was a relevant port authority, the Minister concerned with the relevant harbour or harbours or, where there is more than one Minister so concerned, both or all of those Ministers acting jointly; and
“the Gazette” means—
(a) in relation to the publication of a notice under section 9(3)(a) or 12(3) affecting a harbour in England or Wales, the London Gazette; and
(b) in relation to the publication of such a notice affecting a harbour in Scotland, the Edinburgh Gazette.
(2) For the purposes of the definition of “the appropriate Minister” in subsection (1) above—
(a) the Minister concerned with a harbour—
(i) in the case of a fishery harbour in England, is the Minister of Agriculture, Fisheries and Food; and
(ii) in any other case, is the Secretary of State; and
(b) a harbour is a relevant harbour in relation to any such body as is there mentioned if it is one for which that body is or immediately before a transfer under section 2 above was the harbour authority.
In paragraph (a)(i) above “fishery harbour” has the same meaning as in section 21 of the [1951 c. 30.] Sea Fish Industry Act 1951.
(3) In this Part—
(a) references, in relation to a notice under section 9(3)(a) or 12(3) affecting a harbour, to publication of the notice by Gazette and local advertisement are references to publication—
(i) in the Gazette; and
(ii) in each of two successive weeks, in one or more local newspapers circulating in the locality where the harbour is situated; and
(b) references, in relation to such a notice, to the date of the first local advertisement are references to the date of the first publication of the notice in a local newspaper circulating in the locality where the harbour is situated.
(4) References in this Part to—
(a) the scheme;
(b) the successor company; and
(c) the authority;
are explained in section 2(4).
(5) For the purposes of this Part the time when a disposal of securities or of rights to require the issue of securities of a company is made shall be determined as it would fall to be determined in accordance with section 27 of the [1979 c. 14.] Capital Gains Tax Act 1979 for the purposes of tax on chargeable gains.
(6) For the purposes of this section a notice under section 9(3)(a) or 12(3) relating to a scheme for the purposes of a proposed transfer under section 2 above of property, rights, liabilities and functions of a relevant port authority is to be regarded as affecting any harbour for which that authority are the harbour authority.
Ports Act 1991