Office of Public Sector Information
PART IV continued CHAPTER V continued
(4) In section 108 of that Act (election for carry-back)—
(a) for the words “the inspector within two years after” there shall be substituted the words “an officer of the Board within one year from the 31st January next following”; and
(b) the words from “and, in any such case” to the end shall cease to have effect.
(5) For subsection (5) of section 534 of that Act (relief for copyright payments) there shall be substituted the following subsections—
“(5) A claim under this section with respect to any payment to which it applies by virtue only of subsection (4)(b) above—
(a) shall have effect as a claim with respect to all qualifying payments, that is to say, all such payments in respect of the copyright in the same work which are receivable by the claimant, whether before or after the claim; and
(b) where qualifying payments are so receivable in two or more years of assessment, shall be treated for the purposes of the Management Act as if it were two or more separate claims, each in respect of the qualifying payments receivable in one of those years.
(5A) A claim under this section may be made at any time within one year from the 31st January next following—
(a) in the case of such a claim as is mentioned in subsection (5) above, the latest year of assessment in which a qualifying payment is receivable; and
(b) in the case of any other claim, the year of assessment in which the payment in question is receivable.
(5B) For the purposes of subsections (5) and (5A) above, a payment shall be regarded as receivable in the year of assessment in computing the amount of the profits or gains of which it would, but for this section, be included.”
(6) After subsection (6) of that section there shall be inserted the following subsection—
“(6A) In the case of persons carrying on a trade, profession or business in partnership, no claim may be made under any of the following provisions, namely—
(a) this section and section 535;
(b) section 537 as it has effect in relation to this section and section 535; and
(c) section 537A and section 538,
in respect of any payment or sum receivable on or after 6th April 1996; and nothing in any of those provisions shall be construed as applying to profits chargeable to corporation tax.”
(7) In section 535 of that Act (relief where copyright sold after ten years or more), the following shall cease to have effect, namely—
(a) in subsection (4), the words “Subject to subsection (5) below”;
(b) subsections (5) and (7); and
(c) in subsection (6), the words from “unless the author” to the end.
(8) After subsection (8) of that section there shall be inserted the following subsection—
“(8A) No claim for relief made under subsection (1) above shall be allowed unless it is made within one year from the 31st January next following the year of assessment in which the payment is receivable; and for the purposes of this subsection a payment shall be regarded as receivable in the year of assessment in computing the amount of the profits or gains of which it would, but for this section, be included.”
(9) For subsection (5) of section 537A of that Act (relief for payments in respect of designs) there shall be substituted the following subsections—
“(5) A claim under this section with respect to any payment to which it applies by virtue only of subsection (4)(b) above—
(a) shall have effect as a claim with respect to all qualifying payments, that is to say, all such payments in respect of rights in the design in question which are receivable by the claimant, whether before or after the claim; and
(b) where qualifying payments are so receivable in two or more years of assessment, shall be treated for the purposes of the Management Act as if it were two or more separate claims, each in respect of the qualifying payments receivable in one of those years.
(5A) A claim under this section may be made at any time within one year from the 31st January next following—
(a) in the case of such a claim as is mentioned in subsection (5) above, the latest year of assessment in which a qualifying payment is receivable; and
(b) in the case of any other claim, the year of assessment in which the payment in question is receivable.
(5B) For the purposes of subsections (5) and (5A) above, a payment shall be regarded as receivable in the year of assessment in computing the amount of the profits or gains of which it would, but for this section, be included.”
(10) After subsection (3) of section 538 of that Act (relief for painters, sculptors and other artists) there shall be inserted the following subsection—
“(4) No claim for relief made under subsection (1) above shall be allowed unless it is made within one year from the 31st January next following the year of assessment in which the payment is receivable; and for the purposes of this subsection a payment shall be regarded as receivable in the year of assessment in computing the amount of the profits or gains of which it would, but for this section, be included.”
(11) This section (except subsections (1)(b) and (6) above) and Schedule 17 to this Act have effect as respects claims made (or deemed to be made) in relation to the year 1996-97 or later years of assessment.
(12) Subsection (1)(b) above has effect as respects claims made in relation to the year 1997-98 or later years of assessment.
(1) Nothing in section 42 of the [1970 c. 9.] Taxes Management Act 1970 (procedure for making claims etc.), or Schedule 1A to that Act (claims etc. not included in returns), shall apply in relation to—
(a) any claim under subsection (6)(b) of section 54 (medical insurance relief) of the [1989 c. 26.] Finance Act 1989 (“the 1989 Act”); or
(b) any claim under subsection (5)(b) of section 32 (vocational training relief) of the [1991 c. 31.] Finance Act 1991 (“the 1991 Act”).
(2) In section 54(6)(b) of the 1989 Act and section 32(5)(b) of the 1991 Act, after the words “on making a claim” there shall be inserted the words “in accordance with regulations”.
(3) In section 57(1) of the 1989 Act (medical insurance relief: supplementary), after paragraph (a) there shall be inserted the following paragraph—
“(aa) make provision for and with respect to appeals against a decision of an officer of the Board or the Board with respect to a claim under section 54(6)(b) above;”.
(4) In section 33(1) of the 1991 Act (vocational training relief: supplementary), after paragraph (a) there shall be inserted the following paragraph—
“(aa) make provision for and with respect to appeals against a decision of an officer of the Board or the Board with respect to a claim under section 32(5)(b) above;”.
(5) Subsection (1)(a) above shall not apply in relation to claims made before the coming into force of regulations made by virtue of section 57(1)(aa) of the 1989 Act.
(6) Subsection (1)(b) above shall not apply in relation to claims made before the coming into force of regulations made by virtue of section 33(1)(aa) of the 1991 Act.
(1) Section 42 of, and Schedule 1A to, the Taxes Management Act 1970, as they have effect—
(a) for the purposes of income tax and capital gains tax, as respects the year 1996-97 and subsequent years of assessment, and
(b) for the purposes of corporation tax, as respects accounting periods ending on or after the day appointed under section 199 of the [1994 c. 9.] Finance Act 1994 for the purposes of Chapter III of Part IV of that Act (self-assessment management provisions),
shall be amended in accordance with the following provisions of this section.
(2) In subsection (7) of section 42 (which contains a list of provisions, claims under which must be made in accordance with subsection (6)) the following words shall cease to have effect, that is to say—
(a) in paragraph (a), “62A,” and “401,”; and
(b) in paragraph (c), “30,”, “33,”, “48, 49,” and “124A,”.
(3) In subsection (10) of that section (section 42 to apply in relation to elections and notices as it applies in relation to claims) the words “and notices” shall cease to have effect.
(4) In subsection (11) of that section (Schedule 1A to apply as respects any claim, election or notice made otherwise than in a return under section 8 etc) for the words “, election or notice” there shall be substituted “or election”.
(5) In paragraph 1 of Schedule 1A (claims etc. not included in returns), in the definition of “claim”, for the words “means a claim, election or notice” there shall be substituted “means a claim or election”.
(1) Section 110 of the [1995 c. 4.] Finance Act 1995 (interest on overdue tax) shall be deemed to have been enacted with the insertion after subsection (3) of the following subsection—
“(4) So far as it relates to partnerships whose trades, professions or businesses were set up and commenced before 6th April 1994, subsection (1) above has effect as respects the year 1997-98 and subsequent years of assessment.”
(2) In subsection (3) of section 86 of the [1970 c. 9.] Taxes Management Act 1970 (which was substituted by the said section 110), for the words “section 93” there shall be substituted the words “section 92”.
(3) In Schedule 19 to the [1994 c. 9.] Finance Act 1994, paragraph 23 (which is superseded by the said section 110) shall cease to have effect.
Schedule 18 to this Act (which amends enactments relating to overdue tax or excessive payments by the Board) shall have effect.
Schedule 19 to this Act (which, for purposes connected with self-assessment, further amends provisions relating to claims and enquiries) shall have effect.
(1) Schedule 20 to this Act (which in connection with self-assessment modifies enactments by virtue of which a decision or other action affecting an assessment may be or is required to be taken by the Board, or one of their officers, before the making of the assessment) shall have effect.
(2) Subject to subsection (3) below, the amendments made by that Schedule shall have effect—
(a) for the purposes of income tax and capital gains tax, as respects the year 1996-97 and subsequent years of assessment; and
(b) for the purposes of corporation tax, as respects accounting periods ending on or after the day appointed under section 199 of the Finance Act 1994 for the purposes of Chapter III of Part IV of that Act (self-assessment management provisions).
(3) Paragraphs 22 and 23 of that Schedule shall have effect in relation to shares issued on or after 6th April 1996.
(1) Schedule 21 to this Act (which in connection with self-assessment modifies enactments which impose time limits on the making of claims, elections, adjustments and assessments and the giving of notices, and enactments which provide for the giving of notice to the inspector) shall have effect.
(2) Subject to subsections (3) to (5) below, the amendments made by that Schedule shall have effect—
(a) for the purposes of income tax and capital gains tax, as respects the year 1996-97 and subsequent years of assessment; and
(b) for the purposes of corporation tax, as respects accounting periods ending on or after the day appointed under section 199 of the [1994 c. 9.] Finance Act 1994 for the purposes of Chapter III of Part IV of that Act (self-assessment management provisions).
(3) The amendments made to the [1990 c. 1.] Capital Allowances Act 1990 and the Finance Act 1994 by that Schedule, in their application to trades, professions or vocations set up and commenced before 6th April 1994, shall (so far as relating to income tax) have effect as respects the year 1997-98 and subsequent years of assessment.
(4) The Capital Allowances Act 1990, as it has effect for the year 1996-97 in relation to trades, professions or vocations set up and commenced before 6th April 1994, shall (so far as relating to income tax) have effect as respects that year with the following modifications, that is to say, as if—
(a) in sections 25(3)(c), 30(1), 31(3) and 33(1) and (4), for “two years after the end of” there were substituted “the first anniversary of the 31st January next following”;
(b) in section 37(2)(c), for “more than two years after the end of the chargeable period or its basis period” there were substituted “later than the first anniversary of the 31st January next following the year of assessment in which ends the basis period”;
(c) in section 53(2), for “before the expiry of the period of two years beginning at the end of” there were substituted “on or before the first anniversary of the 31st January next following”;
(d) in section 68(5), for “two years after the end of that period” there were substituted “the first anniversary of the 31st January next following the year of assessment in which the relevant period ends”;
(e) in section 68(9A)(b), for “two years after the end of” there were substituted “the first anniversary of the 31st January next following the year of assessment in which ends”;
(f) in section 129(2), for “not more than two years after the end of” there were substituted “on or before the first anniversary of the 31st January next following”;
(g) in section 141(3), for “the inspector not later than two years after the end of” there were substituted “an officer of the Board on or before the first anniversary of the 31st January next following”.
(5) Section 118 of the [1994 c. 9.] Finance Act 1994, as it has effect for the year 1996-97 in relation to trades, professions or vocations set up and commenced before 6th April 1994, shall (so far as relating to income tax) have effect as respects that year as if, in subsection (3), for “two years after the end of” there were substituted “the first anniversary of the 31st January next following”.
Schedule 22 to this Act (which makes provision, in connection with self-assessment, about appeals) shall have effect.
(1) Schedule 23 to this Act shall have effect.
(2) The amendments made by that Schedule shall have effect as respects return periods ending on or after the appointed day for the purposes of Chapter III of Part IV of the [1994 c. 9.] Finance Act 1994.
(3) In subsection (2) above “return period” means—
(a) so far as relating to Schedule 13 to the Taxes Act 1988, a period for which a return is required to be made under paragraph 1 of that Schedule; and
(b) so far as relating to Schedule 16 to that Act, a period for which a return is required to be made under paragraph 2 of that Schedule.
Schedule 24 to this Act (which makes provision, in connection with self-assessment, in relation to accounting periods) shall have effect.
Schedule 25 to this Act (which makes provision, in connection with self-assessment, about surrenders of advance corporation tax) shall have effect.
(1) In section 101 of the [1992 c. 12.] Taxation of Chargeable Gains Act 1992 (transfer of company’s assets to investment trust) after subsection (1) there shall be inserted—
“(1A) Any chargeable gain or allowable loss which, apart from this subsection, would accrue to the company on the sale referred to in subsection (1) above shall be treated as accruing to the company immediately before the end of the last accounting period to end before the beginning of the accounting period mentioned in that subsection.”
(2) This section shall have effect as respects accounting periods ending on or after the day appointed under section 199 of the [1994 c. 9.] Finance Act 1994 for the purposes of Chapter III of Part IV of that Act (self-assessment management provisions).
(1) In subsection (4) of section 152 of the Taxation of Chargeable Gains Act 1992 (roll-over relief)—
(a) after the word “making” there shall be inserted the words “or amending”; and
(b) after the word “assessments”, in the second place where it occurs, there shall be inserted the words “or amendments”.
(2) After section 153 of that Act there shall be inserted the following section—
(1) This section applies where a person carrying on a trade who for a consideration disposes of, or of his interest in, any assets (“the old assets”) declares, in his return for the chargeable period in which the disposal takes place—
(a) that the whole or any specified part of the consideration will be applied in the acquisition of, or of an interest in, other assets (“the new assets”) which on the acquisition will be taken into use, and used only, for the purposes of the trade;
(b) that the acquisition will take place as mentioned in subsection (3) of section 152; and
(c) that the new assets will be within the classes listed in section 155.
(2) Until the declaration ceases to have effect, section 152 or, as the case may be, section 153 shall apply as if the acquisition had taken place and the person had made a claim under that section.
(3) The declaration shall cease to have effect as follows—
(a) if and to the extent that it is withdrawn before the relevant day, or is superseded before that day by a valid claim made under section 152 or 153, on the day on which it is so withdrawn or superseded; and
(b) if and to the extent that it is not so withdrawn or superseded, on the relevant day.
(4) On the declaration ceasing to have effect in whole or in part, all necessary adjustments—
(a) shall be made by making or amending assessments or by repayment or discharge of tax; and
(b) shall be so made notwithstanding any limitation on the time within which assessments or amendments may be made.
(5) In this section “the relevant day” means—
(a) in relation to capital gains tax, the third anniversary of the 31st January next following the year of assessment in which the disposal of, or of the interest in, the old assets took place;
(b) in relation to corporation tax, the fourth anniversary of the last day of the accounting period in which that disposal took place.
(6) Subsections (6), (8), (10) and (11) of section 152 shall apply for the purposes of this section as they apply for the purposes of that section.”
(3) In section 175 of that Act (replacement of business assets by members of a group)—
(a) in subsections (2A) and (2B), after the words “Section 152” there shall be inserted the words “or 153”; and
(b) in subsection (2C), for the words “Section 152 shall not” there shall be substituted the words “Neither section 152 nor section 153 shall”.
(4) In section 246 of that Act (time of disposal or acquisition), the words from “or, if earlier” to the end shall cease to have effect.
(5) In subsection (5)(b) of section 247 of that Act (roll-over relief on compulsory acquisition), for the words “subsection (3)” there shall be substituted the words “subsections (3) and (4)”.
(6) After that section there shall be inserted the following section—
(1) This section applies where a person who disposes of land (“the old land”) to an authority exercising or having compulsory powers declares, in his return for the chargeable period in which the disposal takes place—
(a) that the whole or any specified part of the consideration for the disposal will be applied in the acquisition of other land (“the new land”);
(b) that the acquisition will take place as mentioned in subsection (3) of section 152; and
(c) that the new land will not be land excluded from section 247(1)(c) by section 248.
(2) Until the declaration ceases to have effect, section 247 shall apply as if the acquisition had taken place and the person had made a claim under that section.
(3) For the purposes of this section, subsections (3) to (5) of section 153A shall apply as if the reference to section 152 or 153 were a reference to section 247 and the reference to the old assets were a reference to the old land.
(4) In this section “land” and “authority exercising or having compulsory powers” have the same meaning as in section 247.”
(1) Paragraph 3 of Schedule 8 to the [1992 c. 12.] Taxation of Chargeable Gains Act 1992 (premiums for leases) shall be amended as follows.
(2) In sub-paragraph (2), for the words “for the period” to the end there shall be substituted the words “, being a premium which—
(a) is due when the sum is payable by the tenant; and
(b) where the sum is payable in lieu of rent, is in respect of the period in relation to which the sum is payable.”
(3) In sub-paragraph (3), for the words “for the period” to the end there shall be substituted the words “, being a premium which—
(a) is due when the sum is payable by the tenant; and
(b) is in respect of the period from the time when the variation or waiver takes effect to the time when it ceases to have effect.”
(4) For sub-paragraphs (4) to (6) there shall be substituted the following sub-paragraphs—
“(4) Where under sub-paragraph (2) or (3) above a premium is deemed to have been received by the landlord, that shall not be the occasion of any recomputation of the gain accruing on the receipt of any other premium, and the premium shall be regarded—
(a) in the case of a premium deemed to have been received for the surrender of a lease, as consideration for a separate transaction which is effected when the premium is deemed to be due and consists of the disposal by the landlord of his interest in the lease; and
(b) in any other case, as consideration for a separate transaction which is effected when the premium is deemed to be due and consists of a further part disposal of the freehold or other asset out of which the lease is granted.
(5) If under sub-paragraph (2) or (3) above a premium is deemed to have been received by the landlord, otherwise than as consideration for the surrender of the lease, and the landlord is a tenant under a lease the duration of which does not exceed 50 years, this Schedule shall apply—
(a) as if an amount equal to the amount of that premium deemed to have been received had been given by way of consideration for the grant of the part of the sublease covered by the period in respect of which the premium is deemed to have been paid; and
(b) as if that consideration were expenditure incurred by the sublessee and attributable to that part of the sublease under section 38(1)(b).”
(5) This section has effect as respects sums payable on or after 6th April 1996.
(1) After section 580 of the Taxes Act 1988 there shall be inserted the following sections—
(1) This section applies (subject to subsection (7)(b) below) in the case of any such annual payment under an insurance policy as—
(a) apart from this section, would be brought into charge under Case III of Schedule D; or
(b) is equivalent to a description of payment brought into charge under Case III of that Schedule but (apart from this section) would be brought into charge under Case V of that Schedule.
(2) Subject to the following provisions of this section, the annual payment shall be exempt from income tax if—
(a) it constitutes a benefit provided under so much of an insurance policy as provides insurance against a qualifying risk;
(b) the provisions of the policy by which insurance is provided against that risk are self-contained (within the meaning of section 580B);
(c) the only annual payments relating to that risk for which provision is made by that policy are payments in respect of a period throughout which the relevant conditions of payment are satisfied; and
(d) at all times while the policy has contained provisions relating to that risk, those provisions have been of a qualifying type.
(3) For the purposes of this section and section 580B a qualifying risk is any risk falling within either of the following descriptions, that is to say—
(a) a risk that the insured will (or will in any specified way) become subject to, or to any deterioration in a condition resulting from, any physical or mental illness, disability, infirmity or defect;
(b) a risk that circumstances will arise as a result of which the insured will cease to be employed or will cease to carry on any trade, profession or vocation carried on by him.
(4) For the purposes of this section the relevant conditions of payment are satisfied in relation to payments under an insurance policy for so long as any of the following continues, that is to say—
(a) an illness, disability, infirmity or defect which is insured against by the relevant part of the policy, and any related period of convalescence or rehabilitation;
(b) any period during which the insured is, in circumstances insured against by the relevant part of the policy, either unemployed or not carrying on a trade, profession or vocation;
(c) any period during which the income of the insured (apart from any benefits under the policy) is less, in circumstances so insured against, than it would have been if those circumstances had not arisen; or
(d) any period immediately following the end, as a result of the death of the insured, of any period falling within any of paragraphs (a) to (c) above;
and in this subsection “the relevant part of the policy” means so much of it as relates to insurance against one or more risks mentioned in subsection (3) above.
(5) For the purposes of subsection (2)(d) above provisions relating to a qualifying risk are of a qualifying type if they are of such a description that their inclusion in any policy of insurance containing provisions relating only to a comparable risk would (apart from any reinsurance) involve the possibility for the insurer that a significant loss might be sustained on the amounts payable by way of premiums in respect of the risk, taken together with any return on the investment of those amounts.
(6) An annual payment shall not be exempt from income tax under this section if it is paid in accordance with a contract the whole or any part of any premiums under which have qualified for relief for the purposes of income tax by being deductible either—
(a) in the computation of the insured’s income from any source; or
(b) from the insured’s income.
(7) Where a person takes out any insurance policy wholly or partly for the benefit of another and that other person pays or contributes to the payment of the premiums under that policy, then to the extent only that the benefits under the policy are attributable, on a just and reasonable apportionment, to the payments or contributions made by that other person—
(a) that other person shall be treated for the purposes of this section and section 580B as the insured in relation to that policy;
(b) this section shall have effect in relation to those benefits, so far as comprised in payments to that other person or his spouse, as if the reference in subsection (1)(a) above to Case III of Schedule D included a reference to Schedule E; and
(c) subsection (6) above shall have effect as if the references to the premiums under the policy were references only to the payments or contributions made by that other person in respect of the premiums.
(8) Where—
(a) payments are made to or in respect of any person (“the beneficiary”) under any insurance policy (“the individual policy”),
(b) the rights under the individual policy in accordance with which the payments are made superseded, with effect from the time when another policy ((“the employer’s policy”) ceased to apply to that person, any rights conferred under that other policy,
(c) the employer’s policy is or was a policy entered into wholly or partly for the benefit of persons holding office or employment under any person (“the employer”) against risks falling within subsection (3)(a) above,
(d) the individual policy is one entered into in pursuance of, or in accordance with, any provisions contained in the employer’s policy, and
(e) the beneficiary has ceased to hold office or employment under the employer as a consequence of the occurrence of anything insured against by so much of the employer’s policy as related to risks falling within subsection (3)(a) above,
this section shall have effect as if the employer’s policy and the individual policy were one policy.
(9) In the preceding provisions of this section references to the insured, in relation to any insurance policy, include references to—
(a) the insured’s spouse; and
(b) in the case of a policy entered into wholly or partly for purposes connected with the meeting of liabilities arising from an actual or proposed transaction identified in the policy, any person on whom any of those liabilities will fall jointly with the insured or his spouse.
(10) References in this section and section 580B to insurance against a risk include references to any insurance for the provision (otherwise than by way of indemnity) of any benefits against that risk, and references to what is insured against by a policy shall be construed accordingly.
Finance Act 1996