Office of Public Sector Information
PART IV continued CHAPTER II continued
Notwithstanding anything in section 349 of the Taxes Act 1988 or any other provision of the Tax Acts, a qualifying company shall not be required, on making a qualifying payment, to deduct out of it any sum representing an amount of income tax on it.
(1) In a case where—
(a) at any time, a currency contract held by a qualifying company becomes a qualifying contract by virtue of section 147(2) above, and
(b) at that time, it is held for the purposes of a trade or part of a trade carried on by the company,
subsection (4) of section 153 above shall have effect in relation to the contract and the company as if section 147(2) above applied for the purposes of this Chapter except those of that subsection.
(2) In a case where—
(a) at any time in an accounting period of a qualifying company, a currency contract held by the company becomes a qualifying contract by virtue of section 147(2) above, and
(b) at all times in the period when the contract is so held, it is held otherwise than for the purposes of a trade or part of a trade carried on by the company,
section 158 above shall have effect in relation to the contract and the period as if subsections (2) and (4) were omitted.
(1) In section 434A(1) of the Taxes Act 1988 (limitations on loss relief and group relief), for the words from “under” to “Part X” there shall be substituted the following paragraphs—
“(a) under Chapter II (loss relief) or Chapter IV (group relief) of Part X, or
(b) under Chapter II of Part II of the [1993 c. 34.] Finance Act 1993 so far as it has effect in relation to losses treated as non-trading losses for the purposes of section 160 of the Finance Act 1994,”.
(2) In Schedule 27 to that Act (distributing funds) in paragraph 5 (United Kingdom equivalent profits) the following sub-paragraph shall be substituted for sub-paragraph (2A)—
“(2A) In applying sub-paragraph (1) above the effect of the following shall be ignored, namely—
(a) sections 125 to 133 of the [1993 c. 34.] Finance Act 1993 (exchange gains and losses), and
(b) sections 159 and 160 of, and paragraph 1 of Schedule 18 to, the Finance Act 1994 (treatment of profits and losses on interest rate and currency contracts).”
(1) In this Chapter—
“appointed day” has the meaning given by section 147(4) above;
“bank” means any of the following—
the Bank of England;
any institution authorised under the [1987 c. 22.] Banking Act 1987; and
a European authorised institution which has lawfully established a branch in the United Kingdom for the purpose of accepting deposits;
“commencement day” has the meaning given by section 147(4) above;
“currency contract” and “currency option” shall be construed in accordance with section 150 above;
“deposit” has the same meaning as in the [1987 c. 22.] Banking Act 1987;
“European authorised institution” has the same meaning as in the [S.I. 1992/3218.] Banking Coordination (Second Council Directive) Regulations 1992;
“financial trader” means any of the following—
an authorised person under Chapter III of Part I of the [1986 c. 60.] Financial Services Act 1986;
an exempted person under section 43 of that Act;
a European authorised institution which has lawfully established a branch in the United Kingdom for the purpose of carrying on investment business; and
any person not falling within paragraphs (a) to (c) above who is approved by the Board for the purposes of this paragraph;
“inspector” includes any officer of the Board;
“insurance company” means a company to which Part II of the [1982 c. 50.] Insurance Companies Act 1982 applies;
“interest rate contract” and “interest rate option” shall be construed in accordance with section 149 above;
“investment business” has the same meaning as in the [1986 c. 60.] Financial Services Act 1986;
“mutual trading company” means a company carrying on any business of mutual trading or mutual insurance or other mutual business;
“qualifying company” has the meaning given by section 154 above;
“qualifying contract” has the meaning given by section 147(1) above;
“qualifying payment” shall be construed in accordance with section 153 above.
(2) For the purposes of this Chapter—
(a) a company becomes entitled to rights or subject to duties under an interest rate contract or option, or a currency contract or option, when it becomes party to the contract or option; and
(b) a company holds such a contract or option at a particular time if it is then entitled to rights or subject to duties under it;
and it is immaterial for the purposes of paragraph (b) above when the rights or duties fall to be exercised or performed.
(3) Any provision of this Chapter other than section 167 above which requires any amount (the relevant amount) to be deducted from amount A or, as the case may require, added to amount B shall be construed as requiring the following deductions or additions to be made—
(a) where amount A is not less than the relevant amount, a deduction from amount A of an amount equal to the relevant amount;
(b) where amount A is less than the relevant amount but is more than nil—
(i) a deduction from amount A of an amount equal to so much of the relevant amount as may be necessary to reduce amount A to nil, and
(ii) an addition to amount B of an amount equal to the remainder of the relevant amount;
(c) where amount A is nil, an addition to amount B of an amount equal to the relevant amount.
(4) Subsection (3) above shall be read as applying equally to any such provision which requires any amount to be deducted from amount B or, as the case may be, added to amount A, and for that purpose shall have effect with such modifications as may be requisite.
(5) In this Chapter expressions which are not defined or otherwise explained but are used in Chapter II of Part II of the [1993 c. 34.] Finance Act 1993 (exchange gains and losses) have the same meanings as in that Chapter.
(6) The Treasury may by order amend any of sections 149 to 153 above; and any such order may—
(a) make corresponding amendments to section 126 of the [1993 c. 34.] Finance Act 1993;
(b) make consequential amendments to such of the provisions of this Chapter or Chapter II of Part II of that Act as relate to currency contracts; and
(c) contain such other consequential provisions, and such supplementary, incidental or transitional provisions, as appear to the Treasury to be necessary or expedient.
(1) For subsection (1) of section 8 of the Management Act (personal return) there shall be substituted the following subsections—
“(1) For the purpose of establishing the amounts in which a person is chargeable to income tax and capital gains tax for a year of assessment, he may be required by a notice given to him by an officer of the Board—
(a) to make and deliver to the officer, on or before the day mentioned in subsection (1A) below, a return containing such information as may reasonably be required in pursuance of the notice, and
(b) to deliver with the return such accounts, statements and documents, relating to information contained in the return, as may reasonably be so required.
(1A) The day referred to in subsection (1) above is—
(a) the 31st January next following the year of assessment, or
(b) where the notice under this section is given after the 31st October next following the year, the last day of the period of three months beginning with the day on which the notice is given.
(1B) In the case of a person who carries on a trade, profession, or business in partnership with one or more other persons, a return under this section shall include each amount which, in any relevant statement, is stated to be equal to his share of any income, loss or charge for the period in respect of which the statement is made.
(1C) In subsection (1B) above “relevant statement” means a statement which, as respects the partnership, falls to be made under section 12AB of this Act for a period which includes, or includes any part of, the year of assessment or its basis period.”
(2) For subsection (1) of section 8A of the Management Act (trustee’s return) there shall be substituted the following subsections—
“(1) For the purpose of establishing the amounts in which a trustee of a settlement, and the settlors and beneficiaries, are chargeable to income tax and capital gains tax for a year of assessment, an officer of the Board may by a notice given to the trustee require the trustee—
(a) to make and deliver to the officer, on or before the day mentioned in subsection (1A) below, a return containing such information as may reasonably be required in pursuance of the notice, and
(b) to deliver with the return such accounts, statements and documents, relating to information contained in the return, as may reasonably be so required;
and a notice may be given to any one trustee or separate notices may be given to each trustee or to such trustees as the officer thinks fit.
(1A) The day referred to in subsection (1) above is—
(a) the 31st January next following the year of assessment, or
(b) where the notice under this section is given after the 31st October next following the year, the last day of the period of three months beginning with the day on which the notice is given.”
For section 9 of the Management Act there shall be substituted the following section—
(1) Subject to subsection (2) below, every return under section 8 or 8A of this Act shall include an assessment (a self-assessment) of the amounts in which, on the basis of the information contained in the return, the person making the return is chargeable to income tax and capital gains tax for the year of assessment.
(2) A person shall not be required to comply with subsection (1) above if he makes and delivers his return for a year of assessment—
(a) on or before the 30th September next following the year, or
(b) where the notice under section 8 or 8A of this Act is given after the 31st July next following the year, within the period of two months beginning with the day on which the notice is given.
(3) Where, in making and delivering a return, a person does not comply with subsection (1) above, an officer of the Board shall if subsection (2) above applies, and may in any other case—
(a) make the assessment on his behalf on the basis of the information contained in the return, and
(b) send him a copy of the assessment so made;
and references in the following provisions of this Act to a person’s self-assessment include references to an assessment made on a person’s behalf under this subsection.
(4) Subject to subsection (5) below—
(a) at any time before the end of the period of nine months beginning with the day on which a person’s return is delivered, an officer of the Board may by notice to that person so amend that person’s self-assessment as to correct any obvious errors or mistakes in the return (whether errors of principle, arithmetical mistakes or otherwise); and
(b) at any time before the end of the period of twelve months beginning with the filing date, a person may by notice to an officer of the Board so amend his self-assessment as to give effect to any amendments to his return which he has notified to such an officer.
(5) No amendment of a self-assessment may be made under subsection (4) above at any time during the period—
(a) beginning with the day on which an officer of the Board gives notice of his intention to enquire into the return, and
(b) ending with the day on which the officer’s enquiries into the return are completed.
(6) In this section and section 9A of this Act “the filing date” means the day mentioned in section 8(1A) or, as the case may be, section 8A(1A) of this Act.”
After section 9 of the Management Act there shall be inserted the following section—
(1) An officer of the Board may enquire into—
(a) the return on the basis of which a person’s self-assessment was made under section 9 of this Act, or
(b) any amendment of that return on the basis of which that assessment has been amended by that person,
if, before the end of the period mentioned in subsection (2) below, he gives notice in writing to that person of his intention to do so.
(2) The period referred to in subsection (1) above is—
(a) in the case of a return delivered or amendment made on or before the filing date, the period of twelve months beginning with that date;
(b) in the case of a return delivered or amendment made after that date, the period ending with the quarter day next following the first anniversary of the day on which the return or amendment was delivered or made;
and the quarter days for the purposes of this subsection are 31st January, 30th April, 31st July and 31st October.
(3) A return or amendment which has been enquired into under subsection (1) above shall not be the subject of a further notice under that subsection.”
(1) In subsection (1) of section 11 of the Management Act (return of profits), after the words “as may”, in both places where they occur, there shall be inserted the word “reasonably”.
(2) In subsection (1A) of that section, after the words “a company may”, in both places where they occur, there shall be inserted the word “reasonably”.
(3) After subsection (2) of that section there shall be inserted the following subsections—
“(2A) In the case of a company which carries on a trade, profession or business in partnership with one or more other persons, a return under this section shall include each amount which, in any relevant statement, is stated to be equal to its share of any income, loss or charge for the period in respect of which the statement is made.
(2B) In subsection (2A) above “relevant statement” means a statement which, as respects the partnership, falls to be made under section 12AB of this Act for a period which includes, or includes any part of, the period in respect of which the return is required.”
After section 11 of the Management Act there shall be inserted the following section—
(1) Every return under section 11 of this Act for an accounting period shall include an assessment (a self-assessment) of the amount in which, on the basis of the information contained in the return, the company is chargeable to corporation tax for that period.
(2) Subject to subsection (3) below—
(a) at any time before the end of the period of nine months beginning with the day on which a company’s return is delivered, an officer of the Board may by notice to the company so amend the company’s self-assessment as to correct any obvious errors or mistakes in the return (whether errors of principle, arithmetical mistakes or otherwise); and
(b) at any time before the end of the period of twelve months beginning with the filing date, a company may by notice to an officer of the Board so amend its self-assessment as to give effect to any amendments to its return which it has notified to such an officer.
(3) No amendment of a self-assessment may be made under subsection (2) above at any time during the period—
(a) beginning with the day on which an officer of the Board gives notice of his intention to enquire into the return, and
(b) ending with the day on which the officer’s enquiries into the return are completed.
(4) In this section and section 11AB of this Act “the filing date” means the day mentioned in section 11(4) of this Act.”
After section 11AA of the Management Act there shall be inserted the following section—
(1) An officer of the Board may enquire into—
(a) the return on the basis of which a company’s self-assessment was made under section 11AA of this Act, or
(b) any amendment of that return on the basis of which that assessment was amended under subsection (2)(b) of that section,
if, before the end of the period mentioned in subsection (2) below, he gives notice in writing to the company of his intention to do so.
(2) The period referred to in subsection (1) above is—
(a) in the case of a return delivered or amendment made on or before the filing date, the period of twelve months beginning with that date;
(b) in the case of a return delivered or amendment made after that date, the period ending with the quarter day next following the first anniversary of the day on which the return or amendment was delivered or made;
and the quarter days for the purposes of this subsection are 31st January, 30th April, 31st July and 31st October.
(3) A return or amendment which has been enquired into under subsection (1) above shall not be the subject of a further notice under that subsection.”
After section 12 of the Management Act there shall be inserted the following section—
(1) Where a trade, profession or business is carried on by two or more persons in partnership, for the purpose of facilitating—
(a) the assessment to income tax for a year of assessment, and
(b) the assessment to corporation tax for any period,
of each partner who is liable to be so assessed, an officer of the Board may act under subsection (2) or (3) below (or both).
(2) An officer of the Board may by a notice given to the partners require such person as is identified in accordance with rules given with the notice—
(a) to make and deliver to the officer in respect of such period as may be specified in the notice, on or before such day as may be so specified, a return containing such information as may reasonably be required in pursuance of the notice, and
(b) to deliver with the return such accounts and statements as may reasonably be so required.
(3) An officer of the Board may by notice given to any partner require the partner—
(a) to make and deliver to the officer in respect of such period as may be specified in the notice, on or before such day as may be so specified, a return containing such information as may reasonably be required in pursuance of the notice, and
(b) to deliver with the return such accounts and statements as may reasonably be so required;
and a notice may be given to any one partner or separate notices may be given to each partner or to such partners as the officer thinks fit.
(4) In the case of a partnership which includes one or more individuals, the day specified in a notice under subsection (2) or (3) above shall not be earlier than—
(a) the 31st January next following the year of assessment concerned, or
(b) where the notice under this section is given after the 31st October next following the year, the last day of the period of three months beginning with the day on which the notice is given.
(5) In the case of a partnership which includes one or more companies, the day specified in a notice under subsection (2) or (3) above shall not be earlier than—
(a) the first anniversary of the end of the relevant period, or
(b) where the notice under this section is given more than nine months after the end of the relevant period, the last day of the period of three months beginning with the day on which the notice is given;
and the relevant period for the purposes of this subsection and subsection (6) below is the period in respect of which the return is required.
(6) Every return under this section shall include—
(a) a declaration of the name, residence and tax reference of each of the persons who have been partners—
(i) for the whole of the relevant period, or
(ii) for any part of that period,
and, in the case of a person falling within sub-paragraph (ii) above, of the part concerned; and
(b) a declaration by the person making the return to the effect that it is to the best of his knowledge correct and complete.
(7) Every return under this section shall also include, if the notice under subsection (2) or (3) above so requires—
(a) with respect to any disposal of partnership property during a period to which any part of the return relates, the like particulars as if the partnership were liable to tax on any chargeable gain accruing on the disposal, and
(b) with respect to any acquisition of partnership property, the particulars required under section 12(2) of this Act.
(8) A notice under this section may require different information, accounts and statements for different periods or in relation to different descriptions of source of income.
(9) Notices under this section may require different information, accounts and statements in relation to different descriptions of partnership.
(10) In this section “residence”, in relation to a company, means its registered office.”
After section 12AA of the Management Act there shall be inserted the following section—
(1) Every return under section 12AA of this Act shall include a statement (a partnership statement) of the following amounts, namely—
(a) in the case of each period of account ending within the period in respect of which the return is made—
(i) the amount of income or loss from each source which, on the basis of the information contained in the return, has accrued to or has been sustained by the partnership for that period, and
(ii) the amount of each charge which, on that basis, was a charge on the income of the partnership for that period; and
(b) in the case of each such period and each of the partners, the amount which, on that basis, is equal to his share of that income, loss or charge.
(2) Subject to subsection (3) below—
(a) at any time before the end of the period of nine months beginning with the day on which a person’s return is delivered, an officer of the Board may by notice to that person so amend that person’s partnership statement as to correct any obvious errors or mistakes in the return (whether errors of principle, arithmetical mistakes or otherwise); and
(b) at any time before the end of the period of twelve months beginning with the filing date, a person may by notice to an officer of the Board so amend his partnership statement as to give effect to any amendments to his return which he has notified to such an officer.
(3) No amendment of a partnership statement may be made under subsection (2) above at any time during the period—
(a) beginning with the day on which an officer of the Board gives notice of his intention to enquire into the return, and
(b) ending with the day on which the officer’s enquiries into the return are completed.
(4) Where a partnership statement is amended under subsection (2) above, the officer shall by notice to the partners so amend their self-assessments under section 9 or 11AA of this Act as to give effect to the amendments of the partnership statement.
(5) In this section—
“filing date” means the day specified in the notice under subsection (2) or, as the case may be, subsection (3) of section 12AA of this Act;
“period of account”, in relation to a partnership, means any period for which accounts are drawn up.”
After section 12AB of the Management Act there shall be inserted the following section—
(1) An officer of the Board may enquire into—
(a) the return on the basis of which a person’s partnership statement was made under section 12AB of this Act, or
(b) any amendment of that return on the basis of which that statement has been amended by that person,
if, before the end of the period mentioned in subsection (2) below, he gives notice in writing of his intention to do so to that person or any successor of that person.
(2) The period referred to in subsection (1) above is—
(a) in the case of a return delivered or amendment made on or before the filing date, the period of twelve months beginning with that date;
(b) in the case of a return delivered or amendment made after that date, the period ending with the quarter day next following the first anniversary of the day on which the return or amendment was delivered or made;
and the quarter days for the purposes of this subsection are 31st January, 30th April, 31st July and 31st October.
(3) The giving of notice under subsection (1) above at any time shall be deemed to include the giving of notice under section 9A(1) or, as the case may be, section 11AB(1) of this Act to each partner who—
(a) at that time, has made a return under section 9 or 11 of this Act, or
(b) at any subsequent time, makes such a return.
(4) A return or amendment which has been enquired into under subsection (1) above shall not be the subject of a further notice under that subsection.
(5) In this section “the filing date” means the day specified in the notice under subsection (2) or, as the case may be, subsection (3) of section 12AA of this Act.
(6) In this Act “successor”, in relation to a person who—
(a) has made and delivered a return under section 12AA of this Act, but
(b) is no longer a partner or is otherwise no longer available,
means such other partner who may at any time be nominated for the purposes of this subsection by the majority of the partners at that time, and “predecessor” and “successor”, in relation to a person so nominated, shall be construed accordingly.”
Immediately before section 20 of the Management Act there shall be inserted the following section—
(1) This section applies where an officer of the Board gives notice under section 9A(1), 11AB(1) or 12AC(1) of this Act to any person (the taxpayer) of his intention to enquire into—
(a) the return on the basis of which the taxpayer’s self-assessment or partnership statement was made, or
(b) any amendment of that return on the basis of which that assessment or statement has been amended by the taxpayer.
(2) For the purpose of enquiring into the return or amendment, the officer may at the same or any subsequent time by notice in writing require the taxpayer, within such time (which shall not be less than 30 days) as may be specified in the notice—
(a) to produce to the officer such documents as are in the taxpayer’s possession or power and as the officer may reasonably require for the purpose of determining whether and, if so, the extent to which the return is incorrect or incomplete or the amendment is incorrect, and
(b) to furnish the officer with such accounts or particulars as he may reasonably require for that purpose.
(3) To comply with a notice under subsection (2) above, copies of documents may be produced instead of originals; but—
(a) the copies must be photographic or otherwise by way of facsimile; and
(b) if so required by a notice in writing given by the officer, in the case of any document specified in the notice, the original must be produced for inspection by him within such time (which shall not be less than 30 days) as may be specified in the notice.
(4) The officer may take copies of, or make extracts from, any document produced to him under subsection (2) or (3) above.
(5) A notice under subsection (2) above does not oblige the taxpayer to produce documents or furnish accounts or particulars relating to the conduct of any pending appeal by him.
Finance Act 1994