Finance Act 1971

SCHEDULES

Section 11.

SCHEDULE 1 Customs Procedures etc.

Entry outwards of export goods not within section 47 of the Act of 1952

1 (1) This paragraph applies to all goods to which section 47 of the Act of 1952 (entry outwards of certain dutiable etc. goods) does not apply.

(2) Subject to paragraphs 4 and 13 below, before any goods to which this paragraph applies are exported or shipped for exportation, the exporter shall deliver to the proper officer an entry outwards of the goods under this paragraph.

(3) The form of entries under this paragraph, the particulars to be contained therein and the manner of their delivery shall be such as the Commissioners may from time to time direct.

(4) Directions under this paragraph may, if the Commissioners think fit, contain provisions authorising the delivery in circumstances specified in the directions of provisional entries under this paragraph, and imposing requirements on persons delivering such entries as to the subsequent delivery of perfected entries, and the obtaining and retention for a specified period of receipts for perfected entries.

(5) Where the particulars contained in any entry delivered under this paragraph are in any way incorrect or inaccurate, the person delivering it shall notify the proper officer of any necessary correction within a period of fourteen days beginning with the day of delivery.

(6) The Commissioners may give directions under this paragraph imposing on persons specified in the directions requirements as to the giving of information with respect to, and the furnishing of documents in connection with, goods which have been entered under this paragraph but are not exported or shipped for exportation within a specified period beginning with the day of delivery of the entry.

(7) Goods shall not be treated by virtue of anything in this paragraph as goods to which section 47 of the Act of 1952 applies.

Provisional entries under section 47 of the Act of 1952

2 Directions under section 47 of the Act of 1952 may, if the Commissioners think fit, contain provisions authorising the delivery in circumstances specified in the directions of provisional entries under that section, and imposing requirements on persons delivering such entries as to the subsequent delivery of perfected entries, and the obtaining and retention for a specified period of receipts for perfected entries.

Register of exporters, and assignment of identifying numbers

3 The Commissioners shall have power—

(a) to maintain a register of exporters,

(b) to enter therein any person applying for registration and appearing to them to be concerned in the exportation of goods and to satisfy such requirements for registration as they may think fit to impose.

(c) to give directions imposing requirements on registered persons (and, in particular, requirements as to the keeping of records and accounts and the giving of access thereto) as a condition of their remaining on the register,

(d) to assign to registered persons numbers for use for export purposes, and

(e) to cancel the registration of any person if it appears to them that he has failed to comply with any direction under this paragraph or that there is other reasonable cause for cancellation.

Alternative to entry in the case of registered exporters

4 (1) If the Commissioners think fit so to direct, goods within paragraph (c) or (d) of section 47(5) of the Act of 1952 may be shipped for exportation without entry under that section, and goods to which paragraph 1 above applies may be shipped for exportation without entry under that paragraph, if, before shipment, a number assigned under paragraph 3 above to a person concerned in the exportation of the goods, together with such particulars of the goods and other information relating thereto as the directions may require, is furnished in accordance with the directions to a person specified therein.

(2) Directions under this paragraph may contain provision enabling the Commissioners to exclude shipments of goods from their operation in particular cases by giving notice to that effect in accordance with the directions.

Specifications under section 49 of the Act of 1952

5 (1) Section 49 of the Act of 1952 (duty of exporters to deliver specifications of goods not required to be entered under section 47 of the Act) shall apply to any goods which are shipped for exportation without entry under the said section 47 by virtue of directions given under paragraph 4 above, and shall not apply to any goods to which paragraph 1 above applies unless they are shipped for exportation without entry under that paragraph by virtue of directions so given.

(2) Where any goods are shipped for exportation without entry by virtue of directions given under paragraph 4 above, the person whose number was furnished in relation to the goods for the purpose of their shipment without entry shall, if it was so furnished with his consent, be the exporter of the goods for the purposes of the said section 49.

(3) The Commissioners may give a direction under this paragraph requiring any person delivering a specification under the said section 49 in relation to goods shipped for exportation to obtain a receipt therefor in accordance with the direction and to retain it for a period specified therein.

(4) The said section 49 shall be amended as follows—

(a) in subsection (1), for the words “six days” (period for delivery of specification) there shall be substituted the words “fourteen days ”,

(b) in subsection (2), for the words “five pounds” (penalty for failure to deliver specification) there shall be substituted the words “£100 ” , and

(c) in subsection (3), for the words “five pounds ” (penalty for failure to correct wrong specification, etc.) there shall be substituted the words “£10 ”, and for the words from “either himself ” to the end there shall be substituted the words “notifies the proper officer of any necessary correction within a period of fourteen days beginning with the day of delivery ”.

(5) In consequence of the amendment made by sub-paragraph (4)(a) above, section 11(5) of the [1966 c. 18.] Finance Act 1966 (application of the said section 49 to goods exported by pipe-line) shall also be amended by substituting for the words “six days ” the words “fourteen days ”.

New provisions about putting export goods alongside for loading

6 (1) This paragraph applies to all goods which are required to be entered outwards before shipment for exportation, whether under section 47 of the Act of 1952 or under paragraph 1 above.

(2) The Commissioners may make regulations—

(a) prohibiting, as from such date as is specified in the regulations, the putting of any goods to which this paragraph applies alongside any ship or aircraft for loading for exportation except under a written authority in that behalf obtained in accordance with, and in such form as is specified in, the regulations, and

(b) requiring any person putting goods alongside a ship or aircraft under one or more such authorities to endorse the authority or each of the authorities with such particulars as are specified in the regulations, and to deliver the endorsed authority or authorities, together with a written statement of the number of authorities delivered, to the proper officer within such period as is so specified.

Miscellaneous provisions as to information, documentation, etc.

7 The Commissioners may give directions under this paragraph imposing on persons specified in the directions requirements as to the giving of information with respect to, or the furnishing of documents in connection with, goods exported, or intended to be exported, in any such vehicle or container as is specified in the directions, or by such other means, or in accordance with any such commercial procedure, as is so specified.

8 The Commissioners may give directions under this paragraph providing that, before any goods are shipped for exportation, a number identifying the goods in compliance with the directions is to be given in accordance with the directions by and to such persons as are specified in the directions.

9 Section 54(1)(c) of the Act of 1952 (under which the Commissioners may make regulations requiring the delivery of a manifest of all cargo carried in an exporting ship) shall be amended by inserting—

(a) after the word “manifest”, the words “containing such particulars as the Commissioners may direct”, and

(b) after the word “ship ”, the words “and, if the Commissioners so direct, such other documents relating to the cargo as are specified in the direction ”.

10 Sections 47(2) and 86(3) of the Act of 1952 (goods to be treated as entered when entry signed by proper officer) shall cease to have effect.

Penalties

11 (1) If any goods of which entry is required under paragraph 1 of this Schedule are exported or shipped for exportation before delivery of an entry in respect thereof, the exporter shall be liable to a penalty of £100.

(2) Any person who fails to comply with sub-paragraph (5) of the said paragraph 1 in the case of any entry shall be liable to a penalty of £10.

(3) Any person who, being required by directions given under or by virtue of paragraph 1, 2 or 5 of this Schedule to obtain and retain for a specified period a receipt for any entry or specification, fails to produce a receipt complying with the directions on demand made by a proper officer at any time during that period shall be liable to a penalty of £100.

(4) If any person, for the purpose of enabling any goods to be shipped without entry by virtue of directions given under paragraph 4 of this Schedule, furnishes a number other than one for the time being assigned to him under paragraph 3 of this Schedule, then, unless the number is one for the time being assigned to another person under that paragraph and is furnished with that person's consent, he shall be liable to a penalty of £100.

(5) Any person who contravenes or fails to comply with any regulations made under this Schedule, or with any directions given under or by virtue of any provision of this Schedule other than paragraph 3, shall be liable to a penalty of £100.

Supplementary

12 (1) Regulations or directions made or given under any provision of this Schedule may make different provision for different circumstances.

(2) Directions given under any such provision may be varied or revoked by subsequent directions thereunder.

13 The Commissioners may relax any requirement imposed by or under this Schedule as they think fit in relation to any goods.

14 (1) The provisions of this Schedule shall be treated for all purposes as included in Part II of the Act of 1952.

(2) Without prejudice to section 11(4) of the [1966 c. 18.] Finance Act 1966 (application of customs Acts to exportation by pipe-line) paragraph 6(2) of this Schedule shall apply to the charging of goods into a pipe-line for exportation as it applies to the putting of goods alongside a ship or aircraft for loading for exportation.

15 Paragraphs 1, 2, 4 to 8 and 11 of this Schedule shall come into operation on such day as the Commissioners may by order made by statutory instrument appoint, and different days may be so appointed for different paragraphs.

Section 20.

SCHEDULE 2 Annuities for the Self-Employed and Others

Approval of contract for dependants or for life insurance

1 After section 226 of the Taxes Act insert—

“226A Contracts for dependants or life insurance.

(1) The Board may approve under this section—

(a) a contract the main object of which is the provision of an annuity for the wife or husband of the individual, or for any one or more dependants of the individual,

(b) a contract the sole object of which is the provision of a lump sum on the death of the individual before he attains the age of 70, being a lump sum payable to his personal representatives.

(2) The Board shall not approve the contract unless it appears to them that it is made by the individual with a person lawfully carrying on in the United Kingdom the business of granting annuities on human life.

(3) The Board shall not approve a contract under subsection (1)(a) above unless it appears to them to satisfy all the following conditions, that is—

(a) that any annuity payable to the wife or husband or dependant of the individual commences on the death of the individual,

(b) that any annuity payable to the individual commences at a time after the individual attains the age of 60, and, unless the individual's annuity is one to commence on the death of a person to whom an annuity would be payable under the contract if that person survived the individual, can not commence after the time when the individual attains the age of 70,

(c) that the contract does not provide for the payment by the person contracting with the individual of any sum, other than any annuity payable to the individual's wife or husband or dependant, or to the individual except, in the event of no annuity beaming payable under the contract, any sums payable to the individual's personal representatives by way of return of premiums, by way of reasonable interest on premiums or by way of bonuses out of profits,

(d) that the contract does not provide for the payment of any annuity otherwise than for the life of the annuitant,

(e) that the contract does include provision securing that no annuity payable under it shall be capable in whole or in part of surrender, commutation or assignment.

(4) The Board may, if they think fit, and subject to any conditions that they think proper to impose, approve a contract under subsection (1)(a) above notwithstanding that, in one or more respects, they are not satisfied that the contract complies with the provisions of paragraphs (a) to (e) of subsection (3) above.

(5) Subsections (2) and (3) of section 226 above shall not apply to the approval of a contract under this section.

(6) The main purpose of a trust scheme, or part of a trust scheme, within section 226(5) above may be to provide annuities for the wives, husbands and dependants of the individuals, or lump sums payable to the individuals personal representatives on death and in that case—

(a) approval of the trust scheme shall be subject to the preceding provisions of this section with any necessary modifications, and not subject to subsections (2) and (3) of section 226 above,

(b) the provisions of this Chapter shall apply to the scheme or part of the scheme when duly approved as it applies to a contract approved under this section.

(c) section 226(6) above (tax relief for investments or deposits of the fund) shall apply to any duly approved trust scheme, or part of a trust scheme.

(7) Except as otherwise provided in this Chapter, any reference in the Tax Acts to a contract or scheme approved under section 226 above shall include a reference to a contract or scheme approved under this section.”

Relief carried forward

2 For subsection (2) of section 227 of the Taxes Act substitute—

“(2) If in any year of assessment a reduction or a greater reduction would be made under this section in the relevant earnings of an individual but for either or both of the following reasons, that is—

(a) an insufficiency of net relevant earnings, or

(b) the operation of paragraph (b) of subsection (1B) above (as respects a qualifying premium paid under a contract approved under section 226A of this Act),

the amount of the reduction which would be made but for those reasons less the amount of any reduction which is made in that year, shall be carried forward to the next following year, and shall be treated for the purposes of relief under this section as the amount of a qualifying premium paid in that following year.

(2A) If and so far as an amount once carried forward under subsection (2) above (and treated as the amount of a qualifying premium paid in the said following year) is not deducted from or set off against the individual's net relevant earnings for that year of assessment, it shall be carried forward again to the next following year (and treated as the amount of a qualifying premium paid in that year), and so on for succeeding years (if necessary).

(2B) The provisions of this subsection have effect for determining whether and how far an amount carried forward under subsection (2) above is to be treated as paid under an individual's contract on the one hand or a contract approved under section 226A of this Act on the other.

If and so far as any such amount could not have been so carried forward but for a qualifying premium paid under an individual's contract, that amount, or any part of it, when so carried forward on the first or any subsequent occasion, shall be treated for the purposes of this Chapter as the amount of a qualifying premium paid under an individual's contract.

In this subsection " individual's contract" means an approved annuity contract other than one approved under section 226A of this Act.”

Relief in respect of late assessments

3 For subsection (3) of section 227 of the Taxes Act substitute—

“(3) Where a relevant assessment to tax becomes final and conclusive at a time after 5th October in the year of assessment to which it relates, a qualifying premium paid—

(a) after that year of assessment, and

(b) not more than six months after that time,

may, if the individual so elects not more than six months after that time, be treated for the purposes of this section as paid in the year of assessment (and not in the year in which it is paid):

Provided that where either—

(i) the amount of that premium, together with any qualifying premiums paid by him in the year to which the assessment relates (or treated as so paid by virtue of any previous election under this subsection), exceeds the maximum amount of the reduction which may be made under this section in his relevant earnings for that year, or

(ii) the amount of that premium itself exceeds the increase in that maximum amount which is due to taking into account the income on which the assessment is made,

then the election shall have no effect as respects the excess.

In this subsection “a relevant assessment to tax ” means an assessment on the individual's relevant earnings or on the profits or gains of a partnership from which the individual derives relevant earnings”.

Holders of pensionable offices, etc.

4 In section 228 of the Taxes Act (application of limits on relief to holders of pensionable offices, etc.)—

(a) in subsection (1) for the words from “the proviso” to the end of the subsection substitute " section 227(1A) and (1C) of this Act shall have effect with the substitution for references to £1,500 of references to £1,500 less 15 per cent. of his pensionable emoluments for the year of assessment ",

(b) in subsection (2)(b) for “one-tenth” substitute " 15 per cent. ".

Persons born before 1916

5 For section 228(4) of the Taxes Act substitute—

“(4) Subject to subsection (5) below, in the case of an individual born at a time specified in the first column of the Table set out below, section 227(1A) and (1C) of this Act, and subsections (1) and (2) above, shall have effect with the substitution for references to £1,500 and to 15 per cent. of references respectively to such sum and such percentage as are specified for his case in the second and third columns of the Table.

TABLE

Year of birth	Sum	Percentage
1914 or 1915	£1,600	16
1912 or 1913	£1,700	17
1910 or 1911	£1,800	18
1908 or 1909	£1,900	19
1907 or any earlier year	£2,000	20”

Amendment to Chapter III of Part XIV of Taxes Act (charges in respect of life policies)

6 In section 393 of the Taxes Act after subsection (2) insert—

“(2A) Nothing in this Chapter shall apply to a policy of insurance which constitutes, or is evidence of, a contract for the time being approved under section 226A of this Act”.

Commencement and transitionals

7 (1) Nothing in the principal section or this Schedule shall affect relief for a year of assessment before the year 1971-72.

(2) Subsection (3) of the principal section shall not authorise the approval of an annuity contract or trust scheme which allows the commutation of an annuity or part of an annuity first becoming payable before 6th April 1971.

(3) Paragraph 2 of this Schedule shall have effect as respects amounts carried forward from years before the year 1971-72 as well as respects later years.

Section 21.

SCHEDULE 3 Occupational Pension Schemes

PART I Transitional

1 Section 208 of the Taxes Act (relief for superannuation funds)—

(a) shall not apply to a retirement benefits scheme which is or has at any time been approved (that is to say approved for the purposes of Chapter II of Part II of the [1970 c. 24.] Finance Act 1970),

(b) shall not apply to a scheme which comes into being after 5th April 1973, or which is altered after that date,

(c) shall cease to have effect on 6th April 1980.

2 (1) Section 23 of the Finance Act 1970 (taxation of schemes with exceptions for approved schemes and the others mentioned in section 24(1) of that Act)—

(a) in the case of a scheme which comes into being at a time after 5th April 1973 but before 6th April 1980, or which is altered at a time between those two dates, shall come into force at that time,

(b) shall come into force for all purposes on 6th April 1980.

(2) Neither subsection (1) nor subsection (2) of section 220 of the Taxes Act (which will be superseded by section 23 of the Finance Act 1970) shall apply to an approved scheme or to a scheme as respects which the said section 23 is in force, and Chapter II of Part IX of the Taxes Act (which contains the said section 220) shall cease to have effect on 6th April 1980.

(3) Sub-paragraph (2) above, and the repeal by this Act of the said Chapter II of Part IX, shall not affect any liability to tax in respect of a scheme for any period before the time when that Chapter II (or any provision of that Chapter) ceases to apply to the scheme, nor to the giving of any relief under section 221(3) of the Taxes Act.

3 (1) On such date as the Treasury may by order in a statutory instrument appoint—

(a) section 22 of the Finance Act 1970 (exemptions and reliefs for certain statutory schemes) shall come into force, and

(b) section 209 of the Taxes Act (corresponding provision for the schemes within the said section 22, and certain other statutory schemes) shall cease to have effect.

(2) The said section 209 shall not apply as respects a payment or repayment of contributions at a time when the relevant scheme is an exempt approved scheme, and the repeal by this Act of the said section 209 shall not apply as respects a payment or repayment of contributions at a time before the repeal takes effect

4 Where an alteration has been made in a scheme which before the alteration was a statutory superannuation scheme as defined in section 224(1) in Chapter II of Part IX of the Taxes Act, and, although the scheme was approved under an enactment or regulation relating to superannuation, the alteration was not so approved—

(a) the scheme shall not, after the alteration, be treated as a statutory superannuation scheme within the said definition, and

(b) section 209 of the Taxes Act shall not, after the alteration, apply to that scheme.

5 (1) This paragraph has effect as respects any retirement benefits scheme which authorises the employer to determine individual by individual which employees are subject to the scheme.

(2) For the purposes of—

(a) Chapter II of Part IX of the Taxes Act, and

(b) Chapter II of Part II of the [1970 c. 24.] Finance Act 1970,

the Board may, if they think fit, distinguish between employees who become subject to any such scheme at a time not later than 5th April 1973 on the one hand and those who become subject to the scheme at any later time on the other hand, and may treat the scheme as being, in relation to those two classes of employees, two different schemes, of which the one relating to employees becoming subject to the scheme on and after 6th April 1973 is a scheme coming into being on that date.

(3) Where the Board exercise their powers under this paragraph, the preceding provisions of this Schedule distinguishing between schemes coming into being up to 5th April 1973 and schemes coming into being later, shall apply accordingly to what are to be so treated as separate schemes.

(4) The provisions of this paragraph are without prejudice to the powers of the Board as respects the treatment of schemes conferred by section 25 of the Finance Act 1970.

6 References in this Part of this Schedule to the alteration of a scheme do not include references to any alteration which, in the opinion of the Board, is immaterial.

PART II Taxation of Refunds of Contributions and Certain other Payments

7 For paragraphs 2 and 3 of Part II of Schedule 5 to the Finance Act 1970 substitute, as respects tax for the year 1971-72 and subsequent years of assessment—

“Charge to tax on repayment of employee's contributions

2 (1) Subject to the provisions of this paragraph, tax shall be charged under this paragraph on any repayment to an employee during his lifetime of any contributions (including interest on contributions, if any) if the payment is made under—

(a) a scheme which is or has at any time been an exempt approved scheme, or

(b) a statutory scheme established under a public general Act.

(2) Where any payment is chargeable to tax under this paragraph, the administrator of the scheme shall be charged to income tax under Case VI of Schedule D and, subject to sub-paragraph (3) below, the rate of the tax shall be 10 per cent.

(3) The Treasury may, by order in a statutory instrument subject to annulment in pursuance of a resolution of the Commons House of Parliament, from time to time increase or decrease the rate of tax under sub-paragraph (2) above.

(4) The tax shall be charged on the amount paid or, if the rules permit the administrator to deduct the tax before payment, on the amount before deduction of tax, and the amount so charged to tax shall not be treated as income for any other purpose of the Tax Acts.

(5) (a) Sub-paragraph (1)(a) above shall not apply in relation to a contribution made after the scheme ceases to be an exempt approved scheme (unless it again becomes an exempt approved scheme);

(b) sub-paragraph (1)(b) above shall not apply to any payment made before the coming into force of section 22 of this Act.

(6) This paragraph shall not apply where the employee's employment was carried on outside the United Kingdom.

(7) In relation to a statutory scheme “employee” in this paragraph includes any officer.

Charge to tax: commutation of entire pension in special circumstances

3 (1) Where—

(a) a scheme which is or has at any time been an approved scheme, or

(b) a statutory scheme established under a public general Act,

contains a rale allowing, in special circumstances, a payment in commutation of an employee's entire pension, and any pension is commuted, whether wholly or not, under the rale, tax shall be charged on the amount by which the sum receivable exceeds—

(i) the largest sum which would have been receivable in commutation of any part of the pension if the scheme had secured that the aggregate value of the relevant benefits payable to an employee on or after retirement, excluding any pension which was not commutable, could not exceed three-eightieths of his final remuneration for each year of service up to a maximum of 40, or

(ii) the largest sum which would have been receivable in commutation of any part of the pension under any rule of the scheme authorising the commutation of part (but not the whole) of the pension, or which would have been so receivable but for the said circumstances,

whichever gives the lesser amount chargeable to tax.

(2) Where any amount is chargeable to tax under this paragraph the administrator of the scheme shall be charged to income tax under Case VI of Schedule D on that amount, and sub-paragraphs (2), (3) and (4) of paragraph 2 above shall apply as they apply to tax chargeable under that paragraph.

(3) This paragraph shall not apply where the employee's employment was carried on outside the United Kingdom.

(4) In relation to a statutory scheme “employee” in this paragraph includes any officer.

(5) In applying paragraph (i) or paragraph (ii) of sub-paragraph (1) above—

(a) the same considerations shall be taken into account, including the provisions of any other relevant scheme, as would have been taken into account by the Board in applying section 19 of this Act, and

(b) where the scheme has ceased to be an approved scheme, account shall only be taken of the rules in force when the scheme was last an approved scheme.

(6) Sub-paragraph (1)(b) above shall not apply to any payment made before the coming into force of section 22 of this Act”.

Schemes approved under old lawTaxation of refunds of contributions and commutation payments

8 (1) This paragraph has effect as respects any payment chargeable to tax for the year 1971-72 or any later year of assessment under Regulation 7, 8 or 13 of the [S.R. & O. 1921/1699.] Regulations dated November 10th 1921 made by the Board under section 32 of the [1921 c. 32.] Finance Act 1921 (which corresponds to section 208 of the Taxes Act).

(2) Where tax is chargeable under the said Regulation 7 (or Regulation 13 with that Regulation) then—

(a) if the scheme relates to a trade, profession or vocation carried on by the employer, the payment shall be treated for the purposes of the Tax Acts as a receipt of that trade, profession or vocation receivable when the payment falls due or on the last day on which the trade, profession or vocation is carried on by the employer, whichever is the earlier ;

(b) if the scheme does not relate to such a trade, profession or vocation, the employer shall be charged to tax on the amount of the payment under Case VI of Schedule D.

(3) Where tax is chargeable under the said Regulation 8 (or Regulation 13 with that Regulation), sub-paragraphs (2), (3) and (4) of paragraph 2 of Part II of Schedule 5 to the [1970 c. 24.] Finance Act 1970 (as set out in this Schedule) shall apply as they apply to tax chargeable under that paragraph.

(4) If at any time the scheme becomes an approved scheme (that is to say approved for the purposes of Chapter II of Part II of the Finance Act 1970) no tax shall be chargeable under the said Regulations on any payment made under the scheme after that time.

(5) The provisions of this paragraph shall have effect in substitution for the provisions of the said Regulations as to the rate of tax and the manner of charging tax, and the said Regulations 7, 8 and 13 shall not cease to be in force by reason of the provisions of this Act repealing the said section 208 of the Taxes Act, or of the provisions of this Act under which in certain cases the said section 208 ceases to apply to a scheme before the date of that repeal.

Schemes approved under old law or new lawCharge to tax in respect of unauthorised payments and payments after cessation of tax exemptions

9 (1) This paragraph applies to any payment to or for the benefit of an employee, otherwise than in course of payment of a pension, being a payment made out of funds which are or have been held for the purposes of a scheme which is or has at any time been approved for the purposes of—

(a) Chapter II of Part II of the [1970 c. 24.] Finance Act 1970, or

(b) section 208 of the Taxes Act, or

(c) Chapter II of Part IX of the Taxes Act.

(2) If the payment—

(a) is not expressly authorised by the rules of the scheme, or

(b) is made at a time when the scheme is not approved for the purposes of any of the enactments mentioned in paragraphs (a), (b) or (c) of sub-paragraph (1) above, and would not have been expressly authorised by the rules of the scheme when it was last so approved,

the employee (whether or not he is the recipient of the payment) shall be chargeable to tax on the amount of the payment under Schedule E for the year of assessment in which the payment is made.

(3) Any payment chargeable to tax under this paragraph shall not be chargeable to tax under paragraph 2 or paragraph 3 of Part II of Schedule 5 to the Finance Act 1970 (as set out in this Schedule), or under the Regulations mentioned in paragraph 8 above.

(4) References in this paragraph to any payment include references to any transfer of assets or other transfer of money's worth.

(5) Paragraph 5 of Part II of Schedule 5 to the Finance Act 1970 (Which is superseded by this paragraph) shall not have effect as respects tax for the year 1971-72 or any subsequent year of assessment.

PART III Consequential and Minor Amendments

Capital gains: amendment of Finance Act 1965

10 In section 38(2) of the [1965 c. 25.] Finance Act 1965 as amended by Part II of the Table in paragraph 11 of Schedule 15 to the Taxes Act after “section 208(2) of the Income and Corporation Taxes Act 1970 ” add “or section 21(7) of the Finance Act 1970 ”.

Saving for certain life policies

11 In section 19(4) and section 393(2) of the Taxes Act (life policies, etc.) after paragraph (b) insert “, or

(c) to any policy of life insurance issued in connection with an approved scheme as defined in Chapter II of Part II of the Finance Act 1970.”

Amendments of Finance Act 1970

12 (1) For section 19(4) of the [1970 c. 24.] Finance Act 1970 substitute—

“(4) Where an alteration has been made in a retirement benefits scheme, no approval given as regards the scheme before the alteration shall apply after the date of the alteration unless the alteration has been approved by the Board.”

(2) For section 24(2) of the said Act (exceptions from charge to tax under section 23) substitute—

“(2) Neither subsection (1) nor subsection (2) of the last preceding section shall apply for any year of assessment where, apart from those subsections—

(a) the employee is, by reason of his exercising his employment outside the United Kingdom, not assessable to tax for that year under Case I or II of Schedule E in respect of the emoluments of his employment, or

(b) he is assessable to tax for that year in respect of those emoluments only under Case III of Schedule E.”

(3) In the definition of “administrator” in section 26(1) of the said Act the words “resident in the United Kingdom” shall be omitted.

(4) In the said section 26(1) after the definition of “exempt approved scheme ” insert—

• “' final remuneration ' means the average annual remuneration of the last three years' service”.

(5) Paragraph 4 of Part II of Schedule 5 to the said Act (charge to tax in respect of payments to employer) shall be amended as follows—

(a) before the words “an exempt approved scheme” in sub-paragraph (1) insert “a scheme which is or has at any time been ”,

(b) at the end add—

“(3) References in this paragraph to any payment include references to any transfer of assets or other transfer of money's worth.”

(6) for paragraph 12(6) of Part III of Schedule 5 to the said Act substitute—

“(6) At the end of paragraph 4(c) of Schedule 8 to the Taxes Act (standard capital superannuation benefit) add “or in section 24(1) of the Finance Act 1970 ””.

Construction

13 (1) The principal sections and this Schedule shall be construed as one with Chapter II of Part II of the Finance Act 1970 and Schedule 5 to that Act.

(2) In paragraph 9(1) of the said Schedule 5, the reference to Part II of that Schedule shall include a reference to Part II of this Schedule.

(3) Without prejudice to the preceding provisions of this paragraph, references in paragraph 10 of the said Schedule 5 to that Schedule shall include references to this Schedule.

Section 23.

SCHEDULE 4 Separate Taxation of Wife's Earnings

Meaning of wife's earnings

1 References in this Schedule to the wife's earnings are references to any earned income of hers other than—

(a) income arising in respect of any pension, superannuation or other allowance, deferred pay or compensation for loss of office given in respect of the husband's past services in any office or employment; or

(b) any payment on account of an allowance under the Family Allowances Acts 1965 to 1969 or the Family Allowances Acts (Northern Ireland) 1966 to 1969 or any payment or benefit under the National Insurance Acts 1965 to 1970 or the National Insurance Acts (Northern Ireland) 1966 to 1969 which is payable to the wife otherwise than by virtue of her own insurance.

General Rule

2 In charging the income of husband and wife in accordance with section 37 of the Taxes Act (wife's income deemed to be husband's)—

(a) the wife's earnings shall be charged to income tax as if she were a single woman with no other income ; and

(b) the husband's other income shall be charged to income tax as if the wife's earnings were nil.

Personal reliefs

3 (1) Subject to the following provisions of this paragraph, the reliefs to be given under Chapter II of Part I of the Taxes Act (including the deductions from total income to be made for the purposes of surtax under section 28 of that Act) shall be determined as if the husband and the wife were not married and—

(a) any children of his (within the meaning of section 10(1) of the Taxes Act) were his children and not hers ;

(b) the wife's earnings were her only income ; and

(c) the husband's income included all income of the wife's other than her earnings.

(2) Accordingly the reliefs to be given under that Chapter in respect of the income chargeable under either sub-paragraph (a) or sub-paragraph (b) of paragraph 2 above shall not reduce the tax or the income chargeable under the other of those sub-paragraphs.

(3) No relief shall be given either to the husband or to the wife under section 6, 7, 9(2), 9(3), 13 or 14 of the Taxes Act.

(4) References in Chapter II of Part I of the Taxes Act to the claimant shall be construed as including the wife.

Effect of deductions etc.

4 (1) Notwithstanding anything to the contrary in the Income Tax Acts, where any amount is under any provision of those Acts to be deducted from or set off against income in respect of any payments, loss or capital allowance, then—

(a) if under that provision it is (or is in the first instance) to reduce the wife's earned income, or is to be deducted or set off in respect of payments made by her, it shall be treated as reducing her earnings and as not reducing any other income ; and

(b) in any other case it shall be treated as not reducing the wife's earnings.

(2) Sub-paragraph (1) above shall not affect the giving of any relief under section 174 of the Taxes Act (carry-back of terminal losses) for a year of assessment for which no election under section 23 of this Act was in force.

Assessments, recovery and returns

5 Income tax charged on the wife's earnings under paragraph 2(a) above shall, whether or not an application under section 38 of the Taxes Act (separate assessment) is in force, be assessed and recovered as if she were a single woman, and any repayment of tax assessed in pursuance of this paragraph shall be made to her.

6 Where an application under section 38(2) of the Taxes Act (separate assessment to surtax) is in force then, in addition to any surtax charged under paragraph 2(a) above, so much of the surtax charged under paragraph 2(b) above as is attributable to any income of the wife's shall be assessed on and recovered from her; and for this purpose—

(a) income other than earned income shall be treated as the highest part of the income charged under paragraph 2(b) above;

(b) if any income so charged is reduced by deductions under section 28 of the Taxes Act, income other than the wife's shall be treated as so reduced before income of the wife's ; and

(c) so much of the surtax so charged as under the preceding provisions of this paragraph is treated as charged in respect of income other than earned income shall be attributable to the husband and the wife in proportion to their respective shares of that income so charged.

7 Where subsection (3) of section 39 of the Taxes Act (separate returns in cases of separate assessment) applies for the purposes of subsection (1) and (2) of that section it shall apply also for the purpose of this Schedule ; but subject thereto nothing in this Schedule or in section 23 of this Act shall be taken to affect the provisions of the [1970 c. 9.] Taxes Management Act 1970 as to returns.

Modifications for 1973-74 and subsequent years

8 In relation to the year 1973-74 and subsequent years of assessment the preceding paragraphs of this Schedule shall apply with the omission of the following:—

(a) in paragraph 3(1), the words “(including the deductions from total income to be made for the purposes of surtax under section 28 of that Act) ” ;

(b) in paragraph 3(3), the references to sections 6, 9(2) and 9(3) of the Taxes Act; and

(c) paragraph 6.

Section 31.

SCHEDULE 5 Construction Operations

PART I Operations Included

• Construction, alteration, repair, extension, demolition or dismantling of buildings and structures (whether permanent or not).

• Construction, alteration, repair, extension or demolition of any works forming, or to form, part of the land, including (without prejudice to the foregoing) walls, roadworks, power-lines, aircraft runways, docks and harbours, railways, inland waterways, pipe-lines, wells, sewers, industrial plant and installations for purposes of land drainage, coast protection or defence.

• Installation in any building or structure of systems of heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection.

• Internal cleaning of buildings and structures, so far as carried out in the course of their construction, alteration, extension, repair or restoration.

• Operations which form an integral part of, or are preparatory to, or are for rendering complete, such operations as are previously described in this Schedule, including site clearance, earth-moving, excavation, tunnelling and boring, laying of foundations, erection of scaffolding, site restoration, landscaping and the provision of roadways and other access works.

• Painting or decorating the internal or external surfaces of any building or structure.

PART II Operations Excluded

• Drilling for, or extraction of, oil or natural gas.

• Extraction (whether by underground or surface working) of minerals; tunnelling or boring, or construction of underground works, for this purpose.

• Manufacture of building or engineering components or equipment, materials, plant or machinery; delivery of any of these things to site.

• Manufacture of components for systems of heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection; delivery of any of these things to site.

• The professional work of architects or surveyors, or of consultants in building, engineering, interior or exterior decoration or in the laying-out of landscape.

Section 37.

SCHEDULE 6 AMENDMENTS CONSEQUENTIAL ON NEW METHOD OF CHARGING TAX

PART I Amendment of [1970 c. 10.] Income and Corporation Taxes Act 1970

1 The Income and Corporation Taxes Act 1970 shall be amended in accordance with the following provisions of this Part of this Schedule.

2 For section 3 there shall be substituted the following section:—

“3 Charge at basic rate of certain income deducted from total income.

Where a person is required to be assessed and charged with income tax in respect of any property, profits or gams out of which he makes any payment in respect of—

(a) any annuity or other annual payment (not being interest); or

(b) any royalty or other sum in respect of the user of a patent; or

(c) any rent, royalty or other payment which, by section 156 or 157 of this Act (mining etc., rents and royalties) is declared to be subject to deduction of tax under Part II of this Act as if it were a royalty or other sum paid in respect of a patent;

he shall, in respect of so much of the property, profits or gains as is equal to the payment and may be deducted in computing his total income, be charged at the basic rate.”

3 In section 4 in subsection (1) the words “other than surtax” shall be omitted and for subsection (3) there shall be substituted the following subsection:—

“(3) Except as otherwise provided by the Income Tax Acts, any income tax charged at a rate other than the basic rate on income from which income tax has been deducted (otherwise than under section 204 of this Act) or is treated as having been deducted shall be due and payable on or before 6th July following the end of the year for which it is assessed, except that any such tax included in an assessment made later than 6th June following the end of that year shall be due and payable at the expiration of thirty days from the issue of the notice of assessment.”

4 In section 5 for the words “6 to 21 ” there shall be substituted the words “7 to 21 ”.

5 In section 8—

(a) in subsection (1)(a) for the words following sub-paragraph (ii) there shall be substituted the words “to a deduction of £600 from his total income ”;

(b) in subsection (1)(b) for the words from “from ” to the end there shall be substituted the words “of £420 from his total income ”;

(c) in subsection (2) for the words from “by an amount” to “£325” there shall be substituted the words “by the amount of that earned income or by £420 ”.

6 In section 10—

(a) in subsection (1) for the words from “the amount” to “standard rate on ” there shall be substituted the words “his total income of ”;

(b) in subsection (3)(a) for “£205 ” there shall be substituted “£265 ”.

(c) in subsection (3)(b) for “£180” there shall be substituted “£235 ”, and

(d) in subsection (3)(c) for “£155 ” there shall be substituted “£200 ”.

7 In section 12(1)—

(a) for the words from “from the amount” to “£75 ” there shall be substituted the words “of £100 from his total income ”, and

(b) in paragraph (iii) of the proviso the words “of tax ” shall be omitted.

8 In section 13 for the words from “from the amount” to the end there shall be substituted the words “of £100 from his total income ”.

9 In section 14—

(a) in subsection (2) for the words from “from the amount” to the end there shall be substituted the words “of £130 from his total income ”;

(b) in subsection (3) for “£100” there shall be substituted “£130 ”.

10 In section 16—

(a) in subsection (1) for “£387” there shall be substituted “£412 ” and for the words from “from the amount” to “on £75 ” there shall be substituted the words “of £100 from his total income ”;

(b) for “£75 ” wherever it occurs in the proviso to subsection (1) or in subsections (2) and (3) there shall be substituted “£100 ”;

(c) in subsection (2) for “£387” there shall be substituted “£412 ”, for “£422” there shall be substituted “£457 ” and for “£110 ” there shall be substituted “£145 ”.

11 In section 17 for the words from “from the amount” to “£40 ” there shall be substituted the words “of £55 from his total income ”.

12 In section 18—

(a) in subsection (1) the words “seven-ninths of”, in the first place where they occur, shall be omitted and for the words from “from the amount ” to “seven-ninths of ” there shall be substituted the words “from his total income equal to £130 reduced by ”;

(b) in subsection (2) the words “seven-ninths of” in the first place where they occur shall be omitted and for the words from “from the amount ” to “seven-ninths of ” there shall be substituted the words “from his total income of £260 reduced by ”;

(c) in subsection (4)(b) for “£100 ”, in both places, there shall be substituted “£130 ”;

(d) in subsection (4)(c) for “£200 ”, in both places, there shall be substituted “£260 ”.

13 In section 30—

(a) in subsection (1) the words from “whether an assessment” to “years of assessment” shall be omitted ;

(b) in subsection (3) for the words “the amount of the surtax for any year which would have been payable in his case ” there shall be substituted the words “what would have been his excess liability for any year ” and the words “for the purposes of surtax ” shall be omitted ;

(c) at the end of subsection (3) there shall be added the words " In this subsection ' excess liability' means the excess of liability to income tax over what it would be if all income tax were charged at the basic rate to the exclusion of any other rate ";

(d) in subsection (4) for the words from the beginning to “such individual” there shall be substituted the words “For the purpose of assessing any individual to tax in pursuance of this section ” for the words “assessed to surtax ” there shall be substituted the words “assessed to tax ” and for the words “avoidance of surtax ” (in both places) there shall be substituted the words “avoidance of tax ”;

(e) in subsection (5) the words “for the purposes of surtax ” shall be omitted.

14 In section 33(1) and (2) for the words “sections 30 to 32 ” there shall be substituted the words “section 30 ”.

15 In section 34(1) for the words following the paragraphs and preceding the proviso there shall be substituted the words " the said sum shall be treated for the purpose of computing the said individual's total income as received by him after deduction of income tax from a corresponding gross amount; and—

(i) no assessment shall be made on the individual in respect of income tax at the basic rate on that amount but he shall be treated as having paid income tax at the basic rate on that amount or, if his total income is reduced by any deductions, on so much of that amount as is part of his total income as so reduced ;

(ii) no repayment shall be made of income tax treated by virtue of paragraph (i) above as having been paid ; and

(iii) the said amount shall be treated for the purposes of sections 52 and 53 of this Act as not brought into charge to income tax."

16 In section 36—

(a) in subsection (1) for the word “surtax” there shall be substituted the words “the excess amount of the income tax ” and at the end of the subsection there shall be added the words " In this section ' the excess amount' means so much of the income tax payable in respect of the beneficiary's income as exceeds what would be the amount thereof if all income tax were chargeable at the basic rate to the exclusion of any other rate ";

(b) in subsection (2) for the words “any surtax ” there shall be substituted the words “the whole or part of the excess amount of the income tax ” and for the words “the said surtax ” (in both places) there shall be substituted the words “the excess amount or any part thereof ”;

(c) in subsection (3) for the words “the said surtax” there shall be substituted the words “the excess amount or any part thereof ”;

(d) in subsection (4) for the word “surtax ” there shall be substituted the word “tax ”.

17 In section 37 subsection (5) shall be omitted and for subsection (3) there shall be substituted the following subsection:—

“(3) Any deduction from a man's total income made under section 8(2) of this Act shall be treated as first reducing the earned income of his wife.”

18 In section 38 the following shall be substituted for subsection (2):—

“(2) Notwithstanding an application under subsection (1) above the income of the husband and the wife shall be treated as one in estimating total income and in determining whether any or what amount of that income is chargeable as investment income ; and the amount of tax payable by each of them shall be ascertained by first dividing between them, in proportion to the amounts of their respective incomes, the amount that would be payable by them if no reliefs were given under Chapter II of this Part of this Act and then applying section 39 below to give effect to those reliefs.”

19 In section 39—

(a) in subsection (1) the words “other than surtax ” and paragraphs (a) and (b) shall be omitted ;

(b) in subsection (1)(e) for the words from “if” to the end there shall be substituted the words “if no personal reliefs had been allowable ”.

(c) in the proviso to subsection (1) for the words from “paragraphs (a) to (e) ” to “reduce ” there shall be substituted the words “paragraphs (c) to (e) above shall not be less than the reduction resulting from section 37(3) above in ”;

(d) in subsection (2) the words “(other than surtax)” (in both places) shall be omitted ; and

(e) subsection (4) shall be omitted.

20 In section 52—

(a) paragraph (a) of subsection (1) shall be omitted ;

(b) in paragraph (c) of that subsection the words from “at the standard rate ” to “due ” shall be omitted ;

(c) at the end of that subsection there shall be added the words “and

(e) the deduction shall be treated as income tax paid by the person to whom the payment is made”; and

(d) in subsection (2) the words after “income tax thereon ” shall be omitted.

21 In section 53—

(a) in subsection (1) the words after “income tax thereon” shall be omitted, and

(b) in subsection (2) for the words “standard rate ” there shall be substituted the words “basic rate ”.

22 In section 54(1) for the words following “income tax thereon ” there shall be substituted the words “for the year in which the payment is made ”.

23 In section 58(9)(b)(ii) for the words “for the purposes of surtax ” there shall be substituted the words “for the purpose of computing total income ”.

24 In section 188(1)(b) for the word “surtax ” there shall be substituted the word “tax ”.

25 In section 204—

(a) in the proviso to subsection (2) for the words “standard rate ” there shall be substituted the words “basic rate or other rates ”;

(b) in subsection (3) the words “other than surtax ” shall be omitted.

26 In section 227(5) the words “at the standard rate ” shall be omitted.

27 In section 232—

(a) in subsection (1), in paragraph 2 of Schedule F, the words “thereon at the standard rate ” shall be omitted ;

(b) in subsection (2) for the words “standard rate ” there shall be substituted the words “basic rate ”.

28 In section 234(3), in the definition of “preference shares ” for the words “standard rate” there shall be substituted the words “basic rate ”.

29 In section 282(2) for the words from “amount falling” to “company ” there shall be substituted the words " amount of the company's income to be apportioned under this Chapter for the purposes of computing total income ".

30 In section 285(6)(b), for the words “for the purposes of surtax ” there shall be substituted the words “for the purpose of computing total income ”.

31 In section 286—

(a) in subsection (6) the words from “at the standard rate” to “the standard rate” shall be omitted and at the end there shall be inserted the words “is equal to that amount ”;

(b) in subsection (7) the words “for the purposes of surtax” shall be omitted.

32 (1) In section 287(1) for the words from “the person ” to the end there shall be substituted the following words: " then,—

(a) for the purpose of computing the total income of the person to whom the loan or advance was made a sum equal to the amount so released or written off shall be treated as income received by him after deduction of income tax from a corresponding gross amount;

(b) no repayment of income tax shall be made in respect of that income and no assessment shall be made on him in respect of income tax at the basic rate on that income ;

(c) notwithstanding paragraph (a) above, the income included by virtue of that paragraph in his total income shall be treated for the purposes of sections 52 and 53 of this Act as not brought into charge to income tax ;

(d) for the purpose of determining whether any or what amount of tax is, by virtue of paragraph (a) above, to be taken into account as having been deducted from a gross amount in the case of an individual whose total income is reduced by any deductions so much only of that gross amount shall be taken into account as is part of his total income as so reduced."

(2) In section 287(2) the words “as regards surtax” shall be omitted and at the end there shall be added the words “and subsection (1) above shall apply accordingly with the necessary modifications ”.

33 (1) In section 288(1)—

(a) for the word “surtax ” in both places there shall be substituted the words “income tax ”, and

(b) for the words “standard rate ” there shall be substituted the words “basic rate ”.

34 In section 296—

(a) in subsection (1) for the words “for the purposes of surtax ” there shall be substituted the words “for the purpose of computing total income ”;

(b) in subsection (2) the words “for surtax ” shall be omitted.

35 (1) Section 297 shall be amended as follows.

(2) In subsection (1) for the word “surtax ” there shall be substituted the words “income tax ”.

(3) For subsection (2) there shall be substituted the following subsection:—

“(2) Where a sum is so apportioned to a participator—

(a) it shall be treated for the purpose of computing his total income as income received by him at the end of the accounting period to which the apportionment relates and, subject to section 529 of this Act, shall be deemed to be the highest part of his total income;

(b) no assessment shall be made on the participator in respect of income tax at the basic rate on that sum (nor, in the case mentioned in subsection (4) below, in respect of income tax at any other rate) but he shall be treated as having paid income tax at the basic rate on that sum or, if his total income is reduced by any deductions, on so much of that sum as is part of his total income as so reduced ;

(c) no repayment shall be made of the income tax treated by virtue of paragraph (b) above as having been paid ; and

(d) the sum so apportioned shall be treated for the purposes of sections 52 and 53 of this Act as not brought into charge to income tax.”

(4) For subsection (3) there shall be substituted the following subsection:—

“(3) Where an amount is so apportioned to the personal representatives of a deceased person it shall be treated, in ascertaining the aggregate income of the estate for the purposes of Part XV of this Act, as having been received as mentioned in paragraph (a) of subsection (2) above, and paragraphs (b) to (d) of that subsection shall apply accordingly with the necessary modifications”.

(5) In subsection (4) for the words “charged to surtax” there shall be substituted the words “assessed to income tax ” and for the words “on which he is so chargeable ” there shall be substituted the words “to which he is so assessable ”.

(6) In subsection (5) for the word “surtax ”, where it first occurs, there shall be substituted the words “income tax ” and for the words from “relating to surtax” to the end there shall be substituted the words " relating to assessments and the collection and recovery of tax shall, with any necessary modifications, apply to tax chargeable under this section. "

(7) In subsection (6), for the word “surtax ” (in both places) there shall be substituted the word “tax ”, for the words “1st January in the year next following ” there shall be substituted the words “6th July next following the end of ” and for the words “2nd January in the year next following ” there shall be substituted the words “7th July next following the end of ”.

(8) In subsection (8)—

(a) for the word “surtax ” where it occurs in paragraph (a), there shall be substituted the word “tax ”, and

(b) the words “for the purposes of surtax ” shall be omitted.

(9) In subsection (9) for the word “surtax ” there shall be substituted the word “tax ”.

36 In section 298(3) for the word “surtax”, in the first place where it occurs, there shall be substituted the word “tax ” , and the words “for the purposes of surtax” shall be omitted.

37 In section 299(5) the words “for the purposes of surtax” shall be omitted.

38 In section 310(3) for the words “standard rate” (in both places) there shall be substituted the words “basic rate ”.

39 In section 319, in subsections (2) and (3), for the words “standard rate ” there shall be substituted the words “basic rate ”.

40 In section 343—

(a) in subsection (1)(a) for the words “standard rate” there shall be substituted the words “basic rate ”;

(b) in subsection (2)(b) the words “at the standard rate for the year of assessment ” shall be omitted ;

(c) in subsection (3)(b) for the words preceding “shall be made ” there shall be substituted the words “subject to subsection (2)(b) above no repayment of income tax and, subject to paragraph (i) of the proviso below, no assessment to income tax ”;

(d) for paragraph (c) of subsection (3) there shall be substituted the following paragraph:

“(c) in computing the total income of an individual entitled to any amounts paid or credited in respect of any such dividends or interest those amounts shall be treated as income for that year received by him after deduction of income tax from a corresponding gross amount;”

(e) in subsection (3)(d) for the words “the said amounts” there shall be substituted the words “the amounts so paid or credited ”;

(f) for paragraphs (i) and (ii) of the proviso to subsection (3) there shall be substituted the following paragraphs:—

“(i) paragraph (b) above shall not prevent an assessment in respect of income tax at a rate other than the basic rate ;

(ii) for the purpose of determining whether any or what amount of tax is, by virtue of paragraph (c) above, to be taken into account as having been deducted from a gross amount in the case of an individual whose total income is reduced by any deductions (not being an individual entitled to relief under section 7 of this Act) so much only of that gross amount shall be taken into account as is part of his total income as so reduced;”.

41 In section 393(1) for the words “surtax and to ” there shall be substituted the words “tax, including ”.

42 In section 399—

(a) in subsection (1)(a) the words from “for the purposes ” to “information ”, in subsection (1)(b)(ii) the word “surtax ” and in subsection (1)(c) the words “as regards surtax” shall be omitted ; and

(b) at the end of the section there shall be added the following subsection:—

“(4) Subject to section 400 of this Act, where, by virtue of subsection (1) above, a sum is included in an individual's total income—

(a) no assessment shall be made on him in respect of income tax at the basic rate on that sum but he shall be treated as having paid income tax at the basic rate on that sum or, if his total income is reduced by any deductions, on so much of that sum as is part of his total income as so reduced ;

(b) no repayment shall be made of the income tax treated by virtue of paragraph (a) above as having been paid ; and

(c) the sum so included shall be treated for the purposes of sections 52 and 53 of this Act as not brought into charge to income tax.”

43 In section 400—

(a) in subsections (2) and (5) for the word “surtax ”, wherever it occurs, there shall be substituted the word “tax ”, and

(b) in subsection (3) for the words from “the rate or rates ” to “nil rate ” there shall be substituted the words " such rate or rates of income tax, other than the basic rate, as would apply if it were reduced to that fraction and, as so reduced, still constituted the highest part of the claimant's total income for the year. "

44 In section 403(1) the words “for the purposes of surtax ” shall be omitted and at the end there shall be added the words " but he shall be entitled to a deduction from the amount of income tax with which he is chargeable for that year of an amount equal to income tax at the basic rate on that interest.

This subsection shall not affect the amount to be taken as an individual's total income for the purposes of section 7 or section 21 of this Act. "

45 In section 407(1) for the words from “in the case of” to “surtax” there shall be substituted the words “any consequential assessment ”.

46 In section 414—

(a) in subsection (1) the words “surtax or ”, and

(b) subsection (2)

shall be omitted.

47 In section 417(2)(a) for the words “standard rate ” there shall be substituted the words “basic rate ”.

48 In section 422—

(a) in subsections (1), (3) and (5) for the words “standard rate ” there shall be substituted the words “basic rate ”, and

(b) in subsection (2) the words “surtax for the year preceding ” shall be omitted and for the words from “would have been ” to the end there shall be substituted the words " would be sufficient to discharge the liability to income tax at rates other than the basic rate of the person entitled to the payment if the whole of his total income were chargeable at the basic rate, and such part thereof as would have been chargeable to surtax had it been income for the year 1937-38, were chargeable also at the rates of surtax in force for that year. "

49 In section 423 the following shall be substituted for subsections (2) and (3)—

“(2) The amount, if any, payable, in a case to which this section applies, to or for the benefit of the recipient of the emoluments in respect of his income tax for any year of assessment shall not exceed the following amount, that is to say—

(a) if the provision was limited to income tax other than surtax, the amount that would have been payable if the 1938-1939 rates of income tax, other than surtax, had applied to the year of assessment in question;

(b) if the provision was not so limited, the aggregate of the amount specified in paragraph (a) above and the amount that would have been payable in respect of his surtax if surtax had been charged for the year of assessment in question and had been charged on the same part of his income and at the same rates as surtax for the year 1937-1938.”

50 In section 424(c) for the words " if the standard rate of tax for the year had been 27.5 per cent “there shall be substituted the words ” if the basic rate for the year had been 27.5 per cent and had applied to all income to the exclusion of any other rate. "

51 In section 425(2) for the words “the standard rate of income tax for the time being in force ” there shall be substituted the words “income tax ”.

52 In section 426—

(a) in subsection (4)(a), for the words “standard tax ”, in the first place where they occur, there shall be substituted the words “income tax ” and for the words “standard tax ”, in the second place where they occur, there shall be substituted the words “income tax at the basic rate ”;

(b) in subsection (4)(b), for the words “shall be chargeable to standard tax ” there shall be substituted the words “shall be chargeable to income tax ”,

(c) in subsection (5) for the words “standard tax ”, in the first place where they occur, there shall be substituted the words “income tax ” , and for the proviso there shall be substituted the following—

“Provided that, where relief has been so given, such part of the amount in respect of which he has been charged to income tax as corresponds to the said proportion shall, for the purpose of computing his total income, be deemed to represent income of such an amount as would after deduction of income tax be equal to that part of the amount charged.”

53 In section 427—

(a) in the proviso to subsection (2) for the words from “his residuary income ” to the end there shall be substituted the words “his liability to income tax for that year at the rate or rates determined in pursuance of paragraph (b) of section 32(1) of the Finance Act 1971 shall be computed as if the amount determined in pursuance of that paragraph were increased by the amount of the duty so paid or, if less, by the amount of his residuary income ”;

(b) in subsection (3) for the words “standard tax ”, where they first and last occur, there shall be substituted the words “income tax at the basic rate ” and for the words “deduction of standard tax ” there shall be substituted the words “deduction of income tax ”.

(c) in subsection (4)(a), for the words “by reference to the standard rate ”, there shall be substituted the words “at the basic rate ”;

(d) in subsection (5), for the words “shall be chargeable to standard tax ” there shall be substituted the words “shall be chargeable to income tax ”;

(e) in subsection (6), for the words “standard tax ” there shall be substituted the words “income tax ”.

54 In section 428(2), for the words “standard tax ” in paragraph (a) and in paragraph (b) there shall be substituted the words “income tax ”.

55 In section 429(2)(a), for the words “standard tax ” there shall be substituted the words “income tax at the basic rate ”.

56 In section 430—

(a) in subsection (1), for the words “liability to surtax” there shall be substituted the words “excess liability ” and at the end of the subsection there shall be added the words " In this subsection ' excess liability' means the excess of liability to income tax over what it would be if all income tax were chargeable at the basic rate to the exclusion of any other rate ";

(b) in subsection (2) for the words “standard tax ” there shall be substituted the words “income tax ”, and

(c) in subsection (4) for the words “standard tax ” there shall be substituted the words “income tax at the basic rate ”.

57 In section 431(4), the words preceding “an inspector ” shall be omitted, for the words “furnish them within such time as they may direct ” there shall be substituted the words “furnish him within such time as he may direct ” and for the words “they think ” there shall be substituted the words “he thinks ”.

58 In section 432—

(a) in subsection (7) the words “As regards surtax” and “surtax ” shall be omitted ;

(b) in subsection (10) the words from “in the application ” to “surtax ” shall be omitted ; and

(c) subsection (11) shall be omitted.

59 In section 435(1)(b) the words from “the Board” to “standard rate ” shall be omitted.

60 In section 440(2) the words “at the standard rate” shall be omitted.

61 In section 441(1)(b) the words from “the Board ” to “standard rate ” shall be omitted.

62 In section 443 the words preceding “an inspector ” shall be omitted, for the words “furnish them within such time as they may direct ” there shall be substituted the words “furnish him within such time as he may direct ” and for the words “they think ” there shall be substituted the words “he thinks ”.

63 In section 449—

(a) in subsection (1) the words “at the standard rate ” ; and

(b) in subsection (3)(b) the words from “the Board ” to “standard rate ”

shall be omitted.

64 In section 451—

(a) in subsection (2)(e) for the words “standard rate ” there shall be substituted the words “basic rate ”;

(b) in subsection (5) for the words “of tax at the standard rate” there shall be substituted the words “of income tax ”, and

(c) in subsection (6) the words “at the standard rate ” shall be omitted.

65 In section 453 the words preceding “an inspector” shall be omitted, for the words “furnish them within such time as they may direct ” there shall be substituted the words “furnish him within such time as he may direct ” and for the words “they think ” there shall be substituted the words “he thinks ”.

66 In section 456(4) the words “at the standard rate ” shall be omitted.

67 In section 457(1) for the words following the paragraphs there shall be substituted the words " the income shall, for the purposes of excess liability, be treated as the income of the settlor and not as the income of any other person. In this subsection “excess liability ” means the excess of liability to income tax over what it would be if all income tax were charged at the basic rate to the exclusion of any other rate."

68 In section 458(1) for the words from “the income shall be treated” to “any other person” there shall be substituted the words " the income shall, for the purposes of excess liability, be treated as the income of the settlor and not as the income of any other person.

In this subsection “excess liability ” means the excess of liability to income tax over what it would be if all income tax were charged at the basic rate to the exclusion of any other rate ".

69 In section 460(4) for the word “surtax ” there shall be substituted the words “his total income ”.

70 In section 469(1)(ii) the words “at the standard rate ”, in the first place where they occur, shall be omitted and for the words from “unless ” to the end there shall be substituted the words “but shall be entitled to credit for any tax which that income is shown to have borne ”.

71 In section 470(3) for the words from “shall be chargeable ” to “of this Act” there shall be substituted the words " unless he shows that the proceeds of any sale or other realisation of the right to receive the interest which is deemed to be his income by virtue of this section have been charged to tax under Schedule C or under section 159(3) of this Act, shall be chargeable to tax under Case VI of Schedule D in respect of that interest, but shall be entitled to credit for any tax which that interest is shown to have borne. "

72 In section 480(1) for the words “standard rate”, in the first two places where they occur, there shall be substituted the words “basic rate ” and the words “at the standard rate ” in the last place where they occur shall be omitted.

73 In section 481(1) and (2)(b) the words from “or, for the purpose ” to “inspector ” shall be omitted.

74 At the end of section 497 there shall be added the following subsection—

“(10) In so far as any arrangements made before 30th March 1971 provide for the exemption of any income from surtax they shall have effect, unless otherwise modified by subsequent arrangements, as if they provided for that income to bear income tax at the basic rate and to be disregarded for the purpose of computing total income, except in so far as the computation affects the matters mentioned in section 34(3) of the Finance Act 1971, but not to be disregarded for the purpose of determining whether that income or any other income is chargeable as investment income.”

75 In section 510(5) for the words “standard rate ” there shall be substituted the words “basic rate ”.

76 In section 522, for the words “standard rate ” there shall be substituted the words “basic rate ”.

77 In section 526(5), in the definitions of “ordinary share capital” and “preference dividend ”, for the words “standard rate ” there shall be substituted the words “basic rate ”.

78 In section 528—

(a) in subsection (1) for the words from “as the case may be ” to the end there shall be substituted the words “in accordance with the provisions of the Income Tax Acts ”;

(b) in subsections (3)(a) and (b) for the words “standard rate ” there shall be substituted the words “basic rate ”;

(c) in subsection (4) the words “at the standard rate ” shall be omitted; and

(d) in subsection (5) the words “for the purpose of estimating total income for the purposes of surtax ” shall be omitted.

79 In paragraph 6 of Schedule 3 the words “tax at the standard rate on ” shall be omitted.

80 In Schedule 5, in paragraphs 1(c) and 7 for the words “standard rate ” there shall be substituted the words “basic rate ”.

PART II Amendment of Taxes Management Act 1970

81 The [1970 c. 9.] Taxes Management Act 1970 shall be amended in accordance with the following provisions of this Part of this Schedule.

82 In section 8—

(a) subsections (5) and (6) shall be omitted ;

(b) in subsection (8) the words from “which are required” to “standard rate ” and the words “for either or both of those purposes” shall be omitted and at the end there shall be added the words “or would fall to be so deducted but for section 457 or 458 of the principal Act ”.

83 In section 22 the words “for the purpose of charging surtax ” shall be omitted.

84 In section 29—

(a) for subsection (2) there shall be substituted the following subsection:—

“(2) All assessments under section 297 of the principal Act shall be made by the Board”;

(b) in subsection (4) the words “at the standard rate” shall be omitted; and

(c) in subsection (7) the words “at the standard rate ” shall be omitted.

85 In section 31(3)—

(a) in paragraph (a) the words “assessment to surtax, or any other ” shall be omitted ;

(b) in paragraph (b) after “53 ” there shall be inserted “297 ”, and

(c) after the paragraphs there shall be added the words " or if the appeal involves any question as to the application of section 30, Part XV or Part XVI of that Act. "

86 In section 86(1) the following shall be substituted for paragraph (b)—

“(b) any assessment charging income tax at a rate other than the basic rate.”

87 In section 88(5) the following shall be substituted for paragraph (c)—

“(c) in the case of any income tax specified in section 4(3) of the principal Act, the following 6th July”.

88 In section 91(3)—

(a) paragraphs (a) and (b)(i) shall be omitted ; and

(b) after paragraph (b) there shall be added the following:— “or

(c) affecting tax charged at a rate other than the basic rate on income from which tax has been deducted (otherwise than under section 204 of the principal Act) or is treated as having been deducted, unless it is a relief from the tax so charged.”

89 In section 93(4) for the words from the beginning to “this Act it” there shall be substituted the words “In relation to a return required for the purposes of section 9 of this Act the reference in subsection (2) above to tax ”.

90 In section 95(3) for the words from “include surtax ” to “do not” there shall be substituted the words “do not, in relation to anything done in connection with a partnership ”.

PART III Amendment of other Acts

91 In Schedule 6 to the [1965 c. 25.] Finance Act 1965, in paragraph 18, for the word “surtax ” there shall be substituted—

(a) wherever it occurs in sub-paragraph (1), the words “income tax ”; and

(b) wherever it occurs in sub-paragraph (2) or (3), the word “tax ”;

and at the end of sub-paragraph (2) there shall be inserted the words “or in relation to tax treated as having been paid by virtue of subsection (2)(b) of that section ”.

92 In section 32(6) of the [1968 c. 44.] Finance Act 1968, for the words “standard rate ” there shall be substituted the words “basic rate ”.

93 In section 29 of the [1970 c. 24.] Finance Act 1970—

(a) in subsection (1)(a), the words “(including surtax)” shall be omitted; and

(b) in subsection (4), the words “exclusive of surtax ” shall be omitted.

Section 38.

SCHEDULE 7 New method of charging tax—Transitional Provisions

1 Where any of the preceding years mentioned in the proviso to subsection (4) of section 30 of the Taxes Act is a year earlier than 1973-74 the proviso shall have effect, in relation to that year, as if neither the second reference in it to avoidance of surtax nor subsection (3) of that section had been amended by this Act.

2 (1) Where any provision, however worded, contained in an instrument (of whatever nature) made on or after 3rd September 1939 or in a will or codicil taking effect on or after that date provides for the payment, whether periodically or otherwise,—

(a) of a stated amount free of income tax other than surtax; or

(b) of an amount which, after deduction of income tax at the standard rate, is equal to a stated amount;

it shall have effect as follows.

(2) If it is such a provision as is mentioned in sub-paragraph (1)(a) above it shall have effect as if it provided for the payment of the stated amount free of income tax other than such as exceeds the amount to which the person to whom the payment is made would be liable if all income tax were charged at the basic rate to the exclusion of any other rate.

(3) If it is such a provision as is mentioned in sub-paragraph (1)(b) above, it shall have effect as if it provided for the payment of an amount which, after deduction of income tax at the basic rate, is equal to the stated amount.

3 Any instrument, however worded, conferring on any person a right to receive a dividend or interest the amount of which depends on the standard rate of income tax shall have effect as if instead of referring to the standard rate it referred to the basic rate.

4 Any reference in a statutory instrument made under the Tax Acts to the standard rate of income tax shall have effect as if it were a reference to the basic rate.

Section 49.

SCHEDULE 8 Capital Allowances

Investment grants etc.: exclusion of first-year allowances

1 (1) No first-year allowance shall be made in respect of so much of any expenditure as is taken into account for the purposes of—

(a) any grant towards that expenditure made under the [1966 c. 34.] Industrial Development Act 1966, or

(b) any grant towards that expenditure made under the [1966 c. 34 (N.I.).] Industrial Investment (General Assistance) Act (Northern Ireland) 1966 by virtue of the Industrial Investment Grant (Addition of Eligible Assets) Order (Northern Ireland) 1967, or

(c) any grant towards that expenditure made under the last mentioned Act and exceeding 20 per cent. of that expenditure, or

(d) any grant towards that expenditure made under any agreement under the [1966 c. 36 (N.I.).] Industries Development Act (Northern Ireland) 1966 made before 1st August 1971 other than one made after 16th February 1971 and providing that no grant payable thereunder in respect of expenditure on machinery or plant is to exceed 40 per cent. of the expenditure:

Provided that the Treasury may from time to time, by order made by statutory instrument, vary as respects expenditure incurred after the passing of this Act, or any description of such expenditure specified in the order, the percentages specified in paragraphs (c) and (d) above or either of them.

(2) If any such grant is made after the making of any such allowance, that allowance shall to that extent be withdrawn; and where the amount of any such grant is repaid in whole or in part by the grantee to the grantor, then, to the extent to which it has been so repaid, it shall be deemed never to have been made.

(3) All such assessments and adjustments of assessments shall be made as may be necessary to give effect to sub-paragraph (2) above ; and, notwithstanding anything in any other provision, the time within which such an assessment or adjustment may be made shall not expire before the expiry of three years from the end of the chargeable period in which the grant or, as the case may be, repayment is made.

(4) This paragraph does not apply to expenditure on the provision of ships.

Effect of other capital allowances

2 (1) Expenditure in respect of which a deduction may be allowed under section 91 of the [1968 c. 3.] Capital Allowances Act 1968 (which gives a deduction of 100 per cent. in the case of capital expenditure on scientific research) shall be disregarded for all the purposes of Chapter I of Part III of this Act; and where a deduction in respect of any expenditure has been allowed under the said section 91 in taxing a trade carried on by any person, paragraph 7 of this Schedule shall not apply on that person's bringing into use for the purposes of the trade of any machinery or plant representing that expenditure.

(2) Section 50 of the said Act of 1968 (effect on allowances under Chapter II of Part I of that Act of allowances in respect of machinery or plant used for exploration or in respect of agricultural or forestry works) shall have effect as if references therein to the said Chapter II included references to Chapter I of Part III of this Act.

Effect of sales between connected persons, sale and lease-back etc.

3 (1) Where a person incurs capital expenditure on the provision by purchase of machinery or plant which has been in use for the purposes of a trade carried on by the seller, and—

(a) he and the seller are connected with each other within the terms of section 533 of the Taxes Act, or

(b) the machinery or plant continues to be used for the purposes of a trade carried on by the seller, or

(c) it appears with respect to the sale, or with respect to transactions of which the sale is one, that the sole or main benefit which, but for this sub-paragraph, might have been expected to accrue to the parties or any of them was the obtaining of an allowance under Chapter I of Part III of this Act,

a first-year allowance shall not be made in respect of the expenditure, or if made shall be withdrawn, and there shall be disregarded for the purposes of section 44 of this Act so much (if any) of the expenditure as exceeds the disposal value to be brought into account under that section by reason of the sale.

(2) Where a person enters into a contract under which, on the performance thereof, he will or may become the owner of machinery or plant which has been in use for the purposes of a trade carried on by the person to whom the machinery or plant belongs, and—

(a) he and that person are connected with each other within the terms of section 533 of the Taxes Act, or

(b) the machinery or plant continues to be used for the purposes of a trade carried on by that person, or

(c) it appears with respect to the transaction, or with respect to transactions of which it is one, that the sole or main benefit which, but for this sub-paragraph, might have been expected to accrue to the parties or any of them was the obtaining of an allowance under Chapter I of Part III of this Act,

a first-year allowance shall not be made in respect of any expenditure incurred by him under the contract so far as relating to that machinery or plant, or if made shall be withdrawn, and there shall be disregarded for the purposes of section 44 of this Act so much (if any) of the expenditure as exceeds the disposal value to be brought into account under that section by reason of the contract so far as so relating.

(3) Where a person, being entitled to the benefit of a contract under which, on the performance thereof, he will or may become the owner of any machinery or plant which has been in use for the purposes of his trade, assigns the benefit of the contract so far as it relates to that machinery or plant to another person, and—

(a) he and the assignee are connected with each other within the terms of section 533 of the Taxes Act, or

(b) the machinery or plant continues to be used for the purposes of a trade carried on by him, or

(c) it appears with respect to the assignment, or with respect to transactions of which the assignment is one, that the sole or main benefit which, but for this sub-paragraph, might have been expected to accrue to the parties or any of them was the obtaining of an allowance under Chapter I of Part III of this Act,

a first-year allowance shall not be made in respect of any expenditure incurred by the assignee under the contract so far as so relating, or by way of consideration for the assignment, or if so made shall be withdrawn, and there shall be disregarded for the purposes of section 44 of this Act so much (if any) of the assignee's expenditure as exceeds the disposal value to be brought into account under section 45 of this Act by reason of the assignment.

(4) All such assessments and adjustments of assessments shall be made as may be necessary to give effect to the preceding provisions of this paragraph.

Further effects of disposal etc. before bringing into use

4 (1) Subject to sub-paragraph (2) below, the following provisions shall have effect where a person has incurred capital expenditure on the provision of machinery or plant for the purposes of a trade and, by reason of any event, the machinery or plant ceases to belong to him without having been brought into use for those purposes—

(a) if that expenditure exceeds the disposal value which by reason of the event that person would be required to bring into account under section 44 of this Act if he had previously brought the machinery or plant into use for the purposes of the trade, the amount of the excess shall, for the purposes of that section, be added to his qualifying expenditure for the chargeable period related to the event;

(b) if the event is one such that, if that person had previously brought the machinery or plant into use for the purposes of the trade any of the provisions of paragraph 3 above would have applied to the allowances to be made under Chapter I of Part III of this Act to another person, there shall be disregarded for the purposes of that Chapter so much (if any) of the expenditure incurred by that other person in acquiring the machinery or plant as exceeds the expenditure incurred by the first-mentioned person in providing it.

(2) Where the event referred to in sub-paragraph (1) above is the assignment of the benefit of a contract—

(a) paragraph (a) of that sub-paragraph shall have effect as if the expenditure there referred to were the total capital expenditure which the person in question would have incurred in respect of the machinery or plant if he had wholly performed the contract, and

(b) paragraph (b) of that sub-paragraph shall have effect as if, for the reference to the expenditure incurred by the other person in acquiring the machinery or plant, there were substituted a reference to the consideration given by that other person for the assignment.

(3) All such assessments and adjustments of assessments shall be made as may be necessary to give effect to the preceding provisions of this paragraph.

Effect of use partly for trade etc. purposes and partly for other purposes

5 (1) A first-year allowance may be made to a person in respect of any machinery or plant notwithstanding that it appears that, during the period during which the machinery or plant will be used for the purposes of a trade carried on by him, it will also be used for other purposes ; but the allowance in any such case shall be so much only of the allowance that would fall to be made if the machinery or plant were to be used only for the purposes of the trade as may be just and reasonable having regard to all the relevant circumstances of the case and, in particular, to the extent to which it appears that the machinery or plant is likely to be used for the said other purposes during that period.

(2) Where any machinery or plant is used partly for the purposes of a trade and partly for other purposes, the following provisions of this paragraph shall have effect with respect to the allowances and charges to be made in the case of the trade (hereafter called “the actual trade ”) under section 44 of this Act.

(3) If the machinery or plant has been used for the purposes of the actual trade at any time before the beginning of the chargeable period or its basis period in which it is first used partly for those purposes and partly for other purposes, it shall be treated for the purposes of the said section 44 as having permanently ceased to be used for the purposes of the actual trade immediately after the beginning of the said chargeable or basis period.

(4) Whether or not sub-paragraph (3) above applies, it shall be assumed for the purposes of the said section 44—

(a) that (with paragraph 7 of this Schedule applying where appropriate) immediately after the beginning of the said chargeable or basis period the machinery or plant is brought into use for the purposes of a trade (hereafter called “the notional trade ”) carried on by the person carrying on the actual trade separately from that and any other trade carried on by him,

(b) that from then until it ceases altogether to be used for the purposes of the actual trade the machinery or plant is used solely for the purposes of the notional trade,

(c) that the notional trade is permanently discontinued on the machinery or plant ceasing altogether to be used for the purposes of the actual trade, and

(d) that any first-year allowance made in respect of the machinery or plant was made without any reduction in the amount thereof under sub-paragraph (1) above ;

and the allowance or charge under that section which, on the above assumptions and having regard to sub-paragraph (5) below, would fall to be made for any chargeable period in the case of the notional trade—

(i) shall be reduced to such extent as may be just and reasonable having regard to all the relevant circumstances of the case and, in particular, to the extent to which the machinery or plant was used in that chargeable period or its basis period otherwise than for the purposes of the actual trade, and

(ii) shall, as so reduced, be made for that chargeable period in the case of the actual trade.

(5) If an allowance under the said section 44 falling by virtue of this paragraph to be made for any chargeable period in the case of the actual trade is not claimed, or is reduced in amount in accordance with a requirement under the proviso to subsection (2) of that section, then, in determining the allowance or charge under that section which would fall to be made for any subsequent chargeable period in the case of the notional trade, any allowance falling to be made in the case of that trade for the first-mentioned chargeable period shall be treated as not claimed or, as the case may require, proportionately reduced.

Effect of subsidies towards wear and tear

6 (1) If it appears that, during the period during which any machinery or plant will be used by a person for the purposes of his trade, sums which—

(a) are in respect of, or take account of, the wear and tear to the machinery or plant occasioned by its use for those purposes, and

(b) do not fall to be taken into account as income of that person, or in computing the profits or gains of any trade carried on by him,

are, or are to be, payable to that person directly or indirectly by the Crown, or by any government or public or local authority (whether in the United Kingdom or elsewhere), or by any other person, then, unless those sums are in respect of, or take account of, part only of the said wear and tear, any expenditure incurred by the first-mentioned person in providing the machinery or plant shall be wholly disregarded for the purposes of Chapter I of Part III of this Act.

(2) Where sub-paragraph (1) above would apply to a person's expenditure on the provision of machinery or plant but for the fact that the sums there referred to are in respect of, or take account of, part only of the wear and tear to the machinery or plant, a first-year allowance may be made in respect of the expenditure, but the amount thereof shall be reduced to such extent as may be just and reasonable having regard to all the relevant circumstances of the case.

(3) Where sums within sub-paragraph (1) above are paid as mentioned in that sub-paragraph to a person carrying on a trade, but are in respect of, or take account of, part only of the wear and tear to the machinery or plant in respect of which they are paid, the following provisions of this paragraph shall have effect with respect to the allowances and charges to be made in the case of the trade (hereafter called “the actual trade ”) under section 44 of this Act.

(4) If the machinery or plant has been used for the purposes of the actual trade at any time before the beginning of the chargeable period or its basis period in which the first such sum is so paid in respect thereof, it shall be treated for the purposes of the said section 44 as having permanently ceased to be used for the purposes of the actual trade immediately after the beginning of the said chargeable or basis period.

(5) Whether or not sub-paragraph (4) above applies, it shall be assumed for the purposes of the said section 44—

(a) that (with paragraph 7 of this Schedule applying where appropriate) immediately after the beginning of the said chargeable or basis period the machinery or plant is brought into use for the purposes of a trade (hereafter called “the notional trade ”) carried on by the person carrying on the actual trade separately from that and any other trade carried on by him,

(b) that from then until it ceases altogether to be used for the purposes of the actual trade the machinery or plant is used solely for the purposes of the notional trade, with no sums within sub-paragraph (1) above being paid in respect thereof to the person carrying on that trade,

(c) that the notional trade is permanently discontinued on the machinery or plant ceasing altogether to be used for the purposes of the actual trade, and

(d) that any first-year allowance made in respect of the machinery or plant was made without any reduction in the amount thereof under sub-paragraph (2) above ;

and the allowance or charge under that section which, on the above assumptions and having regard to sub-paragraph (6) below, would fall to be made for any chargeable period in the case of the notional trade—

(i) shall be reduced to such extent as may be just and reasonable having regard to all the relevant circumstances of the case, and

(ii) shall, as so reduced, be made for that chargeable period in the case of the actual trade.

(6) If an allowance under the said section 44 falling by virtue of this paragraph to be made for any chargeable period in the case of the actual trade is not claimed, or is reduced in amount in accordance with a requirement under the proviso to subsection (2) of that section, then, in determining the allowance or charge under that section which would fall to be made for any subsequent chargeable period in the case of the notional trade, any allowance falling to be made in the case of that trade for the first-mentioned chargeable period shall be treated as not claimed or, as the case may require, proportionately reduced.

Effect of use after user not attracting capital allowances, or after receipt by way of gift

7 (1) Subject to sub-paragraph (2) below, where a person—

(a) brings into use for the purposes of a trade carried on by him machinery or plant which belongs to him in consequence of his having incurred capital expenditure on its provision, but which he has previously used in circumstances such that that expenditure has not been taken into account in computing any allowance falling to be made in the case of the trade under Chapter I of Part III of this Act, or

(b) brings into use for the purposes of a trade carried on by him machinery or plant which belongs to him in consequence of a disposition by way of gift by reason of which the donor was required by virtue of section 44(5) of this Act to bring into account for the purposes there mentioned a disposal value equal to the price which the machinery or plant would have fetched if sold in the open market at the time of the gift,

the said section 44 shall have effect as if that person had incurred capital expenditure on the provision of the machinery or plant for the purposes of the trade in the chargeable period related to its bringing into use for those purposes, the amount of that expenditure being taken as the price which the machinery or plant would have fetched if sold in the open market on the date when it was so brought into use, and the machinery or plant being treated as belonging to that person in consequence of his having incurred that expenditure.

(2) Sub-paragraph (1) above shall not apply where a person brings into use for the purposes of a trade carried on by him machinery or plant which belongs to him in consequence of his having incurred capital expenditure on its provision and which he has previously used only for the purposes of activities carried on by him before commencing to work a mine, oil well, or other source of mineral deposits of a wasting nature, being activities consisting of—

(a) searching for or discovering and testing deposits or winning access thereto, or

(b) the construction of any works which are likely to be of little or no value when the source is no longer worked, or, where the source is worked under a foreign concession, which are likely to become valueless when the concession comes to an end to the person working the source immediately before the concession comes to an end ;

but, in any such case, the actual expenditure incurred by that person on the provision of the machinery or plant shall be treated for the purposes of the said section 44 as having been incurred by him on its provision for the purposes of the trade in the chargeable period related to its bringing into use for those purposes.

In this sub-paragraph—

• “foreign concession ” means a right or privilege granted by the government of, or any municipality or other authority in, any territory outside the United Kingdom, and

• “mineral deposits ” includes any natural deposits capable of being lifted or extracted from the earth.

Special rules for new ships

8 (1) Where for any chargeable period a first-year allowance falls to be made to a person carrying on a trade in respect of expenditure incurred by him on the provision of a new ship, that person may, by notice in writing given to the inspector not later than two years after the end of the period, require the postponement either of the whole allowance or of so much thereof as is specified in the notice.

(2) Where a notice has been given under sub-paragraph (1) above in respect of any first-year allowance—

(a) the allowance shall, as the case may require, be withheld or withdrawn, or partially withheld or withdrawn, and

(b) the expenditure to which the allowance relates shall be disregarded for all the purposes of section 44 of this Act except the purposes of subsections (5) and (6) of that section, and

(c) the person giving the notice may claim the amount withheld or withdrawn as a first-year allowance for any subsequent chargeable period in which he carries on the trade, or may claim first-year allowances not exceeding that amount in the aggregate for any two or more such periods.

(3) All such assessments and adjustments of assessments shall be made as may be necessary to give effect to the provisions of this paragraph.

(4) An allowance which is postponed by virtue of this paragraph shall not by reason only of the postponement fall within the references to allowances or amounts carried forward from an earlier year or period in sections 169(4)(d), 174(6) and 259(2) of the Taxes Act (loss relief and group relief).

Special rules for motor cars

9 In paragraphs 10 to 12 below “motor car ” means any mechanically-propelled road vehicle other than one within paragraph (a), (b) or (c) of section 43 of this Act.

10 (1) The following provisions of this paragraph shall have effect where capital expenditure exceeding £4,000 is incurred, or is treated under any provision of this Schedule as incurred, on the provision of a motor car for the purposes of a trade.

(2) It shall be assumed for the purposes of section 44 of this Act—

(a) that, immediately after the beginning of the chargeable period related to the incurring of the expenditure, the person carrying on the trade (hereafter called “the actual trade ”) brings the motor car into use for the purposes of a trade carried on by him separately from the actual trade and any other trade he may carry on,

(b) that the motor car is used for the purposes of the separate trade from then until it ceases altogether to be used for the purposes of the actual trade, and

(c) that the separate trade is permanently discontinued when the motor car ceases altogether to be used for the purposes of the actual trade ;

and, subject to sub-paragraphs (3) to (5) below, the allowance or charge under that section which, on these assumptions, would fall to be made for any chargeable period in the case of the separate trade shall be made for that period in the case of the actual trade.

(3) If on the assumptions in sub-paragraph (2) above a writing-down allowance would fall to be made for any chargeable period in the case of the separate trade, the amount thereof shall be treated as not exceeding—

(a) except in a case falling within paragraph (b) below, £1,000 or, if the period is part only of a year, a proportionate part of £1,000,

(b) if (by virtue of section 84 of the [1968 c. 3.] Capital Allowances Act 1968 as applied by this Schedule) the person carrying on the trade is regarded as having incurred a part only of the expenditure actually incurred on the provision of the motor car, a proportionate part of £1,000 or, if the period is part only of a year, that proportionate part proportionately reduced.

(4) Where the motor car ceases to be used for the purposes of the actual trade by reason of a transaction to which paragraph 3 of this Schedule applies—

(a) the disposal value to be brought into account under section 44 of this Act in the case of the separate trade shall be an amount equal to the price which the motor car would have fetched on a sale at the same time in the open market or, if less, the capital expenditure incurred, or treated as incurred, on the provision of the motor car by the person disposing of it, and

(b) the person acquiring the motor car shall be treated for the purposes of Chapter I of Part III of this Act as having incurred on its provision capital expenditure equal to that disposal value.

(5) If either of the following events occurs in relation to the motor car—

(a) it is used partly for the purposes of the actual trade and partly for other purposes, or

(b) while it is in use for the purposes of the actual trade, there is paid to the person carrying on the trade any sum which is in respect of, or takes account of, part of the wear and tear to it occasioned by that use,

neither paragraph 5 nor paragraph 6 of this Schedule shall apply, but, for the chargeable period related to the event and any subsequent period, instead of there being made in the case of the actual trade the allowance or charge which under the preceding provisions of this paragraph would fall to be made for that period in the case of the separate trade, there shall be made so much of that allowance or charge as, in accordance with the said paragraph 5 or 6, would be just and reasonable if it were one falling to be made for that period in the case of the notional trade referred to in that paragraph.

11 Where capital expenditure exceeding £4,000 is incurred on the provision of a motor car and, by virtue of section 85 of the [1968 c. 3.] Capital Allowances Act 1968 as applied by this Schedule, writing-down allowances may be made to a person as if a contribution made by him to the expenditure had been expenditure on the provision of the motor car for the purposes of a trade, the amount of the allowance to be made for any chargeable period—

(a) shall be determined as if the contribution had been expenditure on the provision of the motor car for the purposes of a trade carried on by that person separately from any other trade carried on by him, and

(b) shall not exceed an amount bearing to £1,000 the same proportion as that borne by the contribution to the capital expenditure actually incurred on the provision of the motor car or, if the chargeable period is part only of a year, that amount proportionately reduced.

12 Where, apart from this paragraph, the amount of any expenditure on the hiring of a motor car the retail price of which when new exceeds £4,000 would be allowed to be deducted in computing for the purposes of tax the profits or gains of any trade, the said amount shall be reduced in the proportion which £4,000, together with one half of the excess, bears to the said retail price.

Effect of successions to trades between connected persons

13 Where a person (the “successor ”) succeeds to a trade which was until that time carried on by another person (the “predecessor ”) and the two persons are connected with each other within the terms of section 533 of the Taxes Act, those persons may by notice in writing to the inspector elect that the provisions of this paragraph shall have effect; and in that event—

(a) for the purpose of making allowances and charges under Chapter I of Part III of this Act, the trade shall not be treated as discontinued;

(b) allowances and charges shall be so made to or on the successor as if everything done to or by the predecessor had been done to or by the successor, but with no account being taken of the sale or transfer from the predecessor to the successor of any machinery or plant which was in use for the purposes of the trade at the time of the succession.

Treatment of demolition costs

14 (1) Where any machinery or plant which is in use for the purposes of a trade is demolished, then—

(a) if the person carrying on the trade replaces the machinery or plant by other machinery or plant, the net cost to him of the demolition shall be treated for the purposes of Chapter I of Part III of this Act as expenditure incurred by him on the provision of that other machinery or plant, and

(b) if the person carrying on the trade does not replace the machinery or plant, his qualifying expenditure for the chargeable period related to the demolition shall be treated for the purposes of section 44 of this Act as increased by the net cost to him of the demolition.

(2) In this paragraph any reference to the net cost of the demolition of any machinery or plant is a reference to the excess, if any, of the cost of the demolition over any moneys received for the remains of the machinery or plant.

Application of certain provisions of [1968 c. 3.] Capital Allowances Act 1968

15 (1) Section 44 of the Capital Allowances Act 1968 (partnership using property of a partner) shall have effect as if the reference in subsection (1) to Chapter II of Part I of that Act included a reference to Chapter I of Part III of this Act, and as if the references in subsection (2) to section 33 of that Act and an event giving rise to a balancing allowance or balancing charge included references respectively to section 44(5) of this Act and an event requiring any disposal value to be brought into account.

(2) In section 45 of the said Act of 1968 (building alterations connected with installation of machinery or plant), the reference to the said Chapter II shall include a reference to the said Chapter I.

(3) Section 48 of the said Act of 1968 (successions to trades) shall, with the omission of the proviso to subsection (4) and subsection (6), have effect as if references therein to initial allowances, the said Chapter II, and section 47(1) of that Act included references respectively to first-year allowances, the said Chapter I and section 47(1) of this Act; but, in its application by virtue of this sub-paragraph, the section shall be modified by substituting, for all the words in subsection (2) from “be deemed to be a reference ” to the end of that subsection, the words "be deemed to be a reference to that price or, if it is less than that price, any excess of qualifying expenditure over disposal value which would have been taken into account under section 44 of the Finance Act 1971 for making an allowance for the chargeable period related to the permanent discontinuance of the deceased person's trade if the machinery or plant had had no disposal value."

(4) In section 77 of the said Act of 1968 (apportionments etc.) references to Part I of that Act shall include references to the said Chapter I; and the said Chapter I shall be treated as included in the provisions referred to in section 81(2) of that Act (procedure on apportionments etc.).

(5) In section 84(1) of the said Act of 1968 (subsidies etc.), the reference to Part I of that Act shall include a reference to the said Chapter I.

(6) Section 85(1) of the said Act (allowances in respect of contributions to capital expenditure) shall have effect as if the references therein to initial allowances and writing-down allowances included references respectively to first-year allowances and writing-down allowances under the said Chapter I, but, in its application by virtue of this sub-paragraph, modified by substituting the words “of that asset ” for the words “of a similar asset” ; and, for the purpose of any allowance under the said Chapter I given by virtue of the said section 85(1) in respect of any asset, that asset shall be treated as belonging to the person making the contribution in respect of which the allowance is given at any time when it belongs, or is treated under the said Chapter I as belonging, to the recipient of the contribution.

Amendments of other enactments

16 (1) Paragraph 6 of Schedule 6 to the [1965 c. 25.] Finance Act 1965 shall be amended by inserting in sub-paragraph (4)(a), after the words “said Act of 1968) ” , the words “or under Chapter I of Part III of the Finance Act 1971 ”, and by adding the following sub-paragraph after sub-paragraph (6)—

“(7) Where the disposal is of machinery or plant in relation to expenditure on which allowances or charges have been made under Chapter I of Part III of the Finance Act 1971, and neither paragraph 5 (assets used partly for trade purposes and partly for other purposes) nor paragraph 6 (wear and tear subsidies) of Schedule 8 to that Act applies, the capital allowances to be taken into account under this paragraph are to be regarded as equal to the difference between the capital expenditure incurred, or treated as incurred, under that Chapter on the provision of the machinery or plant by the person making the disposal and the disposal value required to be brought into account in respect of the machinery or plant.”

(2) Any reference in the [1968 c. 3.] Capital Allowances Act 1968 to Chapter II of Part I of that Act shall, unless it is in the said Chapter II or in Chapter VI of the said Part I, include a reference to Chapter I of Part III of this Act.

(3) In the definition of “capital allowance” in section 526(5) of the Taxes Act, there shall be added at the end “and any allowance under Chapter I of Part III of the Finance Act 1971 ”.

(4) In sections 60(3) and 190(3) of the Taxes Act, for the words from “section 28 ” to the end there shall be substituted the words “such relief shall be given under this section as may be just and reasonable having regard to all the relevant circumstances and, in particular, to the extent of the use for the said other purposes ”.

(5) In sections 155(8), 174(12), 180(7), 190(1), 227(4), 252(2), 352(4), 485(4) and 528(5)(c) of the Taxes Act, any reference to the [1968 c. 3.] Capital Allowances Act 1968, to Part I of that Act, or to Chapter II of that Part, shall include a reference to Chapter I of Part III of this Act.

(6) Section 177 of the Taxes Act shall be amended by adding the following subsection after subsection (3)—

“(3A) Where a company incurs a loss in a trade in an accounting period for which one or more first-year allowances "fall to be made to it under Chapter I of Part III of the Finance Act 1971 in respect of expenditure on the provision for the purposes of the trade of machinery or plant within section 42(2)(b) of that Act, subsections (2) and (3) above shall have effect in relation to so much of the loss as would not have been incurred if the allowance or allowances had been totally disclaimed as if the time specified in the said subsection (3) were a period of three years ending immediately before the accounting period in which the loss is incurred”.

(7) Section 492 of the Taxes Act shall be amended by adding the following subsection after subsection (8)—

“(9) This section shall not apply if the capital sum obtained in respect of the lessee's interest in a lease constituting a hire-purchase agreement for machinery or plant is a sum which is required to be brought into account as the whole or part of the disposal value of the machinery or plant under section 45(2) of the Finance Act 1971.”

(8) The following shall be substituted for the definition of “anticipated normal working life ” in section 493(6) of the Taxes Act—

• “' anticipated normal working life ' means, in the case of any asset, the period which might be expected, when the asset is first put into use, to be going to elapse before it is finally put out of use as being unfit for further use, it being assumed that the asset is going to be used in the normal manner and to the normal extent, and is going to be so used throughout that period.”

(9) In paragraph 14(a) of Schedule 8 to the Taxes Act, after the words “section 33 of the Capital Allowances Act 1968 ” there shall be inserted the words “or under Chapter I of Part III of the Finance Act 1971 ”; and in paragraph 14(b) of that Schedule, for the words “Chapter II of Part I of that Act” there shall be substituted the words “Chapter II of Part I of the said Act of 1968 or Chapter I of Part III of the said Act of 1971 ”.

(10) In paragraph 9 of Schedule 2 to the [1971 c. 75.] Civil Aviation Act 1971, for the words “(which confers” there shall be substituted the words “and Chapter I of Part III of the Finance Act 1971 (which confer ”, and for the words “shall be made under the said Act of 1968 ” there shall be substituted the words “or first-year allowance shall be made under the said Act of 1968 or the said Act of 1971 ”.

Transitional provision as to roll-over relief

17 Where section 40 of the [1968 c. 3.] Capital Allowances Act 1968 applies on a person's replacement of any machinery or plant by other machinery or plant on the provision of which his expenditure is capital expenditure to which Chapter I of Part III of this Act applies, it shall so apply with the substitution of the following for all the words from the beginning of paragraph (a) of subsection (1) to the end of the section—

“(a) if the amount on which the charge would have been made is greater than the capital expenditure on the provision of the new machinery or plant, the charge shall be made on an amount equal to the difference, and

(b) for the purposes of Chapter I of Part III of the Finance Act 1971, except the bringing into account of any disposal value, the capital expenditure on the provision of the new machinery or plant shall be treated as reduced by the amount on which the charge would have been made, or, if paragraph (a) above applies, shall be disregarded.

(2) No election shall be made under this section if in relation to the new machinery or plant it appears that the provisions of paragraph 5, 6 or 10 of Schedule 8 to the said Act of 1971 will apply.”.

Section 55.

SCHEDULE 9 Restoration of Development Value

Interpretation

1 In this Schedule “the principal section” means section 55 of this Act.

Disposal on compulsory purchase

2 Where a disposal of land is made on the compulsory acquisition of an interest in the land by an authority possessing compulsory purchase powers and the interest became vested in the acquiring authority before 23rd July 1970 the disposal shall be regarded for the purposes of subsection (2) of the principal section as having been made before that date, whether or not it would be so regarded apart from this paragraph.

Replacement of business assets

3 Where section 33 of the [1965 c. 25.] Finance Act 1965 applied on the acquisition, before 23rd July 1970, of, or of an interest in, any new assets and the adjustment required to be made under subsection (1)(a) or subsection (2)(a) of that section was, by virtue of paragraph 9(5) of Schedule 14 to the [1967 c. 54.] Finance Act 1967, required to be computed as mentioned therein, the adjustment required to be made under subsection (1)(b) or (2)(b) of that section shall also be so computed, notwithstanding the repeals made by this Act.

Mineral royalties

4 (1) Where betterment levy was chargeable in respect of the grant, renewal, extension or variation of a mineral lease or agreement and the mineral lease or agreement is renewed, extended or varied after 22nd July 1970, the relevant fraction referred to in section 29(1)(b) of the [1970 c. 24.] Finance Act 1970 (which determines the chargeable gain treated as accruing to a person entitled to receive mineral royalties under the lease or agreement) shall, notwithstanding anything in that section, be one half in any period beginning after the renewal, extension or variation.

(2) Where such a period is part of a year of assessment or accounting period the chargeable gain treated as so accruing shall be calculated separately for that part and the part ending with the renewal, extension or variation.

(3) In this paragraph any expression used in section 29 of the Finance Act 1970 has the same meaning as in that section.

Allowance for levy under Case B,C or F in calculating chargeable gain on subsequent disposal

5 (1) Where betterment levy charged in the case of any land in respect of an act or event falling within Case B or Case C or, if it was the renewal, extension or variation of a tenancy, Case F—

(a) has been paid ; and

(b) has not been allowed as a deduction in computing the profits or gains or losses of a trade for the purposes of Case I of Schedule D ;

then, if the person by whom the levy was paid disposes of the land or any part of it after 22nd July 1970 and so claims, the following provisions of this paragraph shall have effect for the purpose of applying Schedule 6 to the Finance Act 1965 to the disposal.

(2) Paragraph 23 of that Schedule (sales of land reflecting development value) shall apply where the condition stated in sub-paragraph (1)(a) thereof is satisfied, notwithstanding that the condition stated in sub-paragraph (1)(b) thereof is not satisfied.

(3) Subject to the following provisions of this paragraph, there shall be ascertained the excess, if any, of—

(a) the net development value ascertained for the purposes of the levy ; over

(b) the increment specified in sub-paragraph (6) below;

and the amount of the excess shall be treated as an amount allowable under sub-paragraph (1)(b) of paragraph 4 of the said Schedule 6.

(4) Where the act or event in respect of which the levy was charged was a part disposal of the land, the said paragraph 4 shall apply as if the part disposal had not taken place and sub-paragraph (5) below shall apply in lieu of sub-paragraph (3) above.

(5) The amount or value of the consideration for the disposal shall be treated as increased by the amount of any premium or like sum paid in respect of the part disposal, and there shall be ascertained the excess, if any, of—

(a) the aggregate specified in sub-paragraph (7) below ; over

(b) the increment specified in sub-paragraph (6) below ;

and the amount of the excess shall be treated as an amount allowable under sub-paragraph (1)(b) of the said paragraph 4.

(6) The increment referred to in sub-paragraphs (3)(b) and (5)(b) above is the excess, if any, of—

(a) the amount or value of the consideration brought into account under sub-paragraph (1)(a) of the said paragraph 4; over

(b) the base value ascertained for the purposes of the levy.

(7) The aggregate referred to in sub-paragraph (5)(a) above is the aggregate of—

(a) the net development value ascertained for the purposes of the levy; and

(b) the amount of any premium or like sum paid in respect of the part disposal, in so far as charged to tax under Schedule A (or, as the case may be, Case VIII of Schedule D); and

(c) the chargeable gain accruing on the part disposal.

(8) Where betterment levy in respect of more than one act or event has been charged and paid as mentioned in sub-paragraph (1) above sub-paragraphs (2) to (7) above shall apply without modifications in relation to the betterment levy in respect of the first of them; but in relation to the other or others sub-paragraph (3) or, as the case may be, (5) above shall have effect as if the amounts to be treated thereunder as allowable under sub-paragraph (1)(b) of the said paragraph 4 were the net development value specified in sub-paragraph (3)(a) or, as the case may be, the aggregate referred to in sub-paragraph (5)(a) of this paragraph.

(9) Where the disposal is of part only of the land sub-paragraphs (2) to (8) above shall have effect subject to the appropriate apportionments.

(10) References in this paragraph to a premium include any sum payable as mentioned in subsection (3) or (4) of section 80 of the Taxes Act (sums payable in lieu of rent or as consideration for the surrender of lease or for variation or waiver of term) and, in relation to Scotland, a grassum.

Section 56.

SCHEDULE 10 Capital Gains—Provisions Relating to Short-Term Gains and Time of Disposal and Acquisition

Interpretation

1 (1) In this Schedule—

• “Case VII ” means Case VII of Schedule D ;

• “gilt-edged securities ” means specified securities within the meaning of section 41 of the [1969 c. 32.] Finance Act 1969 ; and

• “securities ” includes shares and any assets dealt with without identifying the particular assets disposed of or acquired.

(2) Shares shall not be treated for the purposes of this Schedule as being of the same kind unless they are treated as being of the same class by the practice of a recognised stock exchange in the United Kingdom or elsewhere or would be so treated if dealt with on such a stock exchange.

Unrelieved Case VII losses

2 Where no relief from income tax (for a year earlier than 1971-72) has been given in respect of a loss or part of a loss allowable under Case VII the loss or part shall, notwithstanding that the loss accrued before that year, be an allowable loss for the purposes of the capital gains tax, but subject to any restrictions imposed by paragraph 17(3) of Schedule 7 to the [1965 c. 25.] Finance Act 1965 (transactions between connected persons).

Gains arising out of the United Kingdom

3 Any amount which, if income tax were chargeable under Case VII for a year of assessment later than 1970-71, would be so chargeable for such a year by virtue of section 160 (6) of the Taxes Act (remittance basis for individuals not domiciled in the United Kingdom) shall be chargeable to capital gains tax as a gain arising in that year.

Restriction on exemption or relief with respect to disposal of guaranteed stock or gilt-edged securities

4 (1) Neither section 27(3) of the Finance Act 1965 (gains and losses on certain guaranteed stock disregarded if disposal within exempt price range), nor paragraph 5(2) of Schedule 7 to that Act (conversion of such stock), nor section 41(1) of the Finance Act 1969 (exemption of gilt-edged securities) shall apply in the case of any disposal of securities which occurs within 12 months after their acquisition.

(2) Sub-paragraph (1) above shall not exclude the application of the provisions mentioned therein where the person disposing of the securities had acquired them by devolution on death or as legatee or, if they were settled property, on becoming absolutely entitled thereto as against the trustee.

(3) Where, in the case of a man and his wife, paragraph 20 of Schedule 7 to the [1965 c. 25.] Finance Act 1965 applies in relation to the acquisition of any securities by the one from the other, and the one making the acquisition subsequently disposes of the securities by a disposal to which that paragraph does not apply, he shall be treated for the purposes of sub-paragraph (1) above as if he had acquired the securities when the other did.

Identification of certain assets acquired and disposed of

5 Paragraph 2 of Schedule 7 to the Finance Act 1965 (pooling of shares etc.) shall not apply to gilt-edged securities or to securities in the case of which the application of section 27(3) of that Act is excluded by paragraph 4 above and shall, in its application to other assets, have effect subject to paragraph 6 of this Schedule; and paragraphs 22(6) and 26(3) of Schedule 6 to that Act and section 32(5) of the [1968 c. 44.] Finance Act 1968 (shares held on 6th April 1965) shall also have effect subject to paragraph 6 of this Schedule.

Disposal on or before day of acquisition

6 (1) The following provisions shall apply where securities of the same kind are acquired or disposed of by the same person on the same day and in the same capacity—

(a) all the securities so acquired shall be treated as acquired by a single transaction and all the securities so disposed of shall be treated as disposed of by a single transaction ; and

(b) all the securities so acquired shall, so far as their quantity does not exceed that of the securities so disposed of, be identified with those securities.

(2) Where the quantity of the securities so disposed of exceeds the quantity of the securities so acquired, then so far as the excess—

(a) is not required by paragraph 22(6) or 26(3) of Schedule 6 to the Finance Act 1965 or by section 32(5) of the Finance Act 1968 to be identified with securities held on or acquired before 6th April 1965 ; and

(b) cannot be treated under paragraph 2 of Schedule 7 to the Finance Act 1965 as diminishing a holding ;

it shall be treated, subject to paragraph 7 below, as diminishing a quantity subsequently acquired, and a quantity so acquired at an earlier date rather than one so acquired at a later date.

Disposal and acquisition of guaranteed stock or gilt-edged securities—general

7 (1) The following provisions shall apply, subject to paragraph 6(1) above and paragraph 8 below, for the purpose of identifying gilt-edged securities disposed of by any person with securities of the same kind acquired by him in the same capacity, and for determining whether the application of section 27(3) of the [1965 c. 25.] Finance Act 1965 to any securities is excluded by paragraph 4 above.

(2) Securities disposed of at an earlier date shall be identified before securities disposed of at a later date, and their identification shall have effect also for determining what securities might be comprised in the later disposal.

(3) Securities disposed of shall be identified with securities acquired within the twelve months preceding the disposal rather than with securities not so acquired, and with securities so acquired at an earlier date rather than with securities so acquired at a later date.

Acquisition and disposal of gilt-edged securities—disposal to husband or wife and third person

8 (1) Where, in the case of a man and his wife living with him, one of them—

(a) disposes of gilt-edged securities of any kind to the other; and

(b) disposes of gilt-edged securities of the same kind to a third person;

then, if under the preceding provisions of this Schedule any of the securities disposed of to the husband or wife would be identified with securities acquired within the twelve months preceding the disposal and any of the securities disposed of to the third person with securities not so acquired, the securities disposed of to the third person shall be identified with securities so acquired before any securities disposed of to the husband or wife are so identified.

(2) If there is more than one disposal to the wife or husband, or to a third party, the provisions of this paragraph shall be applied to securities disposed of at an earlier date before they are applied to securities disposed of at a later date, and the identification of the securities disposed of at the earlier date shall have effect also for determining what securities might be comprised in the later disposal.

Re-acquisition of gilt-edged securities after sale at a loss

9 (1) Where a loss accrues to a person from his acquisition and disposal of gilt-edged securities and he re-acquires (in the same capacity) the same securities within one month of the disposal or, if the re-acquisition is not through a stock exchange, within six months of the disposal, that loss shall not be deductible except from a chargeable gain accruing to him on the disposal of the securities re-acquired.

(2) Where a person disposes of gilt-edged securities and afterwards acquires gilt-edged securities of the same kind within the period referred to in sub-paragraph (1) above, he shall be treated for the purposes of that sub-paragraph as re-acquiring the securities disposed of (or such quantity of them as does not exceed the quantity acquired) but so that—

(a) there cannot be in relation to the same disposal more than one re-acquisition of the same security, nor can there be by the same acquisition of a security a re-acquisition in relation to more than one disposal; and

(b) if an acquisition could be treated as a re-acquisition of securities disposed of either at an earlier or at a later date it shall be treated as a re-acquisition of the securities disposed of at the earlier date ; and

(c) if securities disposed of by the same disposal could be treated as re-acquired at an earlier or at a later date they shall be treated as re-acquired at the earlier date.

(3) In the case of a man and his wife living with him the preceding provisions of this paragraph shall, with the necessary modifications, apply also where a loss on the disposal accrues to one of them and the acquisition after the disposal is made by the other.

Time of disposal and acquisition

10 (1) Subject to section 45(5) of the [1965 c. 25.] Finance Act 1965 and sub-paragraph (2) below, where an asset is disposed of and acquired under a contract the time at which the disposal and acquisition is made is the time the contract is made (and not, if different, the time at which the asset is conveyed or transferred).

(2) If the contract is conditional (and, in particular, if it is conditional on the exercise of an option) the time at which the disposal and acquisition is made is the time when the condition is satisfied.

11 Where an interest in land is acquired, otherwise than under a contract, by an authority possessing compulsory purchase powers the time at which the disposal and acquisition is made is the time at which the compensation for the acquisition is agreed or otherwise determined (variations on appeal being disregarded for this purpose) or, if earlier (but after 20th April 1971), the time when the authority enter on the land in pursuance of their powers.

Consequential amendments

12 In section 270 of the [1970 c. 10.] Income and Corporation Taxes Act 1970—

(a) in subsection (3) after the word “disposal” there shall be inserted the words “and the asset consists of specified securities ” and for the words from “subsections (1) and (2)” to “(1) above ” there shall be substituted the words “the provisions of Schedule 10 to the Finance Act 1971 applying to such securities ”, and

(b) after subsection (5) there shall be added the following subsection:—

“(6) In this section ' specified securities' has the same meaning as in section 41 of the [1969 c. 32.] Finance Act 1969.”

13 In section 271(4) of the [1970 c. 10.] Income and Corporation Taxes Act 1970 after the word “disposal” there shall be inserted the words " and the asset consists of securities of a description specified in section 41(8) of the [1969 c. 32.] Finance Act 1969 “and for the words ” the preceding provisions of this section “there shall be substituted the words ” the provisions of Schedule 10 to the Finance Act 1971 applying to such securities ".

Section 57.

SCHEDULE 11 Provisions Supplementary to Section 57

Interpretation

1 In this Schedule “the principal section ” means section 57 of this Act.

Losses

2 (1) Where, in the case of any individual, subsection (1) of the principal section applies in any year of assessment, or would apply if there were any, or sufficient, capital gains accruing to him, then if any allowable losses accrued to him in that year, they shall be treated for the purpose of applying section 20(4) of the [1965 c. 25.] Finance Act 1965 (deduction of allowable losses) in any subsequent year as reduced by the amount of the chargeable gains accruing to him in the year in which the losses accrued.

(2) Where in any year of assessment in which a married woman is living with her husband there is in the case of one but not in the case of the other an excess of allowable losses over chargeable gains the excess shall be treated for the said purpose as reduced by the amount by which the other's chargeable gains exceed the other's allowable losses.

Consideration

3 In computing for the purposes of the principal section the amount or value of the consideration for a disposal made by any person there shall be deducted the incidental costs to him of making the disposal.

4 Where by virtue of section 29(1)(b) of the [1970 c. 24.] Finance Act 1970 (taxation of mineral royalties) a chargeable gain is treated as accruing to any person in any year of assessment the amount thereof shall be treated for the purposes of the principal section as consideration for a disposal made by him in that year.

5 If the consideration for any disposal is payable by instalments over a period exceeding eighteen months and beginning not earlier than the time when the disposal is made, then, for the purposes of the principal section, such part only of the consideration as is payable in the year of assessment in which the disposal is made shall be taken into account for that year, but any part payable in a subsequent year of assessment shall be deemed to be a consideration for a disposal made in that subsequent year.

6 Paragraph 14(5) of Schedule 6 to the [1965 c. 25.] Finance Act 1965 (consideration brought into account without discount etc.) shall apply for the purposes of the principal section as it applies for the computation under that Schedule.

7 Paragraph 14(2)(a) of Schedule 7 to the Finance Act 1965 (consideration for option) shall apply for the purposes of the principal section as it applies for the computation of chargeable gains.

Disregard of consideration for certain disposals

8 (1) For the purposes of the principal section the consideration for a disposal shall be disregarded if, under any provision—

(a) it falls to be excluded from the computation of a gain arising on the disposal; or

(b) a gain accruing on the disposal is not a chargeable gain.

(2) Where a disposal satisfies the following conditions, namely—

(a) that it is the disposal of an asset which is tangible movable property; and

(b) that it is not such a disposal as is mentioned in section 30(6) of the Finance Act 1965 (commodities dealt with on terminal market and currency) ; and

(c) that the consideration for it is not disregarded under sub-paragraph (1) above ;

then, if, apart from the disposal and any other disposal satisfying those conditions, the principal section would apply it shall, notwithstanding the disposal, apply for the purpose of determining whether any or what tax is chargeable in respect of disposals not satisfying those conditions but shall not affect the tax chargeable in respect of disposals satisfying those conditions.

Disposals on death

9 Where by virtue of section 24 of the Finance Act 1965 a disposal is deemed to occur on the death (before 31st March 1971) of an individual, the consideration for that disposal shall be disregarded for the purposes of the principal section so far as that section relates to the tax chargeable apart from the death, but this paragraph shall not affect the tax chargeable in respect of the disposal deemed to occur on the death.

Section 59.

SCHEDULE 12 Abolition of Charge on Death

Death not constituting disposal

1 For subsection (1) of section 24 of the Finance Act 1965 there shall be substituted the following subsection:—

“(1) For the purposes of this Part of this Act, the assets of which a deceased person was competent to dispose—

(a) shall be deemed to be acquired on his death by the personal representatives or other person on whom they devolve for a consideration equal to their market value at the date of the death ; but

(b) shall not be deemed to be disposed of by him on his death (whether or not they were the subject of a testamentary disposition)”.

2 At the end of subsection (9) of that section (construction of references to assets of which the deceased was competent to dispose) there shall be added the words “and include references to his severable share in any assets to which, immediately before his death, he was beneficially entitled as a joint tenant ”.

Donatio mortis causa not chargeable gain

3 Notwithstanding section 22(4) of the [1965 c. 25.] Finance Act 1965 no chargeable gain shall accrue to any person on his making a disposal by way of donatio mortis causa.

4 In section 45(1) of the Finance Act 1965, in the definition of “legatee ”, for the words from “and a donatio ” to “gift” there shall be substituted the words " and a person taking under a donatio mortis causa shall be treated (except for the purposes of section 24 of this Act) as a legatee and his acquisition as made at the time of the donor's death ".

5 In sub-paragraph (2) of paragraph 20 of Schedule 7 to the Finance Act 1965 (which makes exceptions to the rule that neither a gain nor a loss accrues on a disposal between husband and wife) the following shall be substituted for paragraph (b)—

“(b) if the disposal is by way of donatio mortis causa”.

Settled property

6 Where, by virtue of subsection (3) of section 25 of the Finance Act 1965, the assets forming part of any settled property are deemed to be disposed of and re-acquired by the trustee on the occasion when a person becomes absolutely entitled thereto as against the trustee, then, if that occasion is the termination of a life interest (within the meaning of that section) by the death of the person entitled to that interest—

(a) no chargeable gain shall accrue on the disposal; and

(b) if on the death the property reverts to the disponer the disposal and re-acquisition under that subsection shall be deemed to be for such consideration as to secure that neither a gain nor a loss accrues to the trustee, and shall, if the trustee had first acquired the property at a date earlier than 6th April 1965, be deemed to be at that earlier date.

7 In section 25(4) of the Finance Act 1965 (notional disposal of all assets of settled property on termination of life interest in all or part of settled property) for the words “all the assets forming part of the settled property, except any which at that time cease to be settled property” there shall be substituted the words “the whole or a corresponding part of each of the assets forming part of the settled property and not ceasing at that time to be settled property ” and for the words “their market value ” there shall be substituted the words " the whole or a corresponding part of the market value of the asset. "

8 At the end of the said section 25(4) there shall be inserted the following paragraph:—

“For the purposes of this subsection a life interest which is a right to part of the income of settled property shall be treated as a life interest in a corresponding part of the settled property”.

9 Where the said section 25(4) applies on the death of the person entitled to the life interest referred to therein, no chargeable gain shall accrue on the disposal deemed to be made under that section.

10 Subsections (3) and (4) of section 25 of the [1965 c. 25.] Finance Act 1965 shall apply, where an annuity which is not a life interest within the meaning of that section is terminated by the death of the annuitant, as they apply on the termination of a life interest by the death of the person entitled thereto.

11 Where a life interest (within the meaning of section 25 of the Finance Act 1965) in settled property is terminated by the death of a person on whose death estate duty falls to be charged on the property by virtue of section 2(1)(b) of the [1894 c. 30.] Finance Act 1894, then—

(a) if the value on which estate duty is so chargeable is not reduced under paragraph 3 of Part II of Schedule 17 to the [1969 c. 32.] Finance Act 1969 or paragraph 3 of Part II of Schedule 1 to the [1969 c. 18 (N.I.).] Finance Act (Northern Ireland) 1969 paragraphs 6 and 9 above shall apply as if that person had been entitled thereto at his death ; and

(b) if that value is so reduced by any percentage, any chargeable gain or allowable loss accruing on the disposal deemed to be made under section 25(3) or 25(4) of the Finance Act 1965 shall be reduced by the complementary percentage, that is to say the percentage found by subtracting the first-mentioned percentage from one hundred per cent.

12 In section 25 of the Finance Act 1965 the following shall be inserted after subsection (4)—

“(4A) Where, by virtue of section 2(1)(b) of the Finance Act 1894, estate duty is chargeable on any property comprised, at the time of a death, in settled property in a case where neither subsection (3) nor subsection (4) above applies, the appropriate portion of each of the assets forming part of the property so comprised shall for the purposes of this Part of this Act be deemed to be disposed of and immediately re-acquired at that time by the trustee for a consideration equal to the appropriate portion of the market value of the asset; but no chargeable gain shall accrue on the disposal. For the purposes of this subsection the appropriate portion is the value on which estate duty is so chargeable divided by the market value of the whole of the settled property at the time of the death.”

13 Section 31(3)(b) of the [1965 c. 25.] Finance Act 1965 (concession on certain notional disposals of settled property) shall not apply in relation to a disposal on which by virtue of this Schedule no chargeable gain or allowable loss accrues to the trustee.

Gifts

14 (1) After section 25 of the Finance Act 1965 there shall be inserted the following section:—

“25A Gifts subject to estate duty.

(1) Where on the death of a person, estate duty falls to be charged, by virtue of section 2(1)(c) of the [1894 c. 30.] Finance Act 1894, on an asset comprised in a gift inter : vivos, and at the time of the death the asset—

(a) is owned by the donee ; or

(b) is property settled by the gift or property which for the purposes of section 38 of the [1957 c. 49.] Finance Act 1957 or section 1 of the [1957 c. 15 (N.I.).] Finance Act (Northern Ireland) 1957 is by virtue of subsection (9) thereof treated as property settled by the gift,

then, subject to subsection (2) below, the asset shall for the purposes of this Part of this Act be deemed to be disposed of and immediately re-acquired at that time by the donee or trustee for a consideration equal to its market value ; but no chargeable gain shall accrue on the disposal.

(2) Where the value on which estate duty is so chargeable is reduced under section 35 of the [1968 c. 44.] Finance Act 1968 or section 1 of the [1968 c. 17 (N.I.).] Finance Act (Northern Ireland) 1968 the appropriate portion only of the asset shall be deemed to be so disposed of and re-acquired and the consideration shall be deemed to be equal to the appropriate portion of the market value of the asset.

For the purposes of this subsection the appropriate portion is the value on which estate duty is chargeable divided by the market value of the asset at the time of the death.”

(2) Section 42(3) of the [1966 c. 18.] Finance Act 1966 shall cease to have effect.

Market value determined for estate duty

15 For section 26 of the Finance Act 1965 there shall be substituted the following section:—

“26 Market value determined for estate duty.

(1) Where estate duty is chargeable in respect of any property passing on a death and the principal value of an asset forming part of that property has been ascertained (whether in any proceedings or otherwise) for the purposes of that duty, the principal value so ascertained shall be taken for the purposes of this Part of this Act to be the market value of that asset at the date of the death.

(2) Where the principal value has been reduced under section 35 of the [1968 c. 44.] Finance Act 1968 or section 1 of the [1968 c. 17 (N.I.).] Finance Act (Northern Ireland) 1968, the reference in subsection (1) above to the principal value as ascertained for the purposes of estate duty is a reference to that value as so ascertained before the reduction.”

Insolvents' assets

16 In paragraph 10(2)(b) of Schedule 10 to the [1966 c. 18.] Finance Act 1966 for the words “disposed of by the deceased ” there shall be substituted the words “acquired by the persons on whom they devolve ”.

Death of heir of entail or proper liferenter

17 In paragraph 4 of Schedule 12 to the Finance Act 1968—

(a) in sub-paragraph (1) for the words “charging of capital gains tax on the death ” there shall be substituted the words “consequences of the death ”;

(b) in sub-paragraph (2) paragraph (a) and, in paragraph (b), the words from “(i) in the case ” to “those assets ” shall be omitted ; and

(c) sub-paragraphs (3) to (9) shall be omitted.

Northern Ireland estate duty

18 In paragraphs 11, 12, 14 and 15 of this Schedule references to estate duty include references to estate duty leviable under the law of Northern Ireland.

Section 67.

SCHEDULE 13 Health Service Agreement between Treasury and Ministry of Finance for Northern Ireland

The Commissioners of Her Majesty's Treasury and the Ministry of Finance for Northern Ireland, with a view to assimilating the burdens on the Consolidated Fund of the United Kingdom and the Exchequer of Northern Ireland in respect of health services, have entered into the following Agreement, which supersedes as from 1st April 1971 the Agreement of 11th February 1949 set out in the Schedule to the [1949 c. 23.] Social Services (Northern Ireland Agreement) Act 1949, as amended by the Agreement of 28th February 1968 set out in Schedule 19 to the Finance Act 1968.

1 (1) There shall be ascertained in respect of each financial year during which this Agreement is in operation the total net cost in Great Britain and in Northern Ireland under the [1946 c. 81.] National Health Service Act 1946 and the [1947 c. 27.] National Health Service (Scotland) Act 1947, as they may be amended from time to time, and the corresponding enactments in Northern Ireland.

(2) The net cost under paragraph (1) above shall be the actual cost as certified annually by the Commissioners of Her Majesty's Treasury as respects the services in Great Britain and by the Ministry of Finance for Northern Ireland as respects the services in Northern Ireland.

(3) The net cost under paragraph (1) above of services in Northern Ireland shall, in relation to the net cost of the corresponding services in Great Britain, be determined subject to such adjustments, if any, as may be necessary to take account, from time to time, of any differences between methods of administration in Great Britain and in Northern Ireland.

2 (1) If in respect of any financial year the total net cost in Northern Ireland under article 1 of this Agreement is less than 2 per cent. of the total net cost in Great Britain and Northern Ireland, there shall be paid from the Exchequer of Northern Ireland to the Consolidated Fund of the United Kingdom a contribution equal to 90 per cent. of the amount by which the said net cost in Northern Ireland is less than the said 2 per cent.

(2) If in respect of any financial year the total net cost in Northern Ireland under article 1 of this Agreement exceeds 2 per cent. of the total net cost in Great Britain and Northern Ireland, there shall be paid to the Exchequer of Northern Ireland out of the Consolidated Fund of the United Kingdom a contribution equal to 90 per cent. of the amount by which the said net cost in Northern Ireland exceeds the said 2 per cent.

3 It is hereby agreed that, subject to such differences as may from time to time exist between the methods of administration in Great Britain and in Northern Ireland of the services covered by this Agreement, the Government of Northern Ireland undertakes to keep the scale and standard of comprehensive health services in Northern Ireland in general conformity with the scale and standard of such services in Great Britain, and to ensure that the rates of remuneration of persons employed in such services in Northern Ireland correspond as nearly as may be with the rates for such services obtaining in Great Britain.

4 Payments on account of such contributions as may ultimately be found to be due under article 2 of this Agreement from the Exchequer of Northern Ireland or from the Consolidated Fund of the United Kingdom shall be made of such amounts and at such times as may be agreed between the Commissioners of Her Majesty's Treasury and the Ministry of Finance for Northern Ireland.

5 Any question arising under this Agreement, whether as to the amount of any adjustments necessary in the determination of net costs in Great Britain and Northern Ireland for the purposes of article 1 of this Agreement, or of any contribution payable under article 2, or otherwise, shall, in default of agreement between the Commissioners of Her Majesty's Treasury and the Ministry of Finance for Northern Ireland, be determined by the Joint Exchequer Board, whose decision shall be final.

6 This Agreement shall not come into operation until confirmed by Acts of the Parliaments of the United Kingdom and Northern Ireland respectively, but upon being so confirmed shall have effect as from 1st April 1971.

In Witness whereof Walter Clegg and Hector Monro two of the Commissioners of Her Majesty's Treasury have hereunto set their hands and seals and the Official Seal of the Ministry of Finance for Northern Ireland has been hereunto affixed this 14th day of April 1971.

Signed Sealed and Delivered by" Walter Clegg one of the Commissioners of Her Majesty's Treasury in the presence of:—	} Walter Clegg (L.S.)
Albert George Nicholson Civil Servant, House of Commons, London S.W.I.
Signed Sealed and Delivered by" Hector Monro one of the Commissioners of Her Majesty's Treasury in the presence of:—	} Hector Monro (L.S.)
Albert George Nicholson Civil Servant, House of Commons, London S.W.I.
The Official Seal of the Ministry" of Finance for Northern Ireland was hereunto affixed in the presence of:—	} H. V. Kirk (L.S.)
D. C. B. Holden Civil Servant, Ministry of Finance, Stormont, Belfast.

Section 69.

SCHEDULE 14 Enactments Repealed

Section 21.

PART I Occupational Pension Schemes

Chapter	Short Title	Extent of Repeal
The above repeals of sections 209 and 211(5) of the Taxes Act take effect from the date appointed by the Treasury for the repeal of section 209.
The other repeals of the Taxes Act and the repeals of the Taxes Management Act 1970 take effect on 6th April 1980.
1970 c. 9.	The Taxes Management Act 1970.	In the Table in section 98(3) the entry (in each column) relating to section 224 of the Taxes Act, but not as regards any penalty incurred before this repeal takes effect.
1970 c. 10.	The Income and Corporation Taxes Act 1970.	Section 19(4)(b).
		Sections 208 and 209.
		Section 211(5).
		Chapter II of Part IX.
		Section 283(4)(b).
		Section 303(3)(i)
		Section 393(2)(b).
1970 c. 24.	The Finance Act 1970.	Section 21(10)(11).
		Section 22(4).
		Section 23(6).
		In section 26(1), in the definition of “administrator ” the words “resident in the United Kingdom ”.
		In Schedule 5, Part I, in Part II, paragraph 5, and in Part III, paragraph 12(2), and in paragraph 12(7) the words “by this Act”.
		In Part III of Schedule 8 the repeals in the Taxes Act (which did not take effect before the passing of this Act).

Section 37.

PART II New Method of Charging Tax

Chapter	Short Title	Extent of Repeal
These repeals have effect subject to section 38 of this Act.
1965 c. 25.	The Finance Act 1965.	In section 21, in subsections (1), (2) and (4), the words “including surtax”, in subsection (2), the words from “as applied” to “surtax ” and in subsection (4), the words “at the standard rate or to surtax ”.
1970 c. 9.	The Taxes Management Act 1970.	In section 7(2), the words from “or in the case ” to the end.
		In section 8, subsections (5) and (6) and in subsection (8), the words from “which are required” to “standard rate ” and the words "for either or both of those purposes."
		In section 12(1), the words “at the standard rate ”.
		In section 22, the words “for the purpose of charging surtax ”.
		In section 29, in subsections (4) and (7), the words "at the standard rate."
		In section 31(3)(a), the words “assessment to surtax, or any other ”.
		In section 33(2), the words from “including ” to “surtax ”.
		In section 55(1), paragraph (b).
		In section 77(1), the words “chargeable at the standard rate ”.
		In section 91(3), paragraph (a) and in paragraph (b), sub-paragraph (i).
1970 c. 10.	The Income and Corporation Taxes Act 1970.	In section 4(1), the words “other than surtax ”.
		Section 6.
		Section 9.
		In section 12(1), in paragraph (iii) of the proviso, the words “of tax”.
		In section 18(1) and (2), the words “seven-ninths of” in the first place where they occur.
		Section 19(8).
		In section 24(1), the words “from tax ”.
		In section 27, the words “other than surtax ” in both places.
		Sections 28 and 29.
		In section 30, in subsection (1), the words from “whether an assessment ” to “years of assessment” and in subsections (3) and (5), the words “for the purposes of surtax ”.
		Sections 31 and 32.
		Section 35.
		Section 37(5).
		In section 38, in subsection (1), the words “other than surtax ” (in both places), and in subsection (3) the words “or (2)”.
		In section 39, in subsection (1), paragraphs (a) and (b) and the words “other than surtax”, in subsection (2) the words “(other than surtax) ”, in both places, and subsection (4).
		In section 40(1)(b), the words “or 38(2)”.
		In section 41(2)(b), the words “whether to income tax other than surtax or to surtax ” and “or 38(2)”.
		In section 42(2), in the proviso, the words “including surtax ”.
		In section 52, in subsection (1), paragraph (a) and in paragraph (c), the words from “at the standard rate ” to “due ” and in subsection (2), the words after “income tax thereon ”.
		In section 53(1), the words after “income tax thereon ”.
		Section 193.
		In section 204(3), the words “other than surtax ”.
		In section 227(5), the words at the standard rate ".
		In section 232(1), in paragraph 2 of Schedule F, the words “thereon at the standard rate ”.
		In section 238(2), the words “other than surtax ”.
		In section 250(2), the words “other than surtax ”.
		In section 286, in subsection (6), the words from “at the standard rate ” to “to the standard rate ” and in subsection (7), the words “for the purposes of surtax ”.
		In section 287(2), the words “as regards surtax ”.
		In section 296(2), the words “for surtax ”.
		In section 297(8), the words “for the purposes of surtax ”.
		In section 298(3), the words “for the purposes of surtax ”.
		In section 299(5), the words for the purposes of surtax ".
		In section 343(2)(b), the words “at the standard rate for the year of assessment”.
		In section 380(2), in paragraph (iii) of the proviso, the words “other than surtax ” in both places.
		In section 381(1), (2)(b) and (3), the words “(including surtax) ” where they occur.
		In section 384, in subsection (1), the words “at standard rate ” and in subsections (1) and (3), the words “(including surtax) ” where they occur.
		In section 390(5), the words “(including surtax) ” where they occur.
		In section 399, in subsection (1) (a), the words from “for the purposes” to “information ”, in subsection (1)(b)(ii), the word “surtax ” and in subsection (1)(c), the words “as regards surtax ”.
		In section 403(1), the words for the purposes of surtax ".
		In section 414, in subsection (1), the words “surtax or” and subsection (2).
		In section 422(2), the words surtax for the year preceding ".
		In section 431(4), the words preceding “an inspector ”.
		In section 432, in subsection (7), the words “As regards surtax” and “surtax ”, in subsection (10), the words from “in the application ” to “surtax ” and subsection (11).
		In section 435(1)(b), the words from “the Board ” to “standard rate ”.
		In section 440(2), the words at the standard rate ".
		In section 441(1)(b), the words from “the Board ” to “standard rate ”.
		In section 443, the words preceding “an inspector ”.
		In section 449, in subsection (1), the words “at the standard rate ” and in subsection (3)(b), the words from “the Board ” to “standard rate ”.
		In section 450(1), the words “for the purposes of surtax ”.
		In section 451(6), the words “at the standard rate ”.
		In section 453, the words preceding “an inspector ”.
		In section 456(4), the words “at the standard rate ”.
		In section 469(1)(ii), the words “at the standard rate” in the first place where they occur.
		In section 480(1), the words “at the standard rate ” in the last place where they last occur.
		In section 481(1) and (2)(b), the words from “or, for the purpose ” to “inspector ”.
		In section 496(6), the words “at the standard rate ”.
		In section 528, in subsection (4), the words “at the standard rate ” and in subsection (5), the words “for the purpose of estimating total income for the purposes of surtax ”.
		In Schedule 3, in paragraph 1, the words “if it relates to surtax or ” and in paragraph 6, the words “tax at the standard rate on ”.
		In Schedule 8, in paragraph 2, the words “at the standard rate ”.
		In Schedule 10, in paragraph 11(1)(b), the words “at the standard rate for that year of assessment ”, in paragraph 11(2)(b) the words “at the standard rate ”, in paragraph 11(3)(b), the words from “at the standard rate ” to the end, in paragraph 11(4), the words from “and nothing ” to the end and in paragraph (12)(2)(b), the words from “at the standard rate ” to the end.
1970 c. 24.	The Finance Act 1970.	Section 11(2).
		In section 14(1), sub-paragraphs (i) to (iii) of paragraph (a) and paragraphs (b) and (d).
		In section 29, in subsection (1)(a), the words “(including surtax) ” and in subsection (4) the words “exclusive of surtax ”.
1970 c. 54.	The Income and Corporation Taxes (No. 2) Act 1970.	In section 2 the words “6(2) and ” and paragraph (a).

Section 55.

PART III Betterment Levy

Chapter	Short Title	Extent of Repeal
These repeals have effect subject to section 55(2) of this Act.
1967 c. 54.	The Finance Act 1967.	Sections 33 and 34.
		Schedules 14 and 15.
1968 c. 44.	The Finance Act 1968.	In Schedule 12, paragraph 6 and the proviso to paragraph 11(4).
1969 c. 32.	The Finance Act 1969.	In Schedule 19, paragraphs 10(7), 11(4), 15(5) and 23.
1970 c. 9.	The Taxes Management Act 1970.	Section 57(2).
1970 c. 10.	The Income and Corporation Taxes Act 1970.	Section 88.
		Section 158(3).
		Section 269(2).
		In section 489(11) the words from “and paragraph ” to “1967 ”.
		Schedule 4.
		In Schedule 15 the entry relating to Schedule 14 to the Finance Act 1967.
1970 c. 24.	The Finance Act 1970.	In section 29, in subsection (2)(b) the words from “including ” to “Act”, and in subsection (3) paragraphs (b) and (c).
		In Schedule 6, Part I; and in paragraph 4(1) the words from “but without prejudice ” to the end.

Section 56.

PART IV Case VII

Chapter	Short Title	Extent of Repeal
These repeals have effect subject to section 56(4) of this Act.
1965 c. 25.	The Finance Act 1965.	Section 17(15).
		In section 27(2), the words from “and section 166(1) ” to “1970 ” and the word “together ”.
		In Schedule 6, paragraph 3, except sub-paragraphs (5), (7) and (8), and paragraph 26(5).
		In Schedule 7, paragraph 2(4).
1968 c. 44.	The Finance Act 1968.	In Schedule 11, paragraph 1(8).
		In Schedule 12, paragraphs 10 to 12.
1969 c. 32.	The Finance Act 1969.	In Schedule 18, paragraphs 4 and 5.
		In paragraph 15 of Schedule 19, in sub-paragraph (1), the words from “and of Chapter ” to “1970 ”, in sub-paragraph (2), the words from “plus” to the end, in sub-paragraph (3), the words “or short-term gain” and, in paragraph (b), the words from “or, as the case may be ” to “disposal ”, in sub-paragraph (7), the words from " ' short-term gains ' means “to the end, and in sub-paragraph (9), the words ” and short-term gains ".
1970 c. 9.	The Taxes Management Act 1970.	Section 9(5).
		In section 98, in Table I, the words “section 167(4)”.
1970 c. 10.	The Income and Corporation Taxes Act 1970.	In section 109(2), the words from “Case VII ” to the end.
		Sections 160 to 167.
		In section 186(12), paragraph (b) and the preceding “and ”.
		In section 208(2), the words from the beginning to “fund, and” and in the proviso the words “from tax or ”.
		In section 211(3), the words from “shall be” to “Schedule D, and ”.
		In section 212(4), the words from “shall be ” to “Schedule D, and ”.
		In section 213(2), the words from “shall be” to “Schedule D, and ”.
		In section 214(4), the words from “shall be” to “Schedule D, and ”.
		In section 216(3), the words from “shall be” to “Schedule D, and ”.
		In section 217(3), the words from “shall be” to “Schedule D, and ”.
		In section 218(2), the words from “shall be” to “Schedule D, and ”.
		In section 226(6), the words from “shall be” to “Schedule D, and”.
		In section 250(6), paragraph (c) and the preceding “or ”.
		In section 270, subsections (1) and (2).
		In section 271, subsections (1) to (3).
		In section 321(1), paragraph (c) and the preceding “and ”.
		In section 360(2), the words from “be exempt from” to “assets, and” and the word “shall” in the second place where it occurs.
		In section 374(1), the words “or VII” and the words “and to short-term capital gains ”.
		Section 418(7).
		Section 444(3) and (4).
		Section 454(2).
		In section 478(8), the words following paragraph (e).
		Schedule 7.
		In Schedule 10, paragraphs 7(4) and 15.
		In Schedule 14, paragraphs 7 and 8.
1970 c. 24.	The Finance Act 1970.	Section 21(6).

Section 59.

PART V Capital Gains—Abolition of Charge on Death etc.

Chapter	Short Title	Extent of Repeal
These repeals have effect in relation to a death occurring or any fifteen years ending, after 30th March 1971.
1965 c. 25.	The Finance Act 1965.	In section 24, subsections (2) to (4).
		Section 24A.
		In section 25, subsections (5), (5A), (6), (7) and (13), and, in subsection (12), the references to subsections (5), (6) and (7).
		In section 31, in subsection (1) the words from “or accruing” to “deceased” the words “or bequest ” (in both places) and the words from “or in the case ” to “from estate duty”; subsection (2); and in subsection (4) the words “subsection (2) or ”.
		In section 32, in subsection (1), the words from “or accruing” to “deceased ”, the words “devise or bequest” (in both places) and the words “or in the case of an asset exempt from estate duty”; and subsection (2).
		In section 34(4), paragraphs (a) and (b) and the word “and ” preceding them.
		In section 44(2), the proviso.
		In section 45(10) the words preceding “references to profits ”.
		In Schedule 6, in paragraph 16, sub-paragraph (1) and, in sub-paragraph (2)(b), the words preceding “any such ”.
		In Schedule 10, in paragraph 4, in sub-paragraph (1), paragraphs (a) and (c) and the word “or ” preceding paragraph (c), and sub-paragraph (3); in paragraph 12(2) the words “and section 24A”; and paragraph 12(3).
1966 c. 18.	The Finance Act 1966.	Section 42(3).
		In Schedule 10, in paragraph 1(2) the words from “and section ” to “death”, in paragraph 1(4) the words “(5), (6) and (7)”; and paragraphs 5 and 10(4).
1968 c. 44.	The Finance Act 1968.	In Schedule 12, in paragraph 4, sub-paragraph (2)(a), in sub-paragraph (2)(b) the words from “(i) in the case” to “those assets”, and sub-paragraphs (3) to (9).
1969 c. 32.	The Finance Act 1969.	In Schedule 17, in Part II, paragraph 13.
		In Schedule 19, paragraph 5 and, in paragraph 8, sub-paragraphs (1) and (2).

Section 64.

PART VI Stamp Duty

Chapter	Short Title	Extent of Repeal
These repeals have effect as from 1st August 1971.
3 & 4 Vict. c. 110.	The Loan Societies Act 1840.	In section 12, the words “and no bond or security so to be given shall be chargeable with any stamp duty whatsoever ”.
8 & 9 Vict. c. 118.	The Inclosure Act 1845.	In section 163, the word “bond ”.
25 & 26 Vict. c. 53.	The Land Registry Act 1862.	In section 73, the words from “and any agreement ” to the end.
54 & 55 Vict. c. 39.	The Stamp Act 1891.	In section 12(6)(b), the words from “shall extend ” to " limit; or ".
		In section 15(2)(d), in the Table, the entry in column 1 beginning “Mortgage ”, and the words in column 2 relating to that entry.
		Section 23.
		Section 56(4).
		Sections 86 to 89.
		In Schedule 1, the heading “Agreement or Contract, accompanied with a deposit ”; in the heading “Annuity”, the words from “creation of” to “section 87”; in the heading “Assignment or Assignation”, the words from “By way of ” to " See Mortgage, &c"; the heading “Back Bond or Back Letter ”; in the heading “Bill of Sale ”, the words " By way of security. See Mortgage, &c"; in the heading beginning “Bond for securing ”, the words " Mortgage, &c, and "; the headings beginning “Bond of any kind whatsoever”, “Bond, accompanied with a deposit of title deeds ”, “Bond, Declaration, or other Deed or Writing ”, “Conveyance or Transfer by way of security”, and “Covenant for securing”; in the heading beginning " Covenant. Any separate deed “, the words ” or mortgage “, ” or mortgaged “and ” or mortgage money", wherever occurring; in the heading beginning “Debenture”, the words " Mortgage, &c, and "; the heading beginning “Deed whereby any real burden is declared ”; both headings beginning “Deed containing an obligation ”; the heading beginning “Defeazance”; the heading “Deposit of title deeds”; the heading “Dispensation ”; in the second heading beginning “Disposition of heritable property ”, the words " Mortgage, &c. and section 86"; the heading “Disposition in security in Scotland ”; the heading " Disposition of any wadset, heritable bond, &c"; the heading “Eik to a reversion”; the heading “Equitable Mortgage”; the heading “Further Charge or Further Security ”; the heading “Heritable Bond ”; the heading “Letter of Reversion in Scotland ”; in the heading “Marketable Security ”, in paragraph (2), the words" Upon a mortgage thereof—see mortgage of stock or marketable security “, and the words ” than a sale or mortgage"; the heading “Marriage Settlement”; the heading “Mortgage of Stock or Marketable Security ”; the heading “Reconveyance, Release, or Renunciation of any security”; in the heading beginning “Release or Renunciation of any property ”, the words "By way of security. See Mortgage, Sec."', in the heading “Renunciation ”, the words “Reconveyance and”; in the heading beginning “Seisin ”, the words “wadset, heritable bond ”; in the heading “Surrender ”, the words “or a mortgage”; the heading “Tack in Security ”; the heading “Wadset ”; the heading beginning “Warrant of Attorney to confess and enter up a judgment ”; in General Exemption (2) , the words “or by way of mortgage”; General Exemption (3) : General Exemption (5)
57 & 58 Vict. c. 60.	The Merchant Shipping Act 1894.	In section 309, the words “and shall not be liable to stamp duty ”.
59 & 60 Vict. c. 25.	The Friendly Societies Act 1896.	Section 33(c).
2 & 3 Geo. 5. c. 31.	The Pilotage Act 1913.	In section 35(2), the words from “Any bond ” to “and ”.
4 & 5 Geo. 5. c. 59.	The Bankruptcy Act 1914.	In section 148, the words “any mortgage charge or other incumbrance on, or ” and the word “bond ”.
15 & 16 Geo. 5. c. 20.	The Law of Property Act 1925.	In section 115, in subsection (5), the words from “and where it takes” to the end and, in subsection (9), the words from “but nothing in this section ” to the end.
11 & 12 Geo. 6. c. 38.	The Companies Act 1948.	In section 339(1)(a), the words “any mortgage, charge or other encumbrance on, or” and in section 339(1)(b), the word “bond ”.
1 & 2 Eliz. 2. c. 34.	The Finance Act 1953.	In section 31(1)(b), the words “or bond ”.
6 & 7 Eliz. 2. c. 56.	The Finance Act 1958.	In section 35, subsections (1) to (3).
10 & 11 Eliz. 2. c. 37.	The Building Societies Act 1962.	In section 117, in paragraph (f), the words “(other than a mortgage) ” and in paragraph (i) the words “other than a mortgage ”.
1965 c. 12.	The Industrial and Provident Societies Act 1965.	In section 34(4), the words from “and such receipts ” to the end.
1965 c. 51.	The National Insurance Act 1965.	In Schedule 9, paragraph 3, the words “bond or other security ”.
1965 c. 52.	The National Insurance (Industrial Injuries) Act 1965.	In Schedule 6, paragraph 3, the words “bond or other security ”.
1967 c. 54.	The Finance Act 1967.	In section 28(2), the words “trust deed or other ” (where first occurring) and the words "or that beginning ' Mortgage, Bond, Debenture, Covenant'".
1969 c. 50.	The Trustee Savings Bank Act 1969.	In section 89(c), the words ' a surety-bond ".
1970 c. 24.	The Finance Act 1970.	In Schedule 7, paragraphs 1(3)(a) and 8.
1970 c. 35.	The Conveyancing and Feudal Reform (Scotland) Act 1970.	Section 16(3).

PART VII Miscellaneous Repeals

Chapter	Short Title	Extent of Repeal
NOTES: 1. The repeal of the Act of 1949 and of section 59 of and Schedule 19 to the Finance Act 1968 takes effect on the coming into operation of section 67(1) of this Act. 2. The repeals in section 33 of the Finance Act 1965 have effect with respect to acquisitions on or after 20th April 1971. 3. The repeal in section 3(10) of the Finance Act 1969 has effect as from 13th April 1971. 4. The repeal in section 10(5) of the Taxes Act, the repeal of sections 43 to 48 of that Act and the repeals in sections 168(4) and 444(1) of that Act, have effect for the year 1972-73 and subsequent years of assessment.
12, 13 & 14 Geo. 6. c. 23.	The Social Services (Northern Ireland Agreement) Act 1949.	The whole Act.
15 & 16 Geo. 6 & 1 Eliz. 2. c. 44.	The Customs and Excise Act 1952.	Sections 47(2) and 86(3).
1965 c. 25.	The Finance Act 1965.	In section 33, in subsection (1) the words " one and the same one, of; " and subsection (4).
1968 c. 13.	The National Loans Act 1968.	Section 16(8).
1968 c. 44.	The Finance Act 1968.	Section 31, as regards any year of assessment later than 1970-71.
		Section 59.
		Schedule 19.
1969 c. 32.	The Finance Act 1969.	In section 3(10), in the definition of “bingo”, the words from “except” onwards.
		Section 50.
1970 c. 10.	The Income and Corporation Taxes Act 1970.	In section 10(5) proviso, the words from “of any income falling ” to “child, or ”.
		In section 24(1), the words “or allowances ” and the words “for each allowance if more than one ”.
		Sections 43 to 48.
		In section 168(4), the words from “and then ” to " or that person's wife or husband ".
		In section 444(1), all the words after “illegitimate child ”.
		In section 498(4) the words “to the Commonwealth territories and ”.
		In section 500(1) the definition of “Commonwealth territory ”.
		In section 507, subsections (2) and (3).
1970 c. 24.	The Finance Act 1970.	In section 14(1), paragraphs (c) and (e).
1970 c. 54.	The Income and Corporation Taxes (No. 2) Act 1970.	Section 2(b), with effect from 6th April 1972.