Finance Act 1958

PART I Purchase Tax

1 Rates of tax, and descriptions of chargeable goods

(1) Subject to any order of the Treasury made after the passing of this Act under section twenty-one of the Finance Act, 1948, there shall be made the changes in purchase tax provided for by the First Schedule to this Act.

(2) Accordingly Part I of the Second Schedule to this Act (which reproduces with the said changes the effect of Part I of the Eighth Schedule to the Finance Act, 1948, as set out in the Purchase Tax (Consolidation) Order, 1956, and subsequently amended) shall have effect for determining what goods are chargeable goods for the purposes of purchase tax and the rates of purchase tax chargeable in respect of goods of any class; and Part II of the said Second Schedule shall have effect for the purpose of adapting references to Part I of the Eighth Schedule to the said Act of 1948.

(3) Subsection (1) of this section and the First Schedule to this Act shall be deemed to have had effect from the sixteenth day of April, nineteen hundred and fifty-eight, save as otherwise provided in that Schedule, but subsection (2) and the Second Schedule shall not have effect until the beginning of October, nineteen hundred and fifty-eight (except as respects the making of orders by the Treasury).

2 Meaning of " business "

(1) For the purposes of the enactments relating to purchase tax, and in particular of section eighteen of the Finance Act, 1946 (which, among other things, requires the registration of a person applying a chargeable process in the course of or for the purposes of his business), the performance by a local authority of the functions of the authority and the carrying out by any other body of persons, whether incorporated or not, of the objects of that body shall be deemed to constitute a business of the authority or body.

(2) This section shall be deemed to have had effect from the sixteenth day of April, nineteen hundred and fifty-eight.

PART II Customs and Excise

3 Entertainments duty

(1) Subject to subsection (2) of section one of the Entertainments Duty Act, 1958 (which provides for a reduced rate of duty in the case of certain mixed entertainments), the amount of entertainments duty chargeable on any payment for admission to an entertainment given after the third day of May, nineteen hundred and fifty-eight, shall be one-third of the amount, if any, by which the total amount of the payment (not excluding the amount of the duty) exceeds one shilling and six pence; and if before the date of the passing of this Act duty has been charged on any such payment, and by virtue of this subsection a less amount of duty or no duty should have been charged, the person by whom the duty was paid shall be entitled to repayment of the overcharge.

(2) In the case of entertainments given after the fourth day of October, nineteen hundred and fifty-eight, entertainments duty shall not be paid by means of stamps, but shall in all cases be accounted for and paid by the proprietor of the entertainment in accordance with regulations of the Commissioners of Customs and Excise made under section six of the Entertainments Duty Act, 1958 ; and as respects entertainments so given those regulations may in particular include provision for all or any of the following matters—

(a) for ascertaining the amounts of duty chargeable, for regulating and recording admissions to chargeable entertainments, and for requiring security for the payment of duty;

(b) for requiring the proprietor of an entertainment to give the Commissioners prior notice of it, and to furnish such other information about it as may be required of him, to keep and produce records and make returns of admissions to the entertainment and of payments for admission, and to display notices stating the prices of admission.

(3) For any failure to comply with an obligation under the regulations to account for or pay the duty chargeable in respect of any payment for admission, the penalty under subsection (3) of the said section six shall be fifty pounds or three times the amount of the duty, whichever is the greater.

(4) Section seven of the Entertainments Duty Act, 1958 (which authorises the Commissioners to delegate their powers with respect to entertainments and entertainments duty to local authorities and police authorities), shall cease to have effect.

(5) In section nine of the Entertainments Duty Act, 1958 (which relates to the interpretation of that Act), any reference to that Act shall include a reference to this section and any other enactment relating to entertainments duty.

4 Wines

(1) In lieu of the duties of customs charged on wines under section four of the Finance Act, 1949, there shall be charged on wines imported into the United Kingdom duties of customs at the rates set out in the Third Schedule to this Act, the rates specified in the second column of that Schedule applying to wines which do not qualify for Commonwealth preference and those specified in the third column to wines which do:

Provided that each of the rates specified in that Schedule for light wines which qualify for Commonwealth preference shall be increased by one shilling, unless the Treasury by order direct otherwise.

(2) Subsections (2) to (9) of section two of the Import Duties Act, 1958 (which define the goods qualifying for Commonwealth preference under that Act), shall apply for the purposes of this section as they apply for the purposes of that section; and subsections (1) to (4) of section thirteen of that Act (which relate to the making, revocation, annulment and approval of orders under that Act) shall apply in relation to orders under subsection (1) of this section as they apply in relation to orders under that Act.

(3) For the purposes of this section " wine " includes the lees of wine.

(4) The foregoing provisions of this section shall have effect from the beginning of the year nineteen hundred and fifty-nine ; and as respects the period between the fifteenth day of April, nineteen hundred and fifty-eight, and the coming into force of those provisions section four of the Finance Act, 1949, shall have and be deemed to have had effect as if the rates of duty specified in the second and third columns of the Second Schedule to that Act for wines other than light wines had been those specified in the second and third columns of the Third Schedule to this Act.

5 Sweets

(1) There shall be charged on sweets, in lieu of the duty charged under section six of the Finance Act, 1927, a duty of excise at the rates shown in the Fourth Schedule to this Act.

(2) This section shall be deemed to have had effect as from the sixteenth day of April, nineteen hundred and fifty-eight.

6 Repeal of spirits duty on certain methyl alcohol

(1) Methyl alcohol, notwithstanding that it is so purified or prepared as to be potable, shall not be deemed for the purposes of the Customs and Excise Act, 1952, to be spirits nor be chargeable with the customs and excise duties on spirits, nor shall naphtha or any mixture or preparation containing naphtha or methyl alcohol and not containing spirits within the meaning of that Act.

(2) Methyl alcohol shall be included among the alcohols mentioned in subsection (2) of section one hundred and fifteen of that Act (which empowers the Commissioners of Customs and Excise for the purpose of protecting the revenue arising from the said duties to make regulations relating to those alcohols).

(3) This section shall have effect as from the first day of August, nineteen hundred and fifty-eight.

7 Date and periods of road vehicle licences

(1) Subject to the provisions of this section, licences under the Vehicles (Excise) Act, 1949 (other than the annual licence provided for by section one of that Act and other than trade licences), may be taken out for such periods as may be prescribed by order of the Minister of Transport and Civil Aviation, being periods of a fixed number of months (not exceeding fifteen) running from the beginning of the month in which the licence first has effect.

(2) A licence for any period prescribed by an order under the foregoing subsection shall be taken out on payment of duty at such rate as may be so prescribed:

Provided that—

(a) the rate of duty on any licence taken out for a period of twelve months shall be the same as on the corresponding annual licence provided for by section one of the said Act, and any other rate of duty shall be such as to bear to that rate no less proportion than the number of months for which the licence is taken out bears to a year; and

(b) the rate of duty for any licence taken out for a period of three months or for a period of four months shall not exceed for each month of the period ten per cent. of the duty on the corresponding annual licence.

(3) Any order made by the Minister under this section may be made so as to apply only to vehicles of specified descriptions and may make different provision for vehicles of different descriptions or for different circumstances; and the power to make orders under this section shall be exercisable by statutory instrument and shall include power to vary or revoke any order so made.

(4) On the surrender of a licence, not being a licence for a period ending at or before the end of the year nineteen hundred and fifty-eight, the amount of any repayment under subsection (2) of section twelve of the Vehicles (Excise) Act, 1949, shall, in all cases except that of a general trade licence taken out for one quarter of the year, be that specified in paragraph (b) of that subsection (that is to say, one-twelfth of the full annual duty for each complete month unexpired of the period of the currency of the licence) ; and for paragraph (a) of that subsection there shall be substituted—

“(a) in the case of a general trade licence taken out for one quarter of a year only, an amount equal to one-third of the duty charged on that licence”.

(5) In subsection (5) of section eleven of the Vehicles (Excise) Act, 1949 (which authorises the issue of general trade licences for one quarter of the year only), the expression " quarter" shall, as respects the year nineteen hundred and fifty-nine or any later year, mean any period of three months beginning with the first day of January, of April, of July or of October.

(6) An order made under this section as respects any description of vehicles may provide that for one (but not more than one) of the first three years in which licences of the kind provided for by subsection (1) of this section may be issued for vehicles of that description, annual licences shall not be issued for those vehicles in any cases prescribed by the order, being cases in which the order provides instead for the issue of licences for some period of not less than eleven months.

(7) This section shall have effect in place of subsections (2) and (4) of section eleven of the Vehicles (Excise) Act, 1949 ; but neither this section nor any repeal by this Act of a provision contained in or amending section eleven or twelve of that Act shall affect the operation of that Act in relation to licences for any description of vehicles, except as respects licences issued after the date on which an order comes into force under this section with respect to vehicles of that description.

8 Use of motor vehicle unlicensed an way to or from compulsory test, etc.

(1) A mechanically propelled vehicle shall not be chargeable with any duty under the Vehicles (Excise) Act, 1949, by reason of its use on public roads—

(a) for the purpose of submitting it by previous arrangement for, or bringing it away from, a compulsory test; or

(b) where a test certificate is refused on a compulsory test, for the purpose of delivering it by previous arrangement at, or bringing it away from, a place where work is to be or has been done on it to remedy for a further compulsory test the defects on the ground of which the test certificate was refused.

(2) In this section " test certificate " has the same meaning as in the Road Traffic Act, 1956, and " compulsory test" means an examination under section one of that Act with a view to obtaining a test certificate without which a licence cannot be granted for the vehicle under the Vehicles (Excise) Act, 1949.

9 Use of trade licences for collection and delivery of road vehicles

(1) The purposes for which the holder of a trade licence within the meaning of the Vehicles (Excise) Act, 1949, may be authorised to use the licence by regulations under section ten of that Act shall not include the collection or delivery of mechanically propelled vehicles on or by means of another mechanically propelled vehicle except in connection with activities which would be treated for the purposes of the said section ten as part of his business as a motor trader apart from subsection (5) of section seven of the Finance Act, 1952 (under which in certain circumstances the collection and delivery of motor vehicles is to be treated as itself constituting or forming part of the business of a motor trader).

(2) This section shall not invalidate any regulations made under the said section ten before the coming into force of this section, but the purposes for which they authorise trade licences to be used shall be taken to be limited in accordance with the foregoing subsection.

(3) This section shall come into force on the first day of January, nineteen hundred and fifty-nine, or such later date (if any) as may be appointed by order of the Minister of Transport and Civil Aviation made by statutory instrument.

10 Extension of time for repayments to tobacconists on pensioners' tokens

Paragraph 4 of the Sixth Schedule to the National Insurance (No. 2) Act, 1957 (which contained transitional provisions in connection with the withdrawal of the pensioner's tobacco relief under section four of the Finance Act, 1947), shall have, and be deemed to have had, effect as if the date specified in sub-paragraph (3) as the latest date on which tokens may be surrendered by a dealer had been the thirtieth day of September, nineteen hundred and fifty-eight (instead of, in the events which happened, the thirty-first day of March).

11 Dog licences

The proviso to subsection (4) of section six of the Finance Act, 1908 (under which, on a change in the rate of any duty transferred by that section to local authorities in England and Wales, the transfer becomes inoperative), shall cease to apply to the duty on dog licences ; and accordingly those licences and the duty on them shall in England and Wales cease to be excise licences or an excise duty for any purpose (but without prejudice to the operation of the excise Acts in relation to them, in so far as those Acts apply at the coming into force of this section).

PART III Income Tax

12 Charge of tax for 1958-59

Income tax for the year 1958-59 shall be charged at the standard rate of eight shillings and sixpence in the pound, and, in the case of an individual whose total income exceeds two thousand pounds, at such higher rates in respect of the excess as Parliament may hereafter determine.

13 Surtax rates for 1957-58

Income tax for the year 1957-58 shall be charged, in the case of an individual whose total income exceeded two thousand pounds, at the same higher rates in respect of the excess as were charged for the year 1956-57.

14 Increase of personal reliefs

(1) In section thirteen of the Finance Act, 1957 (relief for persons over sixty-five with small incomes)—

(a) for the references to two hundred and fifty pounds and four hundred pounds (which refer to the income limits for exemption under that section) there shall be substituted references to two hundred and seventy-five pounds and four hundred and forty pounds respectively ; and

(b) for the reference to fifty pounds (which refers to the excess over those limits by reference to which relief under that section by reduction of tax is limited) there shall be substituted a reference to fifty-five pounds.

(2) In subsections (2) and (3) (old age relief) of section two hundred and eleven of the Income Tax Act, 1952, for the references to seven hundred pounds (which refer to the income limit for the full relief under subsection (2)) there shall be substituted references to eight hundred pounds.

(3) In section two hundred and sixteen of the Income Tax Act, 1952 (dependent relatives), for the references to one hundred and sixty-five pounds and one hundred and five pounds (which refer to the income of the dependent relative) there shall be substituted respectively references to one hundred and ninety-five pounds and one hundred and thirty-five pounds.

(4) Subsections (1) and (2) of this section shall not be deemed to have required any change in the amounts deducted or repaid under section one hundred and fifty-seven (pay as you earn) of the Income Tax Act, 1952, before the twenty-second day of June, nineteen hundred and fifty-eight.

15 Increase of certain initial allowances

(1) An initial allowance under Chapter I (industrial buildings and structures, etc.) of Part X of the Income Tax Act, 1952, in respect of expenditure to which this section applies shall be equal to three-twentieths of the expenditure, and accordingly in relation to such an allowance subsection (1) of section two hundred and sixty-five of that Act shall have effect with the substitution of the words " three-twentieths " for the words " one-tenth ".

(2) An initial allowance under Chapter II (machinery and plant) of the said Part X in respect of expenditure to which this section applies shall be equal to three-tenths of the expenditure, and accordingly, in relation to such an allowance—

(a) subsection (2) of section sixteen of the Finance Act, 1953 (which in relation to certain expenditure reduced the rates of initial allowances under the said Chapter II from two-fifths to one-fifth) shall not apply;

(b) subsection (1) of section two hundred and seventy-nine of the said Act of 1952 shall have effect with the substitution of the words " three-tenths " for the words " two-fifths ";

(c) sub-paragraph (2) of paragraph 3 of the Fourteenth Schedule to the said Act of 1952 shall have effect with the substitution in paragraph (d) and paragraph (i) of the words " seven-tenths " for the words " three-fifths ".

(3) Notwithstanding subsection (3) of section fifteen of the Finance Act, 1956 (which exempted certain fuel economy expenditure from the suspension of investment allowances), an initial allowance under Chapter I or Chapter II of the said Part X shall, if the person entitled so elects, be made instead of an investment allowance in respect of any such expenditure as is mentioned in paragraph (a) or paragraph (b) of that subsection, being expenditure to which this section applies.

(4) An initial allowance under section seventeen of the Finance Act, 1956 (dredging), in respect of expenditure to which this section applies shall be equal to three-twentieths of the expenditure, and accordingly in relation to such an allowance that section shall have effect with the substitution in paragraph (a) of subsection (1) thereof of the words " three-twentieths " for the words " one-tenth ".

(5) Subject to the next following subsection, this section applies to expenditure incurred on or after the fifteenth day of April, nineteen hundred and fifty-eight; but expenditure shall not be treated for the purposes of this section as having been so incurred by virtue of the following provisions, that is to say—

(a) subsection (6) of section two hundred and sixty-five or subsection (2) of section two hundred and seventy-nine of the Income Tax Act, 1952 (which relate to expenditure incurred by a person for the purposes of a trade before he begins to carry it on);

(b) subsection (4) of section two hundred and sixty-five and subsection (2) of section two hundred and seventy-seven of that Act (which relate to cases where mills, factories, etc., allowances cease to be allowable);

if it would not be so treated apart from those provisions.

(6) This section does not apply to any expenditure in respect of which an initial allowance under Chapter II of Part X of the Income Tax Act, 1952, may be made by virtue of the proviso to subsection (5) of section two hundred and seventy-nine of the said Act of 1952.

16 Fees and subscriptions to professional bodies, learned societies, etc.

(1) Subject to the following provisions of this section, the following may be deducted from the emoluments of any office or employment to be assessed to tax, if defrayed out of those emoluments, that is to say.—

(a) any fee or contribution mentioned in the Fifth Schedule to this Act;

(b) any annual subscription paid to a body of persons approved for the purposes of this section by the Commissioners of Inland Revenue.

(2) The Commissioners of Inland Revenue may on the application of the body approve for the purposes of this section any body of persons not of a mainly local character whose activities are carried on otherwise than for profit and are solely or mainly directed to all or any of the following objects, that is to say.—

(a) the advancement or spreading of knowledge (whether generally or among persons belonging to the same or similar professions or occupying the same or similar positions) ;

(b) the maintenance or improvement of standards of conduct and competence among the members of any profession ;

(c) the indemnification or protection of members of any profession against claims in respect of liabilities incurred by them in the exercise of their profession.

(3) If the activities of a body approved for the purposes of this section are to a significant extent directed to objects other than those mentioned in subsection (2) of this section the Commissioners may determine that such specified part only of any annual subscription paid to the body may be deducted under this section as corresponds to the extent to which its activities are directed to objects mentioned in that subsection; and in doing so the Commissioners shall have regard to all relevant circumstances and, in particular, to the proportions of the body's expenditure attributable to the furtherance of objects so mentioned and other objects respectively.

(4) A fee, contribution or subscription shall not be deducted under this section from the emoluments of any office or employment unless—

(a) the fee is payable in respect of a registration (or retention of a name in a roll or record) or certificate which is a condition or one of alternative conditions of the performance of the duties of the office or employment or, as the case may be, the contribution is payable on the issue of such a certificate ;

(b) the subscription is paid to a body the activities of which, so far as they are directed to the objects mentioned in subsection (2) of this section, are relevant to the office or employment, that is to say, the performance of the duties of the office or employment is directly affected by the knowledge concerned or involves the exercise of the profession concerned.

(5) Any approval given and any determination made under this section may be withdrawn, and any such determination varied, so as to take account of any change of circumstances; and where a body is approved for the purposes of this section in pursuance of an application made before the end of any year of assessment a deduction may be made under this section in respect of a subscription paid to the body in that year, whether the approval is given before or after the end of that year.

(6) Any body aggrieved by the failure of the Commissioners of Inland Revenue to approve the body for the purposes of this section, or by their withdrawal of the approval, or by any determination made by them under this section or the variation of or a refusal to withdraw or vary such a determination may, by notice in writing given to the Commissioners within thirty days from the date on which the body is notified of their decision, require the matter to be determined by the Special Commissioners, and the Special Commissioners shall thereupon hear and determine the matter in like manner as an appeal made to them against an assessment under Schedule D; and the provisions of the Income Tax Acts relating to such appeals (including the provisions relating to the statement of a case for the opinion of the High Court on a point of law) shall apply accordingly with the necessary modifications.

(7) References in the Income Tax Acts to paragraph 7 of the Ninth Schedule to the Income Tax Act, 1952, shall be construed as including references to this section, and the proviso to subsection (1) of section one hundred and sixty of that Act shall apply to a deduction under this section as it applies to a deduction under the said paragraph 7 in respect of money expended wholly, exclusively and necessarily in performing the duties of the office or employment.

17 Amendment as to reliefs in respect of property belonging to charities and certain other institutions or occupied by ministers of religion

(1) The amount of the total income of a person occupying or having the use and enjoyment of any property shall not affect—

(a) the allowance directed by paragraph (c) of subsection (1) of section one hundred and three of the Income Tax Act, 1952, to be made under Schedule A in respect of public buildings, offices and premises belonging to any hospital, public school or almshouse;

(b) the exemption granted by paragraphs (a) and (b) of subsection (1) of section four hundred and forty-eight of that Act in respect of property owned and occupied or, as the case may be, occupied by a charity.

(2) Subsection (3) of section four hundred and seventy-nine of the Income Tax Act, 1952 (which relates to certain dwelling-houses occupied by ministers of religion), is hereby repealed.

18 Purchases of shares by financial concerns and persons exempted from tax

(1) Section four of and the Third Schedule to the Finance (No. 2) Act, 1955 (which make provision as to the treatment of certain dividends paid to any extent out of accumulated profits), shall have effect subject to the amendments specified in subsections (2) to (4) of this section.

(2) In subsection (3) of the said section four, for the words " and in doing so were acting in concert" there shall be substituted the words " and the transactions in pursuance of which the acquisition was made were either transactions entered into by those persons acting in concert or transactions together comprised in any arrangements made by any person ".

(3) In sub-paragraph (3) of paragraph 5 of the said Third Schedule, the following shall be inserted after paragraph (c):— “and

(d) if the company is not engaged in carrying on such a trade as is mentioned in subsection (1) of section four of this Act and has received in a year of assessment in the period a dividend which, if the company had been engaged in such a trade, would have been required by the said subsection (1) to be brought into account to any extent as mentioned therein, such amount as would, after deduction of income tax at the standard rate in force in that year of assessment, be equal to the amount which would have been so required to be brought into account,”

(4) At the end of paragraph 4 of the said Third Schedule there shall be added the following sub-paragraph:—

“(3) In ascertaining for the purposes of this paragraph the amount of income tax and profits tax by which the income of the company for the period is to be diminished any tax on the amount to be deducted under paragraph (d) of sub-paragraph (3) of paragraph 5 of this Schedule shall be left out of account.”

(5) Where such a company as is mentioned in the new paragraph (d) set out in subsection (3) of this section has received such a dividend as is mentioned therein, any question whether any dividend on shares in that company is to be brought into account as mentioned in subsection (1) of the said section four or whether any exemption from income tax extending to any dividend on such shares is to be excluded to any extent by subsection (2) of that section shall be determined as if the words "being shares sold or issued to him or otherwise acquired by him alter the twenty-sixth day of October, nineteen hundred and fifty-five, and not more than six years before the date on which the dividend becomes payable " in subsection (1) of the said section four, and all similar expressions in that section, were omitted.

(6) Where a person has acquired any shares before the sixteenth day of April, nineteen hundred and fifty-eight,—

(a) nothing in subsection (2) of this section shall require him to bring into account as mentioned in subsection (1) of the said section four the amount of any dividend received by him on those shares or exclude to any extent any exemption from income tax extending to dividends so received by him ; and

(b) subsection (3) of this section shall have effect, in relation to any dividend received by him on those shares, as if in the new paragraph (d) set out in that subsection the reference to a dividend received by the company did not include any dividend on shares acquired by the company before the said sixteenth day of April;

and subsections (5) and (6) of the said section four (which make provision as to the time at which and the person by whom shares are to be treated as having been acquired), and the definition of "share" in subsection (8) of that section, shall apply for the purposes of this subsection.

19 Disallowance for certain purposes of dividends paid out of accumulated profits

(1) Where a person carries on a trade other than such a trade as is mentioned in subsection (1) of section four of the Finance (No. 2) Act, 1955, and his income for any year of assessment includes a dividend the net amount of which would, if the trade were such a trade as is mentioned in that subsection, be required to any extent to be brought into account as a trading receipt which has not borne tax, then, in ascertaining whether any or what repayment of tax is to be made to that person under section three hundred and forty-one of the Income Tax Act, 1952, subsection (3) of section fifteen of the Finance Act, 1953, or paragraph 3 of the Third Schedule to the Finance Act, 1954, by reference to any loss sustained in the trade and the aggregate amount of his income for the said year of assessment, there shall be left out of account—

(a) the gross amount corresponding to so much of the said net amount as would have been required to be brought into account as aforesaid ; and

(b) any tax paid on the amount required to be left out of account under paragraph (a) of this subsection.

(2) Where—

(a) a company carries on a trade other than such a trade as is mentioned in subsection (1) of section four of the Finance (No. 2) Act, 1955 ; or

(b) the business of a company consists mainly in the making of investments;

and the company's income for any year of assessment includes a dividend the net amount of which would, if the company carried on such a trade as is mentioned in the said subsection (1), be required to any extent to be brought into account as a trading receipt which has not borne tax.—

(i) the gross amount corresponding to so much of the said net amount as would have been required to be brought into account as aforesaid shall be left out of account in determining for the purposes of section twenty of the Finance Act, 1953 (which relates to payments between associated companies in respect of losses), whether the company has any surplus for tax purposes during any period or what is the amount of that surplus; and

(ii) if any annual payment payable by the company is to any extent payable out of the said dividend, that annual payment shall be deemed to that extent not to be payable out of profits or gains brought into charge to tax, and section one hundred and seventy of the Income Tax Act, 1952, shall apply accordingly.

(3) Where the shares on which the dividend is paid were acquired by the said person or company before the sixteenth day of April, nineteen hundred and fifty-eight, the foregoing provisions of this section shall not apply to the net amount of the dividend except to the extent (if any) that, if the trade or business were such a trade as is mentioned in subsection (1) of section four of the said Act of 1955, the said amount—

(a) would be required to be brought into account as aforesaid by virtue of the last foregoing section; but

(b) would not be required to be so brought into account apart from that section.

(4) Where shares in a company were acquired by another company from a third company at a time when the three companies were associated, any question whether or to what extent a dividend on those shares was paid out of profits accumulated before the acquisition, shall, for the purposes of this section (but for no other purposes), be determined as if the acquisition had taken place at whichever of the following times is the later, that is to say—

(a) the time when the shares were acquired by the said third company;

(b) the time when the said other company and the said third company became associated ;

except that if the said third company had acquired the shares from a fourth company at a time when the four companies were associated, the foregoing provisions of this subsection shall have effect as if for the references in paragraphs (a) and (b) to the third company there were substituted references to the fourth company and for the reference in paragraph (b) to the said other company a reference to the third company; and so on for any greater number of associated companies.

In this subsection " associated " means, as regards two companies, that one is a subsidiary of the other or both are subsidiaries of a third company, and, as regards three or more companies, that one is associated with each of the others; and " subsidiary " has the meaning assigned to it for certain purposes of the profits tax by section forty-two of the Finance Act, 1938.

(5) Subsections (5) and (6) of section four of the said Act of 1955 (which make provision as to the time at which and the person by whom shares are to be treated as having been acquired), and the definitions of " company " and " share " in subsection (8) of that section, shall apply for the purposes of this section.

20 Settlements on children

(1) Chapter II of Part XVIII of the Income Tax Act, 1952 (which relates to settlements on children), shall be amended in accordance with the following provisions of this section.

(2) In relation to a payment to which this subsection applies, the words " at the time of the payment" shall be substituted for the words " at the commencement of that year " in subsection (1) of section -three hundred and ninety- even of that Act (which relates to payments in any year of assessment to or for the benefit of a child who at the commencement of that year was an infant and unmarried) and for the words " at the commencement of the year of assessment in which the sum is paid " in paragraph (b) of subsection (2) of section three hundred and ninety-eight of that Act (which makes provision supplementary to the said section three hundred and ninety-seven).

(3) The reference in the said paragraph (b) to another sum previously paid to or for the benefit of a child who, at the commencement of the year of assessment in which it was paid, was an infant and unmarried, shall be construed, in relation to a payment to which this subsection applies of any such sum, as a reference to a sum so paid to or for the benefit of a child who at the time of the payment was an infant and unmarried.

(4) Subsections (2) and (3) of this section apply to any payment made after the year 1957-58, except a payment made in the year 1958-59 to or for the benefit of a child born after the sixth day of April, nineteen hundred and fifty-eight, and so made by virtue or in consequence of a settlement made before the ninth day of July of that year.

(5) In paragraph (ii) of the proviso to section three hundred and ninety-nine of the Income Tax Act, 1952 (which enables a settlement to be treated as irrevocable for the purposes of the said Chapter II notwithstanding that it provides for its determination, if the determination will not, during the lifetime of such a child as is mentioned in that section, benefit any person other than such a child, or the wife, husband or issue of such a child), for the words from " any person " to " issue of such a child " there shall be substituted the words " the settlor or the wife or husband of the settlor ".

(6) In relation to a settlement which would not have been irrevocable within the meaning of the said Chapter II but for subsection (5) of this section, the reference in paragraph (b) of subsection (2) of the said section three hundred and ninety-eight to the date when it became irrevocable shall be construed as referring to the sixth day of April, nineteen hundred and fifty-eight.

21 Revocable settlements and settlements made abroad

(1) In subsection (1) of section four hundred and four of the Income Tax Act, 1952.—

(a) the references to a power to revoke or otherwise determine a settlement or any provision thereof shall be deemed to include references to any power to diminish the amount of any payments which are or may be payable under the settlement or any provision thereof and to any power to diminish the amount of any annual payments which the settlor or the wife or husband of the settlor is or may be liable to make by virtue or in consequence of any provision of the settlement;

(b) the references to the settlor or the wife or husband of the settlor ceasing to be liable to make any annual payments payable by virtue or in consequence of any provision of the settlement shall be deemed to include references to a diminution of the amount of any such annual payments which the settlor or the wife or husband of the settlor is or may be liable to make ;

but the sums to be treated under the said subsection (1) as the income of the settlor for any year of assessment and not as the income of any other person shall, where that subsection would not apply but for paragraph (b) of this subsection, be such part only of the sums payable as aforesaid by the settlor or the wife or husband of the settlor in that year as corresponds to the diminution mentioned in that paragraph.

(2) In subsection (2) of the said section four hundred and four the references to a power to revoke or otherwise determine a settlement or any provision thereof shall be deemed to include references to—

(a) any power to diminish the property comprised in the settlement; and

(b) any power to diminish the amount of any payments which are or may be payable under the settlement or any provision thereof to any person other than the settlor and the wife or husband of the settlor.

(3) Subject to subsection (4) of this section, the foregoing provisions of this section shall apply for all the purposes of income tax for the year 1958-59 and subsequent years of assessment and also for estimating an individual's total income for the purposes of surtax for the year 1957-58.

(4) Where, in the case of any settlement made before the sixteenth day of April, nineteen hundred and fifty-eight, any sums payable by the settlor or by the wife or husband of the settlor, or any income arising under the settlement, would, by virtue of the foregoing provisions of this section, fall to be treated (whether for purposes of surtax or for all the purposes of income tax) as the income of the settlor and not as the income of any other person, but would not fall to be so treated apart from those provisions, the sums or income shall not be so treated if—

(a) no power by reason of which they or it would fall to be so treated has been exercised after the fifteenth day of April, nineteen hundred and fifty-eight, or is or can become exercisable after the fifth day of April, nineteen hundred and fifty-nine, or such later date as the Commissioners of Inland Revenue may in any particular case allow; and

(b) neither the settlor nor the wife or husband of the settlor has received or is entitled to any consideration or benefit in connection with the fulfilment of the condition set out in paragraph (a) of this subsection;

or if, in the case of a settlement to which subsection (1) of the said section four hundred and four applies by virtue of subsection (1) of this section, the settlement was entered into in connection with any judicial separation or any agreement between spouses to live separate and apart or with the dissolution or annulment of a marriage.

(5) For the removal of doubts it is hereby declared that sections four hundred and four and four hundred and five of the Income Tax Act, 1952 (which re-enact, without amendment, the provisions of subsections (1) to (4) of section thirty-eight of the Finance Act, 1938), apply and always have applied in relation to any settlement in relation to which the said section thirty-eight would have applied but for its repeal by the said Act of 1952, that is to say, in relation to any settlement, wherever made.

22 Settlements-discretionary power for benefit of settlor, and c,

(1) If and so long as the terms of any settlement (wherever made) are such that any person has or may have power, whether immediately or in the future, and whether with or without the consent of any person—

(a) to pay or apply to or for the benefit of the settlor or the wife or husband of the settlor the whole or any part of the income or property which may at any time arise under or be comprised in the settlement; or

(b) to secure the payment or application to or for the benefit of the settlor or the wife or husband of the settlor of the whole or any part of that income or property;

being a power exercisable at his discretion, any income arising under the settlement in any year of assessment or, as the case may be, any income so arising from the property comprised in the settlement or from a corresponding part of that property, or a corresponding part of any such income, shall (so far as it is not so (treated apart from this section) be treated for all the purposes of the Income Tax Acts as the income of the settlor for that year and not as the income of any other person, subject however to the following provisions of this section.

(2) Where the power mentioned in subsection (1) of this section cannot be exercised within six years from the time when any income or class of income first arises under the settlement or from the time when any particular property first becomes comprised in the settlement, then, so long as the power cannot be exercised, that subsection shall not apply to any income arising under 'the settlement or, as the case may be, any income of that class or income from that property or property representing that property.

(3) Where, under the proviso to subsection (2) of section four hundred and five of the Income Tax Act, 1952, the settlor is not deemed to have an interest in any income arising under or property comprised in the settlement, subsection (1) of this section shall not apply to that income or, as the case may be, to income arising from that property.

(4) Subject to subsection (5) of this section, the foregoing provisions of this section shall apply for all the purposes of income tax for the year 1958-59 and subsequent years of assessment and also for estimating an individual's total income for the purposes of surtax for the year 1957-58.

(5) Where, in the case of any settlement made before the ninth day of July, nineteen hundred and fifty-eight, any income arising under the settlement would, by virtue of the foregoing provisions of this section, fall to be treated (whether for purposes of surtax or for all the purposes of income tax) as the income of the settlor and not as the income of any other person, but would not fall to be so treated apart from those provisions, it shall not be so treated if—

(a) no power by reason of which it would fall to be so treated has been exercised after the eighth day of July, nineteen hundred and fifty-eight, or is or can become exercisable after the fifth day of April, nineteen hundred and fifty-nine, or such later date as the Commissioners of Inland Revenue may in any particular case allow; and

(b) neither the settlor nor the wife or husband of the settlor has received or is entitled to any consideration or benefit in connection with the fulfilment of the condition set out in paragraph (a) of this subsection.

(6) This section shall be deemed to be included in Chapter III of Part XVIII of the Income Tax Act, 1952, and to precede section four hundred and six thereof, and the references in subsection (1) of section four hundred and seven and subsection (2) of section four hundred and eight of that Act to section four hundred and four thereof shall be construed as including references to this section.

23 Time limits

The provisions of the Sixth Schedule to this Act shall have effect for extending the time limits specified in the enactments mentioned in that Schedule.

24 Penalty for incorrect accounts

(1) Where, after the passing of this Act, incorrect accounts are submitted to the surveyor or any Commissioners in connection with the ascertainment of a person's liability to income tax for any year of assessment, that person shall be liable, subject to the following provisions of this section, to be proceeded against as mentioned in paragraph (a) or (b) of subsection (3) of section twenty-five of the Income Tax Act, 1952 (which imposes penalties on persons failing to make certain statements), and the amounts mentioned therein shall be forfeited and recovered accordingly.

(2) Proceedings under the said subsection (3) shall not be taken against the same person both by virtue of this section and apart from this section in respect of the same year of assessment.

(3) Where a person discovers that accounts submitted in connection with the ascertainment of his liability to income tax are incorrect and he submits a statement rectifying -the accounts, no proceedings shall thereafter be taken against him by virtue of this section in respect of the accounts.

(4) In proceedings taken against any person by virtue of this section it shall be a defence to prove that the accounts were submitted without his consent or connivance.

(5) Where accounts for a period not exceeding a year are submitted in connection with the ascertainment of a person's liability to tax for more than one year the penalty recoverable by Virtue of this section shall be recoverable in respect of such one only of those years as the Commissioners of Inland Revenue may elect.

PART IV The Profits Tax

25 Change of rate, and basis of charge

(1) As from the beginning of April, nineteen hundred and fifty-eight, the profits tax shall be charged on the profits arising in any chargeable accounting period from a trade or business to which section nineteen of the Finance Act, 1937, applies at the rate of ten per cent. on the amount of those profits, subject to the provisions for abatement in section thirty-three of the Finance Act, 1947, but without any relief for non-distribution or any distribution charge for chargeable accounting periods ending after the beginning of that month.

(2) Section sixty-nine of the Finance Act, 1948 (under which certain payments between interconnected companies, though not allowable as deductions in computing the profits of the payer, are to be included in computing profits of the recipient), shall not have effect for the purpose of computing profits or losses for any chargeable accounting period ending as aforesaid.

(3) The transitional provisions contained in the Seventh Schedule to this Act shall have effect in relation to the foregoing provisions of this section.

26 Amendments as to special classes of business

(1) The following provisions shall cease to have effect, namely,—

(a) the proviso to sub-paragraph (1) of paragraph 7 of the Fourth Schedule to the Finance Act, 1937 (as set out in section thirty-two of the Finance Act, 1947), and subsection (2) of section twenty-nine of the Finance Act, 1951 (which provide that income received from certain statutory undertakers by way of distribution of profits is not to be included in computing profits of a body corporate having a controlling interest in the undertakers, but is to be included in other cases);

(b) subsection (3) of section forty of the Finance Act, 1947, and section forty of the Finance Act, 1957 (which make special provision as respects certain payments by nationalised undertakings);

(c) section forty-two of the Finance Act, 1947 (which limits the profits tax chargeable in the case of a building society to two per cent. of the profits computed without deduction for interest on money borrowed from members or depositors).

(2) In the case of—

(a) a society registered under the Industrial and Provident Societies Acts, 1893 to 1954, or under the Industrial and Provident Societies Acts (Northern Ireland), 1893 to 1955 ; or

(b) a society regulated by any of the Acts regulating building societies (including Acts of the Parliament of Northern Ireland);

dividends, bonuses and similar distributions to members on their shares in the society shall, in computing for the purposes of the profits tax the profits or losses either of the society or of the recipient, be treated in the same way as interest on moneys borrowed by the society.

(3) Where for any year of assessment a building society enters into arrangements under section four hundred and forty-five of the Income Tax Act, 1952, and by reason thereof income tax is not deducted from dividends or interest of any description, then for the purposes of the profits tax—

(a) in computing profits or losses of the society for any accounting period ending in that year, the deduction to be made for any dividends or interest from which income tax is not deductible by reason of arrangements under the said section shall include an amount computed by reference to the last mentioned dividends and interest in accordance with the provision made by the arrangements with reference to dividends and interest for charging the society to income tax for the said year; and

(b) the amount to be included in the recipient's profits in respect of any dividend or interest from which tax is not deducted as aforesaid shall be the same as if the amount actually paid or credited were the part remaining after deduction of income tax at the standard rate in force for the said year.

(4) This section shall have effect as respects any chargeable accounting period ending after the beginning of April, nineteen hundred and fifty-eight.

27 Time limit for assessments and claims for relief

(1) No assessment to the profits tax shall be made more than six years after the end of the chargeable accounting period in respect of which it is made, except in the following cases—

(a) where any form of fraud or wilful default has been committed in connection with or in relation to the profits tax, and the assessment is made for the purpose of making good to the Crown any loss of tax attributable to the fraud or wilful default;

(b) where tax for the last chargeable accounting period of a trade or business (being a period ending at or before the beginning of April, nineteen hundred and fifty-eight) is chargeable by reason of a distribution made after the end of that period, and the person assessable has not given notice in writing to the Commissioners of Inland Revenue, after the making of the distribution, that no further distribution is to be made, or, if he has, a year has not elapsed since he did so ;

(c) where a longer time is allowed for a particular class of case by the enactments relating to the profits tax other than this subsection.

(2) Any application for relief in respect of an assessment to the profits tax made by virtue of subsection (2) of section thirty-five of the Finance (No. 2) Act, 1945 (which provides for relief in respect of errors or mistakes in a return or statement made for the purpose of an assessment), shall be made not later than six years after the making of the assessment; but any notice of appeal against the determination of the Commissioners on such an application may be given within thirty days of the notification of the determination (instead of twenty-one days as provided by the Fifth Schedule to the said Act).

(3) This section shall not prevent the making of an assessment or application for the purposes of the profits tax at any time when an assessment or application can be made in respect of the same matter for the purposes of income tax under any provision enlarging for a particular class of case the time ordinarily allowed for making assessments or applications for relief.

(4) In this section " assessment" includes an additional assessment.

(5) This section shall not apply to assessments or applications for relief made before the end of the year nineteen hundred and fifty-eight, except in so far as it enlarges the time for giving notice of appeal.

PART V Estate Duty

28 Purchases of interests in expectancy

(1) Where at any time within five years before a death—

(a) there has been in any settled property an interest limited to cease on the death; and

(b) a purchase of another interest in that property expectant on or subject to the interest so limited has been made either by the deceased or out of or by means of any property which would have passed for the purposes of estate duty on his death if he had died immediately before the purchase;

then, subject to the following provisions of this section, there shall be deemed for purposes of estate duty on the death to be included in the property passing on the death (in addition to the other property, if any, so included) a sum of money equal to the amount or value of the consideration given for the purchase of that other interest:

Provided that, subject to subsections (2) and (3) of this section, where the settlement is subsisting at the death, this subsection shall not apply unless the interest purchased passes for purposes of estate duty on the death, and if it does so pass, the persons who are or would be accountable for any duty chargeable on the death in respect of it may (by notice in writing given to the Commissioners of Inland Revenue within twelve months of the death or such longer period as the Commissioners may allow) elect that neither this subsection nor subsection (10) of section seven of the Finance Act, 1894 (which provides that the same property shall not be twice charged or twice aggregated on the same death), shall have effect on the death in relation to that interest.

(2) For the purposes of the proviso to subsection (1) of this section—

(a) where the settlement has come to an end as respects part but not the whole of the settled property, there shall be deemed to have been a separate settlement of that part; and

(b) where at the death there are separate interests in or derived out of the interest purchased, the purchase of that interest shall be treated as having comprised a separate purchase of each of those interests.

(3) Where a purchased interest as respects which an election might otherwise be made under the proviso to subsection (1) of this section has ceased to subsist as a separate interest before the death and before the time when it was originally limited to determine, any other interest into which the interest purchased has been absorbed or enlarged shall be treated for the purposes of this section (including this subsection) as if it had been the subject matter of the purchase:

Provided that where an election under that proviso is made as respects any interest by virtue of this subsection, the value for the purposes of estate duty of that interest shall be limited to the proportion thereof attributable to the purchased interests which that interest is treated under this subsection as representing.

(4) In determining under this section the duty chargeable by reason of the purchase of an interest in settled property, any consideration for the purchase consisting of another interest under the settlement shall be disregarded, unless there has been a prior purchase of that other interest, being a purchase in respect of which duty would be chargeable on the death under this section apart from the proviso to subsection (1) and apart from this subsection : and if there has been such a prior purchase, the consideration for it shall be treated for the purposes of this section (except for the purpose of determining its value) as given not for that purchase but, in place of the said other interest, for the first-mentioned purchase.

(5) Where an interest limited to cease on a death ceases to subsist as a separate interest in consequence of any dealing with another interest expectant on or subject to it or of a dealing with that other interest and a dealing with the interest so limited, then this section shall apply to a purchase of that other interest or any interest expectant on or subject to it, as if the interest so limited had continued to subsist as a separate interest until the time when it was originally limited to determine.

(6) Where the interest referred to in paragraph (a) of subsection (1) of this section is such that on the cesser of that interest the settled property (or, if the interest purchased is an interest in part only of that property, that part of it) is to be treated for purposes of estate duty as passing to a limited extent only, then the consideration for the purchase shall be treated for the purposes of this section as reduced to a corresponding extent.

(7) Any sum deemed to pass on a death by virtue of subsection (1) of this section shall for the purpose of aggregation, or of determining the persons accountable for duty—

(a) where the purchase was made by the deceased, be treated as having been property to which he was absolutely entitled at his death; and

(b) in any other case, be treated as forming part of the property out of or by means of which the purchase was made;

but where the settlement has come to an end before the death as respects all or any of the property in which the interest purchased subsisted, section forty-four of the Finance Act, 1950 (which provides for the trustees of a settlement to be accountable for duty chargeable by virtue of section forty-three of the Finance Act, 1940, by reason of a disposition or determination of a life interest), shall apply as if the duty were chargeable by virtue of the said section forty-three in respect of the property in which the interest purchased subsisted.

(8) Section fifty-seven of the Finance (1909-10) Act, 1910 (which provides that in valuing an estate for duty purposes no allowance shall be made in certain cases for debts or incumbrances incurred or created for the purchase of an interest in expectancy), shall not apply to debts or incumbrances incurred or created for the purpose of or in consideration for a purchase made within the five years before the death of the deceased; and where duty is chargeable by virtue of this section by reason of a purchase of an interest, and the deceased incurred any debt or created any incumbrance wholly or partly as consideration for that purchase, that consideration for the debt or incumbrance shall be left out of account for the purpose of section thirty-one of the Finance Act, 1939 (which excludes or limits the making for purposes of estate duty of an allowance for certain debts incurred or incumbrances created by the deceased for the purchase of property coming ultimately from himself).

(9) Any allowance for a debt or incumbrance, to the extent to which it could not be made apart from subsection (8) of this section, shall, where an election under the proviso to subsection (1) of this section has effect in relation to the purchase in question, be deducted from the value, on which by reason of that purchase duty is chargeable, of the interest chargeable by virtue of the election, and shall not be made otherwise.

(10) In relation to a purchase from a body of persons established for public or charitable purposes only, or from the trustees of a trust so established, references to one year before the death shall be substituted for the references in subsections (1) and (8) of this section to five years before the death.

(11) For the purposes of this section—

(a) any transaction whereby a person for money or money's worth acquires an interest or secures its extinction for his benefit shall be deemed to be a purchase of that interest by him, and any interest extinguished shall be treated as absorbed into the interest benefiting from the extinction;

(b) any consideration for a purchase given otherwise than in cash shall be valued as at the date of the purchase;

(c) any consideration given for the purchase of more than one interest under a settlement, or for the purchase of an interest under a settlement and for something else, shall be apportioned as may be just;

(d) the property in which an interest under a settlement from time to time subsists (or is treated for the purposes of this section as subsisting) shall be treated as the same property, notwithstanding any substitution of one item for another or any accretion thereto.

(12) This section shall not apply where estate duty neither is chargeable on the settled property on the death by reason of the coming to an end of the interest referred to in paragraph (a) of subsection (1), nor would have been if that interest had continued to subsist as a separate interest until the time when it was originally limited to determine, or where the settled property is or, as the case may be, would have been of no principal value, or of too small a principal value for duty to be payable.

(13) This section shall have effect in relation to any purchase made after the fifteenth day of April, nineteen hundred and fifty-eight, and in relation to any such purchase shall have effect notwithstanding that the death occurs before the date of the passing of this Act.

29 Effect of presumptions as to order of deaths

(1) In all cases where, after the fifteenth day of April, nineteen hundred and fifty-eight, two or more persons have died in circumstances rendering it uncertain which of them survived the other or others, the property chargeable with estate duty in respect of each death shall be ascertained as if they had died at the same instant and all relevant property had devolved accordingly.

(2) Property shall not be deemed for purposes of estate duty to pass, or to have passed, on a person's death because on a later or simultaneous death (occurring after the said fifteenth day of April) a testamentary disposition of that property takes effect, under section thirty-three of the Wills Act, 1837, or otherwise, as if that person had survived the testator.

30 Quick successions

(1) Where estate duty becomes payable on any property on a death occurring after the fifteenth day of April, nineteen hundred and fifty-eight, and the Commissioners of Inland Revenue are satisfied—

(a) that estate duty has been payable on the same property on an earlier death occurring within five years before the later death; and

(b) that the person entitled to the property immediately before the later death did not acquire his title by or under a purchase for a consideration in money or money's worth made since the earlier death (whether by him or by another);

then, subject to the provisions of this section, the amount of the estate duty payable on the property on the later death shall be reduced as follows—

• where the earlier death occurred within three months before the later, by seventy-five per cent.;

• where the earlier death occurred within one year before the later, by fifty per cent.;

• where the earlier death occurred within two years before the later, by forty per cent.;

• where the earlier death occurred within three years before the later, by thirty per cent.;

• where the earlier death occurred within four years before the later, by twenty per cent.;

• where the earlier death occurred within five years before the later, by ten per cent.

(2) Where the estate duty payable on a death in respect of any property falls to be reduced under subsection (1) of this section, but is payable on a greater value than the net value of the property after the earlier death, the duty shall not be reduced on an amount in excess of that net value.

(3) Relief under this section shall not be given on any death in respect of the same property by reference to more than one earlier death.

(4) This section shall have effect subject to and in accordance with the Eighth Schedule to this Act.

(5) If the enactments relating to estate duty in force in Northern Ireland make provision corresponding to this section, and include provision for giving relief by reference to duty paid under the law in force in Great Britain, then for the purpose of determining the relief (if any) to be given under this section on any death, account shall be taken of the operation of the said enactments on that or any earlier death in relation to property on which estate duty is not payable under the law of Great Britain, so that the like relief shall be given under this section as if in the case of any such property duty payable and relief allowable under the said enactments were payable or allowable under the law of Great Britain ; and for this purpose any reference in the Eighth Schedule to this Act to any provision of the law of Great Britain shall include a reference to any corresponding provision of the law of Northern Ireland.

31 Works of art, etc. bought at auction for public collections

In section forty-four of the Finance Act, 1921, and in the proviso to subsection (2) of section forty of the Finance Act, 1930 (which provide that estate duty shall not become chargeable on certain sales to national institutions or other bodies or persons of works of art or other property previously exempted), and in any subsequent enactment extending the sales to which those provisions apply, the references to a sale shall not include a sale after the commencement of this Act otherwise than by private treaty.

32 Power to give property in satisfaction of death duty

(1) Where a person has power to sell any property in order to raise money for the payment of any estate duty, he may agree with the Commissioners of Inland Revenue for the property to be accepted in satisfaction of that duty in pursuance of any enactment authorising its acceptance by the Commissioners ; and, except as regards the nature of the consideration, and the receipt and application thereof, any such agreement shall be subject to the same provisions and shall be treated for all purposes as a sale made in the exercise of the said power, and any conveyance or transfer made or purporting to be made to give effect to such an agreement shall have effect accordingly.

(2) The foregoing subsection shall not affect subsection (3) of section thirty of the Finance Act, 1953, as originally enacted or as applied by section thirty-four of the Finance Act, 1956 (which provide that the acceptance of certain works of art or other objects in satisfaction of estate duty is not to be treated as a sale so as to raise a charge of duty under subsection (2) of section forty of the Finance Act, 1930).

(3) This section shall be deemed always to have had effect, and to apply and have applied to any former death duties as it applies to estate duty.

33 Relief in cases of demolition or clearance orders

(1) In the case of deaths occurring after the commencement of this Act, section thirty-three of the Finance Act, 1956 (which reduces the estate duty chargeable on land compulsorily purchased within five years after the date as at which it is valued for the purposes of duty), shall apply in relation to an interest in a house which is demolished in pursuance of a demolition order under Part II of the Housing Act, 1957, or a clearance order under Part III of that Act, as if—

(a) the house had been purchased at site value in pursuance of a compulsory purchase order made by virtue of the said Part II or the said Part III, and compensation in respect of the interest had been payable accordingly; and

(b) the purchase had been made in pursuance of a notice to treat served on the date on which the clearance order or demolition order was made.

(2) Subsection (1) of this section shall apply where a house which might have been the subject of a demolition order is, without the making of such an order, vacated and demolished in pursuance of an undertaking given to the local authority, as if there had been a demolition order made at the date when the undertaking is given.

(3) In this section—

• " house " includes any building constructed or adapted wholly or partly as, or for the purposes of, a dwelling;

• " site value " in relation to a house means the value, at the time the valuation is made, of the site as a cleared site available for development in accordance with the requirements of the building bye-laws for the time being in force in the district.

(4) This section shall have effect in relation to a house in Scotland as if for the references to the Housing Act, 1957, there were substituted references to the Housing (Scotland) Act, 1950, and for the reference to the building bye-laws there were substituted a reference to the building regulations.

PART VI Stamp Duties

34 Conveyances on sale, etc.

(1) Subject to the following provisions of this section, any stamp duty chargeable under the heading " Conveyance or Transfer on sale " in the First Schedule to the Stamp Act, 1891, shall be charged at the following rates for every fifty pounds or fractional part of fifty pounds (in amount or value) of the consideration for the sale, that is to say:—

Where the consideration is £3,500 or under, and the instrument is certified at £3,500	Nil.
Where the consideration is £4,500 or under, and the instrument is certified at £4,500	5s.
Where the consideration is £5,250 or under, and the instrument is certified at £5,250	10s.
Where the consideration is £6,000 or under, and the instrument is certified at £6,000	15s.
In any other case	20s.

(2) Where the amount or value of the consideration is less than three hundred pounds, but the instrument is not certified at three thousand five hundred pounds, the duty instead of being charged at the rates stated in subsection (1) above for every fifty pounds or fractional part of fifty pounds of the consideration shall be charged at rates equal to half the amounts so stated for every twenty-five pounds or fractional part of twenty-five pounds of the consideration or, if the consideration is less than twenty-five pounds, at rates equal to one tenth of the amounts so stated for every five pounds or fractional part of five pounds of the consideration.

(3) Any duty chargeable by reference to the said heading " Conveyance or Transfer on sale " shall be charged accordingly, except as provided by subsection (5) of this section.

(4) References in this section to an instrument being certified at a particular amount mean that it contains a statement certifying that the transaction effected by the instrument does not form part of a larger transaction or series of transactions in respect of which the amount or value, or aggregate amount or value, of the consideration exceeds that amount; and for this purpose—

(a) any sale or contract or agreement for the sale of goods, wares or merchandise shall be disregarded in the case either—

(i) of an instrument chargeable under the said heading " Conveyance or Transfer on sale ", other than an actual conveyance or transfer of the goods, wares or merchandise (with or without other property); or

(ii) of an instrument chargeable by reference to that heading under section fifty-nine of the Stamp Act, 1891 (which makes a contract or agreement for sale of certain property chargeable with duty as if it were an actual conveyance on sale); and

(b) any such statement as aforesaid shall be construed as leaving out of account any matter which in accordance with paragraph (a) of this subsection is to be disregarded.

(5) In relation—

(a) to duty chargeable by reference to the said heading " Conveyance or Transfer on sale " by virtue of the heading " Lease or Tack " in the same Schedule, in a case where part of the consideration consists of rent, and that rent exceeds the sum of fifty pounds a year; or

(b) to duty chargeable under or by reference to the said heading " Conveyance or Transfer on sale" as it applies to a conveyance or transfer of stock or marketable securities;

so much of the foregoing subsections as relates to instruments certified at six thousand pounds or at a lower figure shall not apply, and subject to subsection (6) of this section the rate of duty shall be determined according to the rates given by subsections (1) and (2) for instruments not so certified:

Provided that in the case of duty on a conveyance or transfer on sale of new local authority stock within the meaning of subsection (2) of section thirty-one of the Finance Act, 1953, or of duty chargeable by reference to the amount of the duty on such a conveyance or transfer, the rate of duty shall be one half the rate determined as aforesaid.

(6) Where a conveyance, transfer or letting is made or agreed to be made to a body of persons established for charitable purposes only or to the trustees of a trust so established, any duty chargeable under or by reference to the said heading " Conveyance or Transfer on sale " shall be chargeable at the rate of ten shillings for every fifty pounds or fractional part of fifty pounds (or the corresponding rate under subsection (2) of this section) where apart from this subsection it would be chargeable at any higher rate:

Provided that no instrument not stamped with the duty to which it would apart from this subsection be liable shall be deemed by virtue of this subsection to be duly stamped unless it has in accordance with the provisions of section twelve of the Stamp Act, 1891, been stamped with a particular stamp denoting that it is duly stamped.

(7) Nothing in this section shall affect any enactment imposing an upper limit on the amount of duty chargeable ad valorem.

(8) In exemption (11) in the heading " Receipt" in the same Schedule (which exempts certain receipts endorsed or otherwise written upon or contained in an instrument liable to stamp duty and duly stamped), the reference to an instrument liable to stamp duty and duly stamped shall be taken to extend to any instrument wholly relieved of duty by the provisions of this section relating to instruments-certified at three thousand five hundred pounds.

(9) The foregoing subsections shall have effect as from the beginning of August, nineteen hundred and fifty-eight.

(10) In relation to duty chargeable by reference to the said heading " Conveyance or Transfer on sale " by virtue of the said heading " Lease or Tack", section thirty-seven of the Finance Act, 1956 (which among other things excluded in certain cases the increase in duty so chargeable provided for by section seventy-three of the Finance (1909-10) Act, 1910), shall be deemed to have had effect as if the reference to section seventy-three had included a reference to section seventy-five of the said Act of 1910 (which had the same effect as section seventy-three in doubling the duty so chargeable).

35 Miscellaneous amendments

(1) In the First Schedule to the Stamp Act, 1891—

(a) neither the heading " Bond, Covenant or Instrument of any kind whatsoever" nor the heading " Mortgage, Bond, Debenture, Covenant" shall extend to any instrument in respect of a covenant or agreement by any person, whether as principal or as surety—

(i) to pay, or to guarantee the payment of, sums payable for or in relation to the sale or hire of any goods, wares or merchandise, the sale, hire, construction or installation of any machinery or plant, the supply of electricity, or the execution of any building works or any works of civil engineering ; or

(ii) to reimburse or guarantee the reimbursement of advances made for or in respect of the payment of sums payable as aforesaid ;

and the heading " Agreement or any Memorandum of an Agreement" and the heading " Deed of any kind whatsoever, not described in this schedule " shall be construed accordingly; and

(b) in the said heading " Agreement or any Memorandum of an Agreement" exemption (3) (which comprises any agreement, letter or memorandum made for or relating to the sale of any goods, wares or merchandise) shall not apply where the consideration for the sale includes sums payable at stated periods.

This subsection shall not be taken as affecting the duty chargeable on an instrument under the said heading " Mortgage, Bond, Debenture, Covenant" in respect of any security by way of charge on property or in respect of an agreement to give such a security.

(2) Any discharge (by re-conveyance, surrender or otherwise) of a security given for an advance made by a local authority under any of the enactments mentioned below in this subsection shall be exempt from stamp duty.

The enactments in question are—

(a) as regards England and Wales, section one of the Small Dwellings Acquisition Act, 1899, section ninety-one and section ninety-two of the Housing Act, 1925, section ninety and section ninety-one of the Housing Act, 1936, section four of the Housing Act, 1949, and section forty-three of the Housing (Financial Provisions) Act, 1958 ; and

(b) as regards Scotland, section one of the Small Dwellings Acquisition Act, 1899, section seventy-four and section seventy-five of the Housing (Scotland) Act, 1925, section twenty-nine of the Housing (Scotland) Act, 1949, and section seventy-five of the Housing (Scotland) Act, 1950.

(2) Any discharge (by re-conveyance, surrender or otherwise) of a security for sums payable to a local authority in respect of the sale or letting of houses by that authority under any of the enactments mentioned below in this subsection shall be exempt from stamp duty.

The enactments in question are—

(a) as regards England and Wales, paragraph (d) of sub-section (1) of section fifty-nine of the Housing Act, 1925, paragraph (d) of subsection (1) of section seventy-nine of the Housing Act, 1936, and subsection (1) of section one hundred and four of the Housing Act, 1957; and

(b) as regards Scotland, paragraph (d) of subsection (1) of section forty-five of the Housing (Scotland) Act, 1925, and paragraph (d) of subsection (1) of section sixty-five of the Housing (Scotland) Act, 1950.

(4) In section seventy-four of the Finance Act, 1952 (which relieves from stamp duty certain transfers of water undertakings and other property to joint boards or joint committees of local authorities, and certain conveyances and agreements for such transfers)—

(a) in paragraph (a) of subsection (1) (which relates to transfers of water undertakings by order under the Water Act, 1945) after the words " by an order under the Water Act, 1945" there shall be inserted the words " or by or under any local Act of Parliament ", and for the words " to a joint board or joint committee consisting exclusively of representatives of local authorities" there shall be substituted the words " to any other water undertakers ";

(b) both in paragraph (b) of subsection (1) and in subsection (3) (which relate to transfers of property under the Public Health Act, 1936, or the Local Government (Scotland) Act, 1947, and to conveyances and agreements for such transfers under the said Act of 1947) for the words " from a local authority which is represented on the board or committee" there shall be substituted the words " from any local authority or from another such board or committee "; and

(c) in subsection (2) (which relates to contracts and agreements for transfers of water undertakings which are conditional on orders under the Water Act, 1945) after the words " an order under the Water Act, 1945 " there shall be inserted the words " or under any local Act of Parliament or on the passing of such an Act ".

(5) No stamp duty shall be chargeable under or by reference to the heading " Conveyance or Transfer on sale" in the First Schedule to the Stamp Act, 1891, on any agreement made under section fourteen of the New Towns Act, 1946, by a development corporation under that Act for the transfer of the whole or part of the water undertaking or sewerage undertaking of that corporation, or on any conveyance, agreement or assignment made, or instrument executed, solely for the purpose of giving effect to such a transfer.

(6) This section shall have effect as from the beginning of August, nineteen hundred and fifty-eight.

PART VII Miscellaneous

36 Exchequer advances to nationalised industries and undertakings

In subsection (3) of section forty-two of the Finance Act, 1956 (which, as amended by the Nationalised Industries Loans Act, 1958, limits to seven hundred million pounds the total of the advances which may be made under that section and prohibits the making of such advances after the end of August, nineteen hundred and fifty-eight), there shall be substituted, for the words " seven hundred " the words " one thousand and seventy " and for the words " nineteen hundred and fifty-eight " the words " nineteen hundred and fifty-nine ".

37 Pensions under Overseas Service Act, 1958 (income tax and estate duty)

(1) So much of any pension paid to or in respect of any person—

(a) under an order made under section two of the Overseas Service Act, 1958, or under a pension scheme provided and maintained under such an order; or

(b) under subsection (2) of section four of that Act;

as may be certified by the Secretary of State to be attributable to the employment of that person in the public services of an overseas territory shall not be liable to charge to income tax if it is the income of a person who satisfies the Commissioners of Inland Revenue that he is not resident in the United Kingdom.

(2) Subsections (3) and (4) of section one hundred and ninety of the Income Tax Act, 1952 (which confer a right of appeal on questions of residence under that section), shall apply to any decision of the Commissioners of Inland Revenue on any question as to residence arising under subsection (1) of this section as they apply to such decisions under that section.

(3) For the purposes of the enactments relating to estate duty so much of any pension paid as mentioned in subsection (1) of this section as is certified by the Secretary of State to be attributable to service under the Government of an overseas territory shall be treated as if it had been paid by the Government of that territory.

(4) In this section—

• " pension " includes a gratuity or any sum payable on or in respect of death, and a return of contributions with or without interest thereon or any addition thereto;

• " overseas territory " means any territory or country outside the United Kingdom;

and references in this section to employment in the public services of an overseas territory and to the Government of an overseas territory shall be construed as if they occurred in the Overseas Service Act, 1958, and subsections (2) and (3) of section seven of that Act (which relate to the construction of such references) shall apply accordingly.

38 Annuities under Tithe Acts, 1936 and 1951

(1) The following provisions shall have effect with respect to annuities within the meaning of the Tithe Acts, 1936 and 1951.

(2) For the year beginning with the second day of October, nineteen hundred and fifty-eight, and subsequent years, instead of annuities being payable by half-yearly instalments on the first day of April and the first day of October, they shall be payable in one yearly sum on the first day of October; and accordingly—

(a) in the Tithe Acts, 1936 and 1951, and in any other enactment relating to those annuities the expression " payment date " shall mean the first day of October, and references to an instalment of an annuity shall be construed as referring to the yearly sum payable on that day; and

(b) in subsection (1) of section fourteen of the Tithe Act, 1936 (which makes provision for remitting from each instalment of an annuity charged on agricultural land one half of any excess of the annuity over one third of the annual value of the land), the words " one half of " shall be omitted.

(3) In paragraph (a) of subsection (1) of section eleven of the Tithe Act, 1936 (which provides for the compulsory redemption in certain circumstances of an annuity of one pound or less, or two or more annuities amounting in the aggregate to one pound or less), for the references to one pound there shall be substituted references to three pounds or such higher amount as may from time to time be specified in rules made by the Treasury under section fifteen of that Act.

39 Winding up of Treasury Chest Fund

The amount of the available balance of the Treasury Chest Fund as at the end of March, nineteen hundred and fifty-eight, shall be paid into the Exchequer, and no further payments shall be made into or out of that Fund or any Treasury chest.

40 Short title, construction, extent and repeal

(1) This Act may be cited as the Finance Act, 1958.

(2) Parts I to VI of this Act shall be construed as one with the enactments mentioned in this subsection respectively, that is to say—

(a) Part I with Part V of the Finance (No. 2) Act, 1940;

(b) Part II with the Customs and Excise Act. 1952;

(c) Part III with the Income Tax Acts ;

(d) Part IV with Part III of the Finance Act, 1937, and the other enactments relating to the profits tax;

(e) Part V with Part I of the Finance Act, 1894;

(f) Part VI with the Stamp Act, 1891.

(3) Any reference in this Act to any other enactment shall, except so far as the context otherwise requires, be construed as a reference to that enactment as amended or applied by or under any other enactment, including this Act.

(4) Such of the provisions of this Act as relate to matters in respect of which the Parliament of Northern Ireland has power to make laws shall not extend to Northern Ireland.

(5) The enactments specified in the Ninth Schedule to this Act are hereby repealed to the extent mentioned in the third column of that Schedule :

Provided that the repeals effected by any Part of that Schedule shall have effect from the dates and subject to the savings (if any) provided for in that Part.