Finance Act 1998 (c. 36) (c. 36)

(The document as of February, 2008)

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Claims for designation

2 (1) In section 30 of the 1984 Act (conditionally exempt transfers), after subsection (3B) there shall be inserted the following subsection--

" (3BA) A claim under subsection (1) above must be made no more than two years after the date of the transfer of value to which it relates or, in the case of a claim with respect to a potentially exempt transfer, the date of the death, or (in either case) within such longer period as the Board may allow. "

(2) This paragraph has effect in relation to any transfer of value or death on or after 17th March 1998.

3 (1) In section 78 of the 1984 Act (conditionally exempt occasions), after subsection (1) there shall be inserted the following subsection--

" (1A) A claim under subsection (1) above must be made no more than two years after the date of the transfer or other event in question or within such longer period as the Board may allow. "

(2) This paragraph has effect in relation to transfers of property made, and other events occurring, on or after 17th March 1998.

Property capable of designation

4 (1) In section 31 of the 1984 Act, in subsection (1) (property capable of designation under that section), for paragraph (a) there shall be substituted the following paragraphs--

" (a) any relevant object which appears to the Board to be pre-eminent for its national, scientific, historic or artistic interest;

(aa) any collection or group of relevant objects which, taken as a whole, appears to the Board to be pre-eminent for its national, scientific, historic or artistic interest; " .

(2) In subsections (2) and (3) of that section, for "(1)(a)", wherever occurring, there shall be substituted "(1)(a) or (aa)".

(3) For subsection (5) of that section, there shall be substituted the following subsection--

" (5) In this section--

"national interest" includes interest within any part of the United Kingdom; and
"relevant object" means--
(a)
a picture, print, book, manuscript, work of art or scientific object, or
(b)
anything not falling within paragraph (a) above that does not yield income;

and in determining under subsection (1)(a) or (aa) above whether an object or a collection or group of objects is pre-eminent, regard shall be had to any significant association of the object, collection or group with a particular place. "

(4) This paragraph has effect in relation to the making of any designation on a claim made on or after the day on which this Act is passed.

Access to designated property

5 (1) In section 31 of the 1984 Act (designation of property and requisite undertakings), after subsection (4F) there shall be inserted the following subsection--

" (4FA) For the purposes of this section, the steps agreed for securing reasonable access to the public must ensure that the access that is secured is not confined to access only where a prior appointment has been made. "

(2) This paragraph has effect in relation to the giving of any undertaking on or after the day on which this Act is passed.

Publication of information about designated property

6 (1) In section 31 of the 1984 Act (designation of property and requisite undertakings), after the subsection (4FA) of that section inserted by paragraph 5 above there shall be inserted the following subsection--

" (4FB) Subject to subsection (3) above, where the steps that may be set out in any undertaking include steps for securing reasonable access to the public to any property, the steps that may be agreed and set out in that undertaking may also include steps involving the publication of--

(a) the terms of any undertaking given or to be given for any of the purposes of this Act with respect to the property; or

(b) any other information relating to the property which (apart from this subsection) would fall to be treated as confidential;

and references in this Act to an undertaking for access to any property shall be construed as including references to so much of any undertaking as provides for the taking of steps involving any such publication. "

(2) This paragraph has effect in relation to the giving of any undertaking on or after the day on which this Act is passed.

Undertakings on death, disposal of property, etc.

7 (1) In section 32 of the 1984 Act (chargeable events in relation to conditionally exempt transfers), in subsection (2), for "subsection (5)(b)" there shall be substituted "subsection (5AA)".

(2) In subsection (5) of that section, for paragraph (b) there shall be substituted the following paragraph--

" (b) the condition specified in subsection (5AA) below is satisfied with respect to the property. "

(3) After that subsection there shall be inserted the following subsection--

" (5AA) The condition referred to in subsection (5)(b) above is satisfied if--

(a) the requisite undertaking described in section 31 above is given with respect to the property by such person as the Board think appropriate in the circumstances of the case, or

(b) (where the property is an area of land within section 31(1)(d) above) the requisite undertakings described in that section are given with respect to the property by such person or persons as the Board think appropriate in the circumstances of the case. "

(4) In section 32A of the 1984 Act (chargeable events in relation to associated properties), in subsection (6), for the words from "unless" to "case; and" there shall be substituted-- " unless--

(a) the requisite undertaking described in section 31 above is given with respect to the property (or part) not disposed of by such person as the Board think appropriate in the circumstances of the case, or

(b) (where any of the property or part not disposed of is an area of land within section 31(1)(d) above) the requisite undertakings described in that section are given with respect to that property (or that part) by such person or persons as the Board think appropriate in the circumstances of the case;

and " .

(5) In subsection (8) of that section, for paragraph (b) there shall be substituted the following paragraph--

" (b) the condition specified in subsection (8A) below is satisfied with respect to the property (or part) concerned. "

(6) After that subsection there shall be inserted the following subsection--

" (8A) The condition referred to in subsection (8)(b) above is satisfied if--

(a) the requisite undertaking described in section 31 above is given with respect to the property (or part) by such person as the Board think appropriate in the circumstances of the case, or

(b) (where any of the property or part is an area of land within section 31(1)(d) above) the requisite undertakings described in that section are given with respect to the property (or part) by such person or persons as the Board think appropriate in the circumstances of the case. "

(7) For subsection (9) of that section there shall be substituted the following subsection--

" (9) If the whole or part of any property is disposed of by sale and--

(a) the requisite undertaking described in section 31 above is given with respect to the property (or part) by such person as the Board think appropriate in the circumstances of the case, or

the disposal is a chargeable event only with respect to the whole or part actually disposed of (if it is a chargeable event with respect to such whole or part apart from this subsection). "

(8) In Schedule 5 to the 1984 Act, for paragraph 5 (undertaking capable of preventing disposal from being chargeable in cases where death occurred before 7th April 1976) there shall be substituted the following paragraph--

" 5 (1) The further undertaking referred to in paragraph 1 above is the requisite undertaking described in section 31(2) of this Act given with respect to the object in question by such person as the Board think appropriate in the circumstances of the case.

(2) Subsection (3) of section 31 of this Act shall apply in relation to documents which are designated as objects to which section 31 of the [1975 c. 7.] Finance Act 1975 applies as that subsection applies in relation to documents designated under section 31(1)(a) of this Act.

(3) The further undertaking referred to in paragraph 3 above is--

(a) the requisite undertaking described in subsection (4) of section 31 of this Act given with respect to the property in question by such person as the Board think appropriate in the circumstances of the case, or

(b) (where applicable) the requisite undertakings described in subsections (4) and (4A) of that section given with respect to the property in question by such person or persons as the Board think appropriate in the circumstances of the case. "

(9) This paragraph has effect in relation to the giving of any undertaking on or after the day on which this Act is passed.

Variation of undertakings

8 (1) After section 35 of the 1984 Act there shall be inserted the following section--

" 35A Variation of undertakings.

(1) An undertaking given under section 30, 32 or 32A above or paragraph 5 of Schedule 5 to this Act may be varied from time to time by agreement between the Board and the person bound by the undertaking.

(2) Where a Special Commissioner is satisfied that--

(a) the Board have made a proposal for the variation of such an undertaking to the person bound by the undertaking,

(b) that person has failed to agree to the proposed variation within six months after the date on which the proposal was made, and

the Commissioner may direct that the undertaking is to have effect from a date specified by him as if the proposed variation had been agreed to by the person bound by the undertaking.

(3) The date specified by the Special Commissioner must not be less than sixty days after the date of his direction.

(4) A direction under this section shall not take effect if, before the date specified by the Special Commissioner, a variation different from that to which the direction relates is agreed between the Board and the person bound by the undertaking. "

(2) After section 79 of the 1984 Act there shall be inserted the following section--

" 79A Variation of undertakings.

(1) An undertaking given under section 78 or 79 above may be varied from time to time by agreement between the Board and the person bound by the undertaking.

(2) Where a Special Commissioner is satisfied that--

(a) the Board have made a proposal for the variation of such an undertaking to the person bound by the undertaking,

(b) that person has failed to agree to the proposed variation within six months after the date on which the proposal was made, and

the Commissioner may direct that the undertaking is to have effect from a date specified by him as if the proposed variation had been agreed to by the person bound by the undertaking.

(3) The date specified by the Special Commissioner must not be less than sixty days after the date of his direction.

(3) In Schedule 4 to the 1984 Act (maintenance funds for historic buildings), in paragraph 3, after sub-paragraph (3) there shall be inserted the following sub-paragraph--

" (3A) Section 35A of this Act shall apply in relation to an undertaking given under sub-paragraph (3) above as it applies in relation to an undertaking given under section 30 of this Act. "

(4) Subject to paragraph 10 below, this paragraph has effect in relation to undertakings given on or after the day on which this Act is passed.

9 (1) In section 258 of the [1992 c. 12.] Taxation of Chargeable Gains Act 1992 (disposal of works of art), after subsection (8) there shall be inserted the following subsection--

" (8A) Section 35A of the 1984 Act (variation of undertakings) shall have effect in relation to an undertaking given under this section as it has effect in relation to an undertaking given under section 30 of that Act. "

(2) Subject to paragraph 10 below, this paragraph has effect in relation to undertakings given on or after the day on which this Act is passed.

10 (1) Section 35A of the 1984 Act applies in relation to a relevant undertaking given with respect to any property before the day on which this Act is passed except in a case where there has been a chargeable event with respect to that property at any time after the giving of the undertaking but before that day.

(2) In its application to such a relevant undertaking, section 35A of the 1984 Act applies with the modifications set out in sub-paragraphs (3) and (4) below.

(3) The first modification is the substitution, for paragraph (a) of subsection (2), of the following paragraph--

" (a) the Board have made a proposal to the person bound by such an undertaking for the undertaking to be varied so as to include (where it does not already do so) an extended access requirement or a publication requirement (or both those requirements), " .

(4) The second modification is the insertion, after subsection (4), of the following subsections--

" (5) For the purposes of subsection (2)(a) above--

(a) an extended access requirement is a requirement for the taking of steps ensuring that the access to the public that is secured is not confined to access only where a prior appointment has been made; and

(b) a publication requirement is a requirement for the taking of steps involving the publication of any matter mentioned in paragraph (a) or (b) of section 31(4FB) above.

(6) In determining for the purposes of subsection (2)(a) above whether an undertaking already includes an extended access requirement, there shall be disregarded so much of the undertaking as includes provision for the property with respect to which the undertaking was given to be made available temporarily for the purposes of special exhibitions. "

(5) In this paragraph "relevant undertaking" means any of the following--

(a) an undertaking given under section 30, 32, 32A, 78 or 79 of the 1984 Act;

(b) an undertaking given under paragraph 3(3) of Schedule 4 to the 1984 Act or paragraph 5(2) of Schedule 5 to that Act;

(d) an undertaking given under section 34(2) of the [1975 c. 7.] Finance Act 1975;

(e) an undertaking given under section 258 of the [1992 c. 12.] Taxation of Chargeable Gains Act 1992.

(6) In this paragraph "chargeable event", in relation to any property means--

(a) an event which under section 32 or 32A of the 1984 Act is a chargeable event with respect to that property; or

(b) an event which under either of those sections would be such an event if (where it is not the case) the undertaking in question had been given under section 30 of that Act.

Section 160.

SCHEDULE 26 National loans

Amendment of National Loans Act 1968 (c. 13)

1 (1) The National Loans Act 1968 shall be amended as follows.

(2) After section 20 there shall be inserted--

" The Debt Management Account

20A The Debt Management Account.

Schedule 5A to this Act (the Debt Management Account) shall have effect. "

(3) After Schedule 5 there shall be inserted--

" SCHEDULE 5A The debt management account

The account

1 (1) The Treasury shall establish an account to be known as the Debt Management Account.

(2) The Treasury shall operate the Debt Management Account with the objects of--

(a) securing over time that sums are available to meet any daily shortfalls in the National Loans Fund and that any daily surpluses in that Fund are used to the best advantage;

(b) facilitating the raising of money under section 12 of this Act;

(c) promoting the liquidity, stability and efficiency of the market in securities issued under section 12 of this Act and the market in Treasury bills issued under the [1877 c. 2.] Treasury Bills Act 1877;

(d) providing a facility by which public bodies may exercise their powers to acquire and transfer such securities and bills;

(e) securing the general management of debt so far as it takes the form of such securities and bills.

General powers

2 (1) For the purposes of exercising their functions with regard to the Debt Management Account the Treasury may--

(a) exercise the powers conferred by the following provisions of this Schedule;

(b) generally manage the Account in the way the Treasury consider the most efficient.

(2) Any sums held by the Treasury for the purposes of the Debt Management Account may be held in sterling or in any other currency or medium of exchange, whether national or international; and sums may be changed into any currency or medium.

(3) The Treasury may exercise any power with regard to the Debt Management Account with a view to promoting one or more of the objects mentioned in paragraph 1(2) above, and it is immaterial if a particular object is not promoted or is not promoted as fully as it might be.

Financial instruments

3 (1) For the purposes of exercising their functions with regard to the Debt Management Account the Treasury may--

(a) acquire (and arrange to acquire) and hold securities issued under section 12 of this Act, Treasury bills issued under the [1877 c. 2.] Treasury Bills Act 1877, and other financial instruments (by whatever person issued);

(b) transfer (and arrange to transfer) such securities, bills and other instruments.

(2) Acquisitions under sub-paragraph (1)(a) above may be made on issue or otherwise.

(3) Acquisitions, transfers and arrangements under sub-paragraph (1)(a) and (b) above may be made on such terms as the Treasury think fit.

Borrowing

4 (1) If the Treasury consider it expedient to raise money for the purpose of exercising their functions with regard to the Debt Management Account they may raise it in such manner and on such terms as they think fit, and money so raised shall be paid into the Account.

(2) For the purpose of raising money under this paragraph the Treasury may--

(a) create and issue such securities as they think fit;

(b) create and issue them at such rates of interest and subject to such conditions as to repayment, redemption and other matters as they think fit.

(3) The power to raise money under this paragraph extends to raising money either within or outside the United Kingdom and either in sterling or in any other currency or medium of exchange, whether national or international.

(4) The power to raise money under this paragraph extends to raising money by the issue of Treasury bills under the [1877 c. 2.] Treasury Bills Act 1877.

(5) The following shall be charged on and paid out of the Debt Management Account with recourse to the National Loans Fund and then to the Consolidated Fund--

(a) the principal of and interest on any money borrowed under this paragraph (whether by the issue of securities or otherwise);

(b) any other sums to be paid by the Treasury in accordance with the terms on which they borrow under this paragraph.

(6) Section 5 of the [1877 c. 2.] Treasury Bills Act 1877 (principal of and interest on Treasury bills) shall not apply in the case of Treasury bills issued by virtue of this paragraph.

(7) Any expenses incurred in connection with the raising of money under this paragraph (including expenses in connection with the issue, repayment or redemption of securities or Treasury bills) shall be charged on and paid out of the National Loans Fund with recourse to the Consolidated Fund.

5 Section 14 of this Act shall have effect for the purposes of paragraph 4 above as if--

(a) the references in subsections (1) and (2) to section 12 were references to paragraph 4;

(b) the references in subsections (8) and (9) to the National Loans Fund were references to the Debt Management Account.

Lending

6 (1) The Treasury may--

(a) lend sums from the Debt Management Account for the purpose of exercising their functions with regard to the Account;

(b) lend from the Debt Management Account sums not immediately needed for any other purpose.

(2) The power to lend under this paragraph includes power to lend to the National Loans Fund; and sums lent to the Fund and for the time being outstanding shall be a liability of the Fund to the Debt Management Account.

(3) Loans under this paragraph may be made at such times and on such terms as the Treasury think fit.

Borrowing and lending: general

7 The powers under paragraphs 4 to 6 above may be exercised by means (or partly by means) of automatic devices programmed to respond to events as they arise.

Cap on borrowing

8 (1) The Treasury shall secure that the position at the end of any given day is such that the total of relevant debts does not exceed the total of relevant deposits.

(2) A relevant debt is the principal outstanding of any money raised under paragraphs 4 and 5, but excluding money raised from the National Loans Fund.

(3) A relevant deposit is the principal outstanding of any sum standing to the credit of the Debt Management Account in the National Loans Fund or at the Bank of England.

(4) For the purposes of this paragraph a debt or deposit not designated in sterling must be expressed in sterling, and the exchange rate or rates used to calculate the sterling equivalent of debts and deposits must be such as the Treasury consider prudent.

National Loans Fund

9 (1) If securities issued under section 12 of this Act or Treasury bills are acquired on issue under paragraph 3(1)(a) above the Treasury shall pay from the Debt Management Account into the National Loans Fund a sum of such amount as the Treasury may determine to be appropriate.

(2) A payment under this paragraph--

(a) may be made before, at or after issue;

(b) may be made in instalments, any of which may be paid before, at or after issue.

10 (1) The Treasury may lend to the Debt Management Account from the National Loans Fund such sums as they think fit, at such times and on such terms as they think fit; and section 5 of this Act shall not apply in the case of such a loan.

(2) The Treasury may repay from the Debt Management Account to the National Loans Fund sums lent under this paragraph.

(3) Sums lent under this paragraph and for the time being outstanding shall be a liability of the Debt Management Account to the National Loans Fund.

11 (1) Any excess for the time being of the liabilities of the Debt Management Account over its assets shall be a liability of the National Loans Fund to the Account.

(2) Any excess for the time being of the assets of the Debt Management Account over its liabilities shall be a liability of the Account to the National Loans Fund.

(3) The Treasury may pay from the Debt Management Account to the National Loans Fund an amount representing all or any of any excess mentioned in subparagraph (2) above, and if they do the liability there mentioned shall be extinguished or reduced accordingly.

12 The Treasury shall exercise their powers under paragraphs 10 and 11 above so as to secure that the external liabilities of the Debt Management Account at any given time can be met; and the external liabilities of the Account are its liabilities other than those in favour of the National Loans Fund.

Interest

13 (1) The Treasury shall from time to time pay out of the National Loans Fund into the Debt Management Account sums (if any) which the Treasury consider appropriate to compensate the Account in respect of payments of interest made from the Account.

(2) Payments to be made out of the National Loans Fund under sub-paragraph (1) above shall be treated for the purposes of section 15 of this Act as charges on that Fund for the service of national debt.

(3) The Treasury may from time to time pay out of the Debt Management Account into the National Loans Fund sums (if any) which the Treasury consider appropriate in respect of interest received or earned by the Account.

Redemption

14 (1) Any securities issued by or on behalf of the Treasury and for the time being held by the Treasury for the purposes of the Debt Management Account may be redeemed by the Treasury before maturity at market prices determined in such manner as the Treasury think fit.

(2) Any expenses incurred by the Treasury in connection with the redemption of securities under this paragraph shall be paid out of the National Loans Fund.

Accounts

15 (1) For each financial year in which the Debt Management Account operates the Treasury shall prepare in such form as they may prescribe an account relating to the transactions, assets and liabilities of the Account.

(2) The Treasury shall send the account to the Comptroller and Auditor General not later than the end of November following the end of the financial year to which it relates.

(3) The Comptroller and Auditor General shall examine, certify and report on the account and lay a copy of it, together with his report, before each House of Parliament. "

Amendment of Finance Act 1993 (c. 34)

2 Section 211 of the Finance Act 1993 (National Debt Commissioners: securities) shall cease to have effect.

Commencement

3 (1) The amendments made by this Schedule shall have effect in accordance with provision made by the Treasury by an order (or orders) made by statutory instrument.

(2) Different provision may be made--

(a) for different amendments;

(b) for different purposes of the same amendment.

(3) In particular, provision may be made for the Debt Management Account to begin operating at different times with regard to different objects (as set out in paragraph 1(2) of Schedule 5A to the [1968 c. 13.] National Loans Act 1968).

(4) Any order may include such supplementary, incidental, consequential, transitional or saving provisions as appear to the Treasury to be necessary or expedient.

(5) In particular, any order may--

(a) provide that any liability of the National Debt Commissioners to the National Loans Fund arising for the purposes of accountancy practice by virtue of section 211 of the [1993 c. 34.] Finance Act 1993 shall be treated as discharged in circumstances prescribed by the order;

(b) confer power to acquire, hold or transfer securities issued under section 12 of the [1968 c. 13.] National Loans Act 1968 or Treasury bills issued under the [1877 c. 2.] Treasury Bills Act 1877;

(c) impose on the National Debt Commissioners a duty to transfer securities issued under section 12 of the [1968 c. 13.] National Loans Act 1968 at such price as the Treasury may determine;

(d) confer power to advance sums from the National Loans Fund.

SCHEDULE 27 Repeals

Part I Excise duties

(1) Drawback of duty on beer

Chapter	Short title	Extent of repeal
1979 c. 4.	The Alcoholic Liquor Duties Act 1979.	Section 42.
1991 c. 31.	The Finance Act 1991.	In Schedule 2, paragraph 9.
1993 c. 34.	The Finance Act 1993.	In section 4(2), paragraphs (c) and (d).

These repeals have effect in accordance with section 5(2) of this Act.

(2) Hydrocarbon oil duty

Chapter	Short title	Extent of repeal
1979 c. 5.	The Hydrocarbon Oil Duties Act 1979.	In section 6(1)(b), the words from "and delivered" to "above".

This repeal has effect in accordance with section 6(3) of this Act.

(3) Vehicle excise duty: rates where pollution reduced

Chapter	Short title	Extent of repeal
1994 c. 22.	The Vehicle Excise and Registration Act 1994.	In Schedule 1, paragraphs 6(3A), 7(4), (5) and (6), 9(5) and 11(5).
1995 c. 4.	The Finance Act 1995.	In Schedule 4, paragraph 12.

These repeals have effect in accordance with paragraph 17(1) of Schedule 1 to this Act.

(4) Vehicle excise and registration: nil licences

Chapter	Short title	Extent of repeal
1994 c. 22.	The Vehicle Excise and Registration Act 1994.	In section 22(2A)(a), the word "and" immediately before paragraph (b).

(5) Assessments for excise duty purposes

Chapter	Short title	Extent of repeal
1992 c. 48.	The Finance (No. 2) Act 1992.	In section 2(3), paragraph (b) and the word "and" immediately preceding it.
1994 c. 9.	The Finance Act 1994.	At the end of section 12A(3)(b) the word "or".

These repeals have effect in accordance with an order made under paragraph 12 of Schedule 2 to this Act.

Part II Value added tax

Chapter	Short title	Extent of repeal
1994 c. 23.	The Value Added Tax Act 1994.	In section 36(1)(a), the words "for a consideration in money".

This repeal has effect in accordance with section 23(7) of this Act.

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