Finance Act 1999 (c. 16)

(The document as of February, 2008)

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(3) Interest is payable at the rate prescribed under section 178 of the [1989 c. 26.] Finance Act 1989 for the purposes of section 15A of the [1891 c. 39.] Stamp Act 1891 (interest on late stamping).

(4) The amount of interest shall be rounded down (if necessary) to the nearest multiple of £5.

No interest is payable if the amount is less than £25.

(5) The interest shall be paid without any deduction of income tax and shall not be taken into account in computing income or profits for any tax purposes.

Penalty for false statement

25 A person who in furnishing particulars under this Part of this Schedule wilfully or negligently furnishes particulars that are false in any material respect is liable to a penalty not exceeding the aggregate of £300 and twice the amount by which the stamp duty chargeable exceeds that paid.

26 An instrument in respect of which duty is chargeable under paragraph 2 of this Schedule which--

(a) has been stamped ad valorem, or

(b) has been stamped with a stamp indicating that it is chargeable with a fixed duty under paragraph 6 (instrument in substitution for one stamped ad valorem) and has been stamped under that paragraph,

shall be treated as duly stamped for all purposes other than paragraph 25.

Section 113(3).

SCHEDULE 16 Stamp duty: amendments consequential on section 113

General amendment

1 (1) Any reference (express or implied) in any enactment, instrument or other document to the heading "Bearer Instrument" in Schedule 1 to the [1891 c. 39.] Stamp Act 1891 shall be construed, so far as is required for continuing its effect, as being or, as the case may require, including a reference to Schedule 15 to this Act.

(2) Sub-paragraph (1)--

(a) has effect subject to any express amendment made by this Act, and

(b) is without prejudice to the general application of section 17(2) of the [1978 c. 30.] Interpretation Act 1978 (general effect of repeal and re-enactment).

Finance Act 1963 (c. 25)

2 In section 67 of the Finance Act 1963 (prohibition of circulation of blank transfers) for subsection (4) substitute--

" (4) In this section--

(a) "stock" includes securities;

(b) references to stock include any interest in, or in any fraction of, stock or in any dividends or other rights arising out of stock and any right to an allotment of or to subscribe for stock; and

(4A) Nothing in this section applies to--

(a) an instrument which is chargeable with duty at the rate specified in paragraph 5 of Schedule 15 to the Finance Act 1999 (certain bearer instruments issued by or on behalf of non-UK companies) and is duly stamped, or

(b) renounceable letters of allotment, letters of rights or other similar instruments where the rights under the letter or other instrument are renounceable not later than six months after its issue. " .

Finance Act 1976 (c. 40)

3 In section 131(3) of the Finance Act 1976 (exemption for instruments issued by Inter-American Development Bank) for "the heading "Bearer Instrument" in Schedule 1 to the Stamp Act 1891" substitute "Schedule 15 to the Finance Act 1999 (bearer instruments)".

Finance Act 1984 (c. 43)

4 In section 126(3)(c) and (5) of the Finance Act 1984 (exemption for bearer instruments issued by designated international organisations) for "the heading "Bearer Instrument" in Schedule 1 to the Stamp Act 1891" substitute "Schedule 15 to the Finance Act 1999 (bearer instruments)".

Finance Act 1986 (c. 41)

5 In section 79(2) of the Finance Act 1986 (exemption for instruments relating to loan capital), for "the heading "Bearer Instrument" in Schedule 1 to the Stamp Act 1891" substitute "Schedule 15 to the Finance Act 1999 (bearer instruments)".

6 (1) Section 90 of the Finance Act 1986 (exceptions from general charge to stamp duty reserve tax) is amended as follows.

(2) In subsection (3) for paragraph (a) substitute--

" (a) a non-UK bearer instrument; " .

(3) In subsection (3A) for "an inland bearer instrument within the meaning of the heading "Bearer Instrument" in Schedule 1 to the Stamp Act 1891" substitute "a UK bearer instrument".

(4) In subsection (3B) for "exemption 3 in the heading "Bearer Instrument" in Schedule 1 to the Stamp Act 1891" substitute "the exemption conferred by paragraph 16 of Schedule 15 to the Finance Act 1999 (renounceable letters of allotment etc.)".

(5) In subsection (3C) for paragraph (b) substitute--

" (b) stamp duty under Schedule 15 to the Finance Act 1999 was not chargeable on the issue of the instrument by virtue only of the exemption conferred by paragraph 17 of that Schedule (non-sterling bearer instruments); and " .

(6) In subsection (3E) for paragraph (b) substitute--

" (b) stamp duty under Schedule 15 to the Finance Act 1999 was not chargeable on the issue of the instrument--

(i) by virtue only of the exemption conferred by section 79(2) above (bearer instruments relating to loan capital), or

(ii) by virtue only of that provision and paragraph 17 of that Schedule (non-sterling bearer instruments); " .

7 (1) In section 95 of the Finance Act 1986 (exceptions from charge to stamp duty reserve tax on entry into depositary receipt system), for subsection (2) substitute--

" (2) There shall be no charge to tax under section 93 above in respect of a transfer, issue or appropriation of a UK bearer instrument, except in the case of--

(a) an instrument within the exemption conferred by paragraph 16 of Schedule 15 to the Finance Act 1999 (renounceable letters of allotment etc. where rights are renounceable not later than six months after issue), or

(b) an instrument within the exemption conferred by paragraph 17 of that Schedule (non-sterling instruments) which--

(i) does not raise new capital, and

(ii) is not issued in exchange for an instrument raising new capital. " .

(2) There shall be no charge to tax under section 93 of that Act by virtue of paragraph (b) of subsection (2) of section 95 as substituted by sub-paragraph (1) above in the case of an instrument which gives effect to an agreement for a company merger or takeover entered into in writing by the companies involved before 30th January 1999.

8 (1) In section 97 of the Finance Act 1986 (exceptions from charge to stamp duty reserve tax on entry into clearance system), for subsection (3) substitute--

" (3) There shall be no charge to tax under section 96 above in respect of a transfer or issue of a UK bearer instrument, except in the case of--

(b) an instrument within the exemption conferred by paragraph 17 of that Schedule (non-sterling instruments) which--

(i) does not raise new capital, and

(ii) is not issued in exchange for an instrument raising new capital. " .

(2) There shall be no charge to tax under section 96 of that Act by virtue of paragraph (b) of subsection (3) of section 97 as substituted by sub-paragraph (1) above in the case of an instrument which gives effect to an agreement for a company merger or takeover entered into in writing by the companies involved before 30th January 1999.

9 In section 99 of the Finance Act 1986 (interpretation of Part IV), after subsection (1) insert--

" (1A) "Bearer instrument" has the same meaning as in Schedule 15 to the Finance Act 1999.

An instrument is a "UK bearer instrument" or "non-UK bearer instrument" according to whether it is issued by or on behalf of a UK company or a non-UK company within the meaning of that Schedule. " .

Finance Act 1987 (c. 16)

10 (1) Section 50 of the Finance Act 1987 (warrants to purchase government stock etc.: exempt securities) is amended as follows.

(2) In subsection (2) for "the heading "Bearer Instrument" in Schedule 1 to the Stamp Act 1891" substitute "Schedule 15 to the Finance Act 1999 (bearer instruments)".

(3) In subsection (3)(b) for the words from "by virtue of section 30" to "1891" substitute "exempt from stamp duty under paragraph 1 of Schedule 15 to the Finance Act 1999 (issue of bearer instrument) by virtue of paragraph 17 of that Schedule (certain non-sterling instruments)".

(4) In subsection (3)(c) for the words from "by virtue of section 30" to "that heading" substitute "exempt from stamp duty under that Schedule by virtue of paragraph 17 of that Schedule or section 79(2) of the Finance Act 1986".

Finance Act 1988 (c. 39)

11 (1) Section 143 of the Finance Act 1988 (paired shares) is amended as follows.

(2) For subsection (2) substitute--

" (2) In relation to an instrument to which this subsection applies, no duty is chargeable under paragraph 1 of Schedule 15 to the Finance Act 1999 (bearer instruments: charge on issue); but this does not affect the other requirements of that Schedule. " .

(3) In subsection (3) for "This subsection applies" substitute "Subsection (2) above applies".

(4) For subsection (4) substitute--

" (4) In relation to an instrument to which this subsection applies--

(a) the foreign company shall be treated for the purposes of Schedule 15 to the Finance Act 1999 (stamp duty on bearer instruments) as a UK company, and

(b) paragraph 17 of that Schedule (exemption for non-sterling instruments) shall not apply. " .

(5) In subsection (5) for "This subsection applies" substitute "Subsection (4) above applies".

Finance Act 1990 (c. 29)

12 For section 107 of the Finance Act 1990 (bearers: abolition of stamp duty) substitute--

" 107 Stamp duty to be abolished on bearer instruments

(1) Stamp duty shall not be chargeable under Schedule 15 to the Finance Act 1999 (bearer instruments).

(2) Subsection (1) above applies in relation to the charge under paragraph 1 of that Schedule (charge on issue) where the instrument is issued on or after the abolition day.

(3) Subsection (1) above applies in relation to the charge under paragraph 2 of that Schedule (charge on transfer of stock) where the stock constituted by or transferable by means of the instrument is transferred on or after the abolition day. " .

Section 114.

SCHEDULE 17 Stamp duty: penalties other than on late stamping

Part I Amendments of penalties

Introduction

1 The amendments in this Part of this Schedule--

(a) replace administrative fines by penalties;

(b) amend provisions imposing a fine or penalty of a specified amount so as to impose a penalty not exceeding a specified amount;

Stamp Duties Management Act 1891 (c. 38)

2 (1) The Stamp Duties Management Act 1891 is amended as follows.

(2) In section 12A (lost or spoiled instruments), in subsection (2)(b) for ", fine or penalty" (twice) substitute "or penalty".

(3) In section 21 (penalty for frauds in relation to duties), for "a fine of fifty pounds" substitute "a penalty not exceeding £3,000".

Stamp Act 1891 (c. 39)

3 (1) The Stamp Act 1891 is amended as follows.

(2) In section 5 (failure to set out in instrument facts and circumstances affecting duty), for "a fine of ten pounds" substitute "a penalty not exceeding £3,000".

(3) In section 9(1) (penalty for frauds in relation to instrument bearing adhesive stamp), for the words from "he shall" to the end substitute "he is liable to a penalty not exceeding £3,000".

(4) In section 16 (rolls, books, etc. to be open to inspection), for "a fine of ten pounds" substitute "a penalty not exceeding £300".

(5) In section 17 (penalty for enrolling, etc. instrument not duly stamped), for "a fine of ten pounds" substitute "a penalty not exceeding £300".

(6) In section 83 (penalty on issuing etc. foreign etc. security not duly stamped), for "a fine of twenty pounds" substitute "a penalty not exceeding £300".

Finance Act 1946 (c. 64)

4 In section 56(3) of the Finance Act 1946 (unit trust schemes: failure to keep records), for "a fine of ten pounds" substitute "a penalty not exceeding £300".

Finance (No. 2) Act (Northern Ireland) 1946 (c. 17 (N.I.))

5 In section 27(3) of the Finance (No. 2) Act (Northern Ireland) 1946 (unit trust schemes: failure to keep records), for "a fine of ten pounds" substitute "a penalty not exceeding £300".

Finance Act 1963 (c. 25)

6 In section 67(1) of the Finance Act 1963 (prohibition of circulation of blank transfers), for "fine" substitute "penalty" and for "£50" substitute "£300".

Finance Act (Northern Ireland) 1963 (c. 22 (N.I.))

7 In section 16(1) of the Finance Act (Northern Ireland) 1963 (prohibition of circulation of blank transfers), for "fine" substitute "penalty" and for "fifty pounds" substitute "£300".

Finance Act 1986 (c. 41)

8 In section 68(4) and (5) and section 71(4) and (5) of the Finance Act 1986 (depositary receipts and clearance services: failure to comply with requirements as to notification), for "fine" substitute "penalty".

Part II Determination of penalty and appeals

Introduction

9 (1) This Part of this Schedule applies to penalties under the enactments relating to stamp duty, other than penalties under section 15B of the [1891 c. 39.] Stamp Act 1891 (penalty on late stamping).

(2) Nothing in this Part of this Schedule affects criminal proceedings for an offence.

Determination of penalty by officer of Commissioners

10 (1) An officer of the Commissioners authorised by the Commissioners for the purposes of this paragraph may make a determination--

(a) imposing the penalty, and

(b) setting it at such amount as in the officer's opinion is correct or appropriate.

(2) Notice of the determination must be served on the person liable to the penalty.

The notice must also state--
(a)
the date on which the notice is issued, and
(b)
the time within which an appeal against the determination may be made.

(3) After notice of the determination has been served, the determination cannot be altered except--

(a) in accordance with sub-paragraph (4),

(b) by agreement in writing, or

(4) If it is discovered by an officer of the Commissioners authorised by the Commissioners for the purposes of this paragraph that the amount of a penalty determined under this paragraph is or has become insufficient, the officer may make a determination in a further amount so that the penalty is set at the amount which in the officer's opinion is correct or appropriate.

(5) If a person liable to a penalty has died--

(a) any determination which could have been made in relation to that person may be made in relation to his personal representatives, and

(b) any penalty imposed on them is a debt due from and payable out of the person's estate.

(6) A penalty determined under this paragraph is due and payable at the end of the period of 30 days beginning with the date of the issue of the notice of determination.

11 (1) An appeal lies to the Special Commissioners against a determination under paragraph 10.

(2) Notice of appeal must be given in writing to the officer of the Commissioners by whom the determination was made within 30 days of the date of the notice of the determination.

(3) An appeal may be brought out of time with the consent of the Commissioners or the Special Commissioners.

The Commissioners--
(a)
shall give that consent if satisfied, on an application for that purpose, that there was a reasonable excuse for not bringing the appeal within the time limit, and
(b)
if not so satisfied, shall refer the matter for determination by the Special Commissioners.

(4) The notice of appeal must specify the grounds of appeal, but on the hearing of the appeal the Special Commissioners may allow the appellant to put forward a ground not specified in the notice of appeal, and take it into consideration, if satisfied that the omission was not wilful or unreasonable.

(5) The powers conferred by section 46A(1)(c) and (2) to (4) and sections 56B to 56D of the [1970 c. 9.] Taxes Management Act 1970 (power of Lord Chancellor to make regulations as to jurisdiction, practice and procedure in relation to appeals to Special Commissioners) apply in relation to appeals under this paragraph.

(6) On an appeal under this paragraph the Special Commissioners may--

(a) if it appears to them that no penalty has been incurred, set the determination aside;

(b) if the amount determined appears to them to be appropriate, confirm the determination;

(c) if the amount determined appears to them to be excessive, reduce it to such other amount (including nil) as they consider appropriate;

(d) if the amount determined appears to them to be insufficient, increase it to such amount not exceeding the permitted maximum as they consider appropriate.

12 (1) Section 56A of the Taxes Management Act 1970 (general right of appeal on point of law) applies in relation to a decision of the Special Commissioners under paragraph 11.

(2) Without prejudice to that right of appeal, an appeal lies against the amount of a penalty determined by the Special Commissioners under paragraph 11, at the instance of the person liable to the penalty--

(a) to the High Court, or

(b) in Scotland, to the Court of Session sitting as the Court of Exchequer.

(3) On an appeal under sub-paragraph (2) the court has the same powers as are conferred on the Special Commissioners by paragraph 11(6) above.

Penalty proceedings before the court

13 (1) Where in the opinion of the Commissioners the liability of a person for a penalty arises by reason of his fraud or the fraud of another person, proceedings for the penalty may be brought--

(a) in the High Court, or

(b) in Scotland, in the Court of Session sitting as the Court of Exchequer.

(2) Proceedings under this paragraph in England and Wales shall be brought--

(a) by and in the name of the Commissioners as an authorised department for the purposes of the [1947 c. 44.] Crown Proceedings Act 1947, or

(b) in the name of the Attorney General.

Any such proceedings shall be deemed to be civil proceedings by the Crown within the meaning of Part II of the Crown Proceedings Act 1947.

(3) Proceedings under this paragraph in Scotland shall be brought in the name of the Advocate General for Scotland.

(4) Proceedings under this paragraph in Northern Ireland shall be brought--

(a) by and in the name of the Commissioners as an authorised department for the purposes of the Crown Proceedings Act 1947 as for the time being in force in Northern Ireland, or

(b) in the name of the Attorney General for Northern Ireland.

Any such proceedings shall be deemed to be civil proceedings within the meaning of Part II of the Crown Proceedings Act 1947 as for the time being in force in Northern Ireland.

(5) If in proceedings under this paragraph the court does not find that fraud is proved but considers that the person concerned is nevertheless liable to a penalty, the court may determine a penalty notwithstanding that, but for the opinion of the Commissioners as to fraud, the penalty would not have been a matter for the court.

(6) Paragraph 10 above (determination of penalty by officer of Commissioners) does not apply where proceedings are brought under this paragraph.

Supplementary provisions

14 (1) The Commissioners may in their discretion mitigate any penalty, or stay or compound any proceedings for the recovery of a penalty.

(2) They may also, after judgment, further mitigate or entirely remit the penalty.

15 A penalty may be determined under paragraph 10, or proceedings for a penalty brought under paragraph 13, at any time within six years after the date on which the penalty was incurred.

Part III Power to apply provisions as to collection and recovery etc

16 (1) The Treasury may make regulations applying in relation to penalties to which Part II of this Schedule applies such provisions of the [1970 c. 9.] Taxes Management Act 1970 as they think fit.

(2) The regulations may apply the provisions of that Act with such modifications as the Treasury think fit.

(3) Regulations under this paragraph shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of the House of Commons.

17 Without prejudice to the generality of the power conferred by paragraph 16, regulations under that paragraph may apply--

(a) any of the provisions of Part VI of the Taxes [1970 c. 9.] Management Act 1970 (collection and recovery), and

(b) such of the provisions of Part XI of that Act (miscellaneous and supplemental provisions) as appear to the Treasury to be appropriate.

18 Sections 21, 22 and 35 of the [1890 c. 21.] Inland Revenue Regulation Act 1890 (proceedings for fines, etc.) do not apply in relation to penalties to which Part II of this Schedule applies.

Section 115.

SCHEDULE 18 Stamp duty: minor amendments and repeal of obsolete provisions

Part I Minor amendments

Introduction

1 The provisions of this Part of this Schedule have effect for the purposes of the enactments relating to stamp duty.

Payment by cheque

2 (1) Where--

(a) any payment to the Commissioners is made by cheque, and

(b) the cheque is paid on its first presentation to the banker on whom it is drawn,

the payment is treated as made on the day on which the cheque was first received by the Commissioners.

(2) Sub-paragraph (1) applies where the cheque was first received by the Commissioners on or after 1st October 1999.

Evidence in cases of fraudulent conduct, etc.

3 (1) Statements made or documents produced by or on behalf of a person are not inadmissible in any such proceedings as are mentioned in sub-paragraph (2) by reason only that it has been drawn to that person's attention--

(a) that pecuniary settlements may be accepted instead of a penalty being determined, or proceedings being instituted, or

(b) that, though no undertaking can be given as to whether or not the Commissioners will accept such a settlement in the case of any particular person, it is the practice of the Commissioners to be influenced by the fact that a person has made a full confession of any fraudulent conduct to which he had been a party and has given full facilities for investigation,

and that he was or may have been induced thereby to make the statements or produce the documents.

(2) The proceedings mentioned in sub-paragraph (1) are--

(a) any criminal proceedings against the person in question for any form of fraudulent conduct in connection with or in relation to stamp duty, and

(b) any proceedings against that person for the recovery of any stamp duty or interest on unpaid stamp duty due from him, and

(c) any proceedings for a penalty, or on appeal against the determination of a penalty, in connection with or in relation to stamp duty.

References to duration of lease

4 In relation to Scotland, the expression "term", where referring to the duration of a lease, means "period".

Part II Obsolete provisions

5 (1) Section 13 of the [1891 c. 38.] Stamp Duties Management Act 1891 (certain offences in relation to dies and stamps provided by the Commissioners to be felonies) is amended as follows.

(2) For the sidenote substitute "Offences in relation to dies and stamps.".

(3) Make the existing provision subsection (1) and at the beginning, for "Every person who" substitute "A person commits an offence who".

(4) Omit the words from "shall be guilty of felony" to the end.

(5) After subsection (1) insert--

" (2) A person guilty of an offence under this section is liable--

(a) on summary conviction, to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum, or both;

(b) on conviction on indictment, to imprisonment for a term not exceeding ten years or a fine, or both. " .

(6) This paragraph has effect in relation to things done or omitted on or after 1st October 1999.

6 (1) The following provisions of the Stamp Duties Management Act 1891 shall cease to have effect--

in section 2 (recovery of money received for duty), subsections (2) and (3);
section 3 (power to grant licences to deal in stamps);
section 4 (penalty for unauthorised dealing in stamps etc.);
section 5 (provisions as to determination of a licence);
section 6 (penalty for hawking stamps);
section 8 (discount on sale of stamps);
section 9(2) and (3) (cases in which allowance may be made for spoiled adhesive stamps);
in section 11 (how allowance to be made), the words from "deducting therefrom" to the end;
section 12 (repurchase of stamps by Commissioners);
section 17 (proceedings for detection of stamps stolen or fraudulently obtained);
section 18 (licensed person in possession of forged stamps to be presumed guilty);
section 19 (mode of proceeding when stamps are seized);
section 20 (defacement of adhesive stamps);
section 25 (mode of granting licences).

(2) This paragraph comes into force on 1st October 1999.

Section 122(4).

SCHEDULE 19 Stamp duty and stamp duty reserve tax: unit trusts

Part I Abolition of stamp duty on transfers etc. of units in unit trusts

1 (1) No stamp duty is chargeable on a transfer or other instrument relating to a unit under a unit trust scheme.

(2) Sub-paragraph (1) does not affect any charge to stamp duty--

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