Finance Act 2000 (c. 17)

(The document as of February, 2008)

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111 Payments under deduction of tax

(1) Chapter VIIA of Part IV of the Taxes Act 1988 (paying and collecting agents) shall cease to have effect.

(2) In section 349 of the Taxes Act 1988 (payments under deduction of tax)--

(a) in subsections (3)(c) and (3B) (payments excepted from deduction of tax), for "payment to which section 124 applies" substitute "payment of interest on a quoted Eurobond"; and

(b) in subsection (4), after the definition of "qualifying deposit right" insert--

" "quoted Eurobond" means any security that--

(i) is issued by a company,

(ii) is listed on a recognised stock exchange, and

(iii) carries a right to interest; " ;

and accordingly section 124 of that Act (interest on quoted Eurobonds) shall cease to have effect.

(3) In section 482 of the Taxes Act 1988 (supplementary provisions with respect to deposit-takers etc)--

(a) after subsection (2) insert--

" (2A) A declaration under section 481(5)(k)(i) must contain--

(a) in a case falling within section 481(4)(a), the name and principal residential address of the individual who is beneficially entitled to the interest or, where two or more individuals are so entitled, of each of them;

(b) in a case falling within section 481(4)(b), the name and principal residential address of each of the partners. " ; and

(b) subsection (11)(a) shall cease to have effect.

(4) In section 477A of the Taxes Act 1988 (building societies: regulations for deduction of tax), after subsection (2) insert--

" (2A) Without prejudice to the generality of subsection (2)(a) above, regulations under subsection (1) above may make provision with respect to the furnishing of information to or by building societies corresponding to any provision that is made by, or may be made under, section 482 with respect to the furnishing of information to or by deposit-takers. " .

(5) In section 37(11) of the [1997 c. 58.] Finance (No.2) Act 1997 (interest to be paid gross), for "Sections 50 and 118D(4)" substitute "Section 50".

(6) In this section--

(a) subsections (1) and (5) apply to relevant payments or receipts in relation to which the chargeable date for the purposes of Chapter VIIA of Part IV is on or after 1st April 2001;

(b) subsection (2) applies in relation to payments of interest made on or after that date;

(c) subsection (3) applies in relation to declarations under section 481(5)(k)(i) of the Taxes Act 1988 made on or after 6th April 2001.

112 UK public revenue dividends: deduction of tax

(1) In subsection (A1) of section 50 of the Taxes Act 1988 (Treasury directions for payment of public revenue dividends without deduction of tax), for "registered gilt-edged securities" substitute "gilt-edged securities".

(2) After subsection (3B) of section 349 of that Act (payments not out of profits or gains brought into charge to income tax, and annual interest) insert--

" (3C) Subject to any provision to the contrary in the Income Tax Acts, where any UK public revenue dividend is paid, the person by or through whom the payment is made shall, on making the payment, deduct out of it a sum representing the amount of income tax on it for the year in which the payment is made. " .

(3) At the end of subsection (4) of that section insert--

" "UK public revenue dividend" means any income from securities which is paid out of the public revenue of the United Kingdom or Northern Ireland, but does not include interest on local authority stock. " .

(4) After section 350 of that Act insert--

" 350A UK public revenue dividends: deduction of tax

(1) The Board may by regulations--

(a) make provision as to the time and manner in which persons who under section 349(3C) deduct sums representing income tax out of payments of UK public revenue dividends are to account for and pay those sums; and

(b) otherwise modify the provisions of sections 349 and 350 in their application to such dividends;

and in this section "UK public revenue dividend" has the same meaning as in section 349.

(2) Regulations under this section may--

(a) make different provision for different descriptions of UK public revenue dividend and for different circumstances;

(b) make special provision for UK public revenue dividends which--

(i) are payable to the Bank of Ireland out of the public revenue of the United Kingdom, or

(ii) are entrusted to the Bank of Ireland for payment and distribution and are not payable by that Bank out of its principal office in Belfast;

(3) No regulations under this section shall be made unless a draft of them has been laid before and approved by a resolution of the House of Commons. " .

(5) This section applies to payments made on or after 1st April 2001.

113 Tax treatment of expenditure on production or acquisition of films

(1) In section 68 of the of the [1990 c. 1.] Capital Allowances Act 1990 (expenditure relating to films, tapes and discs), for subsection (1) substitute--

" (1) Expenditure incurred on the production or acquisition of a film, tape or disc shall be regarded for the purposes of the Tax Acts as expenditure of a revenue nature, subject to any election under subsection (9) below. " .

(2) For subsection (2) of that section substitute--

" (2) In this section any reference to a film, tape or disc is to the master negative, master tape or master audio disc of a film as defined in section 43 of the Finance (No.2) Act 1992.

Any such reference includes a reference to any rights in the film (or its soundtrack) that are held or acquired with the master negative, master tape or master audio disc. " .

(3) In section 42 of the [1992 c. 48.] Finance (No.2) Act 1992 (relief for production or acquisition expenditure), for subsection (9) substitute--

" (9) This section has effect in relation to expenditure incurred--

(a) on the production of a film completed on or after 10th March 1992, or

(b) on the acquisition of the master negative, master tape or master disc of a film completed on or after that date. " .

(4) In section 43 of that Act (interpretation)--

(a) in subsection (2)(b) (treatment of acquisition of rights in film), for "any description of rights in it" substitute "any rights in the film (or its soundtrack) that are held or acquired with the master negative, master tape or master audio disc"; and

(b) in subsection (3), omit paragraph (b) and the word "or" preceding it.

(5) This section applies to expenditure on the production of a film--

(a) if the first day of principal photography is on or after 21st March 2000, or

(b) if the first day of principal photography is before that date but--

(i) the film is completed on or after that date, and

(ii) the person incurring the expenditure elects that the provisions of this section should apply.

For this purpose a film is completed at the time when it is first in a form in which it can reasonably be regarded as ready for copies of it to be made and distributed for presentation to the general public.

Any election under paragraph (b)(ii) above, once made, is irrevocable.

(6) This section applies to expenditure incurred on the acquisition of a master negative, master tape or master audio disc of a film (as defined in section 43 of the [1992 c. 48.] Finance (No.2) Act 1992) on or after 6th April 2000.

Part IV Stamp duty and Stamp duty reserve tax

Stamp duty

114 Rates: conveyance or transfer on sale

(1) In Schedule 13 to the [1999 c. 16.] Finance Act 1999 (instruments chargeable and rates of duty), in Part I (conveyance or transfer on sale), in the third column of the table in paragraph 4--

(a) in the third entry, for "2.5%" substitute "3%"; and

(b) in the fourth entry, for "3.5%" substitute "4%".

(2) This section applies to instruments executed on or after 28th March 2000.

(3) But this section does not apply to an instrument giving effect to a contract made on or before 21st March 2000, unless--

(a) the instrument is made in consequence of the exercise after that date of any option, right of pre-emption or similar right; or

(b) the instrument transfers the property in question to, or vests it in, a person other than the purchaser under the contract, because of an assignment (or, in Scotland, assignation) or further contract made after that date.

(4) This section shall be deemed to have come into force on 28th March 2000.

115 Rates: duty on lease chargeable by reference to rent

(1) In Schedule 13 to the [1999 c. 16.] Finance Act 1999 (instruments chargeable and rates of duty), in Part II (lease)--

(a) in paragraph 11, in paragraph 1 of the table, and

(b) in paragraph 12(3), in paragraph 1(a) and (b) of the table,

for "£500" substitute "£5,000".

(2) This section has effect in relation to instruments executed on or after 28th March 2000.

(3) This section shall be deemed to have come into force on 28th March 2000.

116 Rate of duty on seven year leases

(1) In paragraph 12(3) of Schedule 13 to the [1999 c. 16.] Finance Act 1999 (rates of stamp duty on leases where part of consideration is rent), in paragraph 1 of the table, for "less than 7 years" substitute "not more than 7 years".

(2) This section applies to instruments executed on or after 1st October 1999, subject to Schedule 32 to this Act (which makes transitional provision for instruments executed on or after 1st October 1999 but before 28th March 2000).

(3) This section shall be deemed to have come into force on 28th March 2000.

117 Power to vary stamp duties

Schedule 33 to this Act (power to vary stamp duties) has effect.

118 Land transferred etc for other property

(1) Subsection (2) applies where--

(a) an instrument transferring or vesting an estate or interest in land would not, apart from this section, be or fall to be treated as a conveyance or transfer on sale for the purposes of stamp duty; but

(b) the transfer or vesting of the estate or interest is for consideration; and

(2) For the purposes of Part I of Schedule 13 to the Finance Act 1999 (stamp duty on conveyance or transfer on sale) the instrument transferring or vesting the estate or interest shall be taken to be a transfer on sale of the estate or interest.

(3) If--

(a) the other property is or includes one or more estates or interests in land, and

(b) ad valorem duty is chargeable on the conveyance or transfer of all or any of those estates or interests,

the amount of duty that would (apart from this subsection) be chargeable in consequence of subsection (2) on the transfer on sale there mentioned shall be reduced (but not below nil) by the total of the ad valorem duty chargeable as mentioned in paragraph (b).

(4) If, for the purposes of Part I of Schedule 13 to the Finance Act 1999, the amount or value of the consideration for the transfer on sale mentioned in subsection (2) would (apart from this subsection) exceed the market value of the estate or interest immediately before the execution of the instrument transferring or vesting it, the amount or value of the consideration shall be taken for those purposes to be equal to that market value.

(5) For the purposes of this section, the market value of property at any time is the price which that property might reasonably be expected to fetch on a sale at that time in the open market.

(6) Subsection (2) has effect even though--

(a) the transfer or vesting of the estate or interest is the whole or part of the consideration for a sale of the other property; or

(b) the transaction is by way of exchange.

(7) Subsection (2) does not affect any charge to stamp duty in respect of the same or any other instrument so far as it relates to the transfer of the other property.

(8) This section is subject to subsection (5) of section 119.

(9) This section shall be construed as one with the [1891 c. 39.] Stamp Act 1891.

(10) This section applies to instruments executed on or after 28th March 2000.

(11) But this section does not apply to an instrument giving effect to a contract made on or before 21st March 2000, unless--

(a) the instrument is made in consequence of the exercise after that date of any option, right of pre-emption or similar right; or

(12) This section shall be deemed to have come into force on 28th March 2000.

119 Transfer of land to connected company

(1) This section applies where an estate or interest in land is transferred to or vested in a company ("A") and--

(a) the person transferring or vesting the estate or interest ("B") is connected with A; or

(b) some or all of the consideration for the transfer or vesting consists of the issue or transfer of shares in a company with which B is connected.

(2) For the purposes of Part I of Schedule 13 to the Finance Act 1999 (stamp duty on conveyance or transfer on sale) an instrument transferring or vesting the estate or interest shall be taken to be a transfer on sale of the estate or interest.

(3) If for those purposes the amount or value of the consideration for the transfer on sale of the estate or interest would, apart from this subsection, be less than the value determined under subsection (4), the consideration shall be taken for those purposes to be the value determined under subsection (4).

(4) That value is--

(a) the market value of the estate or interest immediately before the execution of the instrument transferring or vesting it; but

(b) reduced by the value of so much of any actual consideration as does not consist of property.

(5) Where--

(a) apart from this section, an instrument would be chargeable to stamp duty in accordance with section 118, and

(b) apart from that section, the instrument would be chargeable to stamp duty in accordance with this section,

the stamp duty chargeable on the instrument shall be determined in accordance with this section (instead of that section).

(6) This section applies only if, in consequence of its application, the instrument transferring or vesting the estate or interest is chargeable with a greater amount of stamp duty than it would be apart from this section and section 118.

(7) For the purposes of this section, the market value of property at any time is the price which that property might reasonably be expected to fetch on a sale at that time in the open market.

(8) In this section--

"company" means any body corporate;
"shares" includes stock and the reference to shares in a company includes a reference to securities issued by a company.

(9) For the purposes of this section, the question whether any person is connected with another shall be determined in accordance with the provisions of section 839 of the Taxes Act 1988.

(10) This section shall be construed as one with the [1891 c. 39.] Stamp Act 1891.

(11) This section applies to instruments executed on or after 28th March 2000.

(12) But this section does not apply to an instrument giving effect to a contract made on or before 21st March 2000, unless--

(a) the instrument is made in consequence of the exercise after that date of any option, right of pre-emption or similar right; or

(13) This section shall be deemed to have come into force on 28th March 2000.

120 Exceptions from section 119

(1) Section 119 does not apply by virtue of paragraph (a) of subsection (1) of that section in any of the following cases (any reference in this section to A or B being taken as a reference to the person referred to as A or B, as the case may be, in that subsection).

(2) Case 1 is where B holds the estate or interest as nominee or bare trustee for A.

(3) Case 2 is where A is to hold the estate or interest as nominee or bare trustee for B.

(4) Case 3 is where B holds the estate or interest as nominee or bare trustee for some other person and A is to hold it as nominee or bare trustee for that other person.

(5) Case 4 is where (in a case not falling within subsection (2) or (4) above)--

(a) the transfer or vesting is a conveyance or transfer out of a settlement in or towards satisfaction of a beneficiary's interest;

(b) the beneficiary's interest is not an interest acquired for money or money's worth; and

(6) Case 5 is where (in a case not falling within subsection (3) above) A--

(a) is a person carrying on a business which consists of or includes the management of trusts; and

(b) is to hold the estate or interest as trustee acting in the course of that business.

(7) Case 6 is where (in a case not falling within subsection (3) above) A is to hold the estate or interest as trustee and, apart from section 839(3) of the Taxes Act 1988 (trustees as connected persons), would not be connected with B.

(8) Case 7 is where--

(a) B is a company;

(b) the transfer or vesting is, or is part of, a distribution of assets (whether or not in connection with the winding up of the company); and

(9) This section shall be construed as one with the [1891 c. 39.] Stamp Act 1891.

(10) This section applies to instruments executed after the day on which this Act is passed.

121 Grant of lease to connected company

(1) This section applies where a lease is granted to a company ("A") and--

(a) the person granting the lease ("B") is connected with A; or

(b) some or all of the consideration for the grant of the lease consists of the issue or transfer of shares in a company with which B is connected.

(2) Subsection (3) has effect for the purposes of stamp duty chargeable under Part II of Schedule 13 to the [1999 c. 16.] Finance Act 1999 (stamp duty on a lease) by reference to Part I of that Schedule (conveyance or transfer on sale).

(3) If, apart from this subsection, the amount or value of the consideration for the grant would be less than the value determined under subsection (4), the consideration shall be taken to be the value determined under subsection (4).

(4) That value is--

(a) the market value, immediately before the instrument granting the lease is executed, of the lease granted; but

(b) reduced by the value of so much of any actual consideration as does not consist of property.

(5) This section applies only if, in consequence of its application, the lease is chargeable with a greater amount of stamp duty than it would be apart from this section.

(6) For the purposes of this section, the market value of property at any time is the price which that property might reasonably be expected to fetch on a sale at that time in the open market.

(7) In this section--

"company" means any body corporate;
"shares" includes stock and the reference to shares in a company includes a reference to securities issued by a company.

(8) For the purposes of this section, the question whether any person is connected with another shall be determined in accordance with the provisions of section 839 of the Taxes Act 1988.

(9) This section shall be construed as one with the [1891 c. 39.] Stamp Act 1891.

(10) This section applies to instruments executed on or after 28th March 2000.

(11) But this section does not apply to an instrument giving effect to a contract made on or before 21st March 2000, unless--

(a) the instrument is made in consequence of the exercise after that date of any option, right of pre-emption or similar right; or

(12) This section shall be deemed to have come into force on 28th March 2000.

122 Marketable securities transferred etc for exempt property

(1) Subsection (2) applies where--

(a) an instrument transferring marketable securities would not, apart from this section, be or fall to be treated as a transfer on sale for the purposes of stamp duty; but

(b) the transfer of the marketable securities is for consideration; and

(2) For the purposes of Part I of Schedule 13 to the Finance Act 1999 (stamp duty on conveyance or transfer on sale) the instrument transferring the marketable securities shall be taken to be a transfer on sale of those securities.

(3) If the amount or value of the consideration for that transfer on sale would (apart from this subsection) exceed the market value of the marketable securities immediately before the execution of the instrument transferring them, the amount or value of the consideration shall be taken to be equal to that market value.

For this purpose the market value of property at any time is the price which that property might reasonably be expected to fetch on a sale at that time in the open market.

(4) Subsection (2) has effect even though--

(a) the transfer of the marketable securities is the whole or part of the consideration for a sale of the other property; or

(b) the transaction is by way of exchange.

(5) Subsection (2) does not affect any charge to stamp duty in respect of the same or any other instrument so far as it relates to the transfer of the other property.

(6) In this section "qualifying property" means any debt due, stock or securities, to the extent that the debt, stock or securities are not chargeable securities, within the meaning of Part IV of the [1986 c. 41.] Finance Act 1986 (stamp duty reserve tax).

(7) This section shall be construed as one with the [1891 c. 39.] Stamp Act 1891.

(8) This section applies to instruments executed on or after 28th March 2000.

(9) But this section does not apply to an instrument giving effect to a contract made on or before 21st March 2000, unless--

(a) the instrument is made in consequence of the exercise after that date of any option, right of pre-emption or similar right; or

(10) This section shall be deemed to have come into force on 28th March 2000.

123 Transfer of property between associated companies: Great Britain

(1) Amend section 42 of the [1930 c. 28.] Finance Act 1930 as follows.

(2) In subsection (2) (instruments on which stamp duty not chargeable) in paragraph (a) for "to another" substitute "("the transferor") to another ("the transferee")".

(3) In that subsection, after paragraph (b) insert-- " unless at the time the instrument is executed arrangements are in existence by virtue of which at that or some later time any person has or could obtain, or any persons together have or could obtain, control of the transferee but not of the transferor. " .

(4) In subsection (2B) (body to be parent of another if beneficial owner of 75% of ordinary share capital) after "if at that time the first body" insert "(a)" and at the end of the subsection add--

" (b) is beneficially entitled to not less than 75 per cent of any profits available for distribution to equity holders of the second body; and

(c) would be beneficially entitled to not less than 75 per cent of any assets of the second body available for distribution to its equity holders on a winding-up. " .

(5) In subsection (3)--

(a) after "The ownership referred to in" insert "paragraph (a) of"; and

(b) for "this section" substitute "that paragraph".

(6) At the end of the section add--

" (5) Schedule 18 to the [1988 c. 1.] Income and Corporation Taxes Act 1988 shall apply for the purposes of paragraphs (b) and (c) of subsection (2B) as it applies for the purposes of paragraphs (a) and (b) of section 413(7) of that Act; but this is subject to subsection (6).

(6) In determining for the purposes of this section whether a body corporate is the parent of the transferor, paragraphs 5(3) and 5B to 5E of Schedule 18 to the Income and Corporation Taxes Act 1988 shall not apply for the purposes of paragraph (b) or (c) of subsection (2B).

(7) In this section, "control" shall be construed in accordance with section 840 of the [1988 c. 1.] Income and Corporation Taxes Act 1988. " .

(7) This section has effect in relation to instruments executed after the day on which this Act is passed.

124 Transfer of property between associated companies: Northern Ireland

(1) Amend section 11 of the [1954 c. 23 (N.I.).] Finance Act (Northern Ireland) 1954 as follows.

(2) After subsection (2) (instruments on which stamp duty not chargeable) insert--

" (2A) But this section does not apply to an instrument by virtue of subsection (2)(a) if, at the time the instrument is executed, arrangements are in existence by virtue of which at that or some later time any person has or could obtain, or any persons together have or could obtain, control of the transferee but not of the transferor. " .

(3) In subsection (3AA) (body to be parent of another if beneficial owner of 75% of ordinary share capital) after "if at that time the first body" insert "(a)" and at the end of the subsection add--

" (b) is beneficially entitled to not less than 75 per cent of any profits available for distribution to equity holders of the second body; and

(c) would be beneficially entitled to not less than 75 per cent of any assets of the second body available for distribution to its equity holders on a winding-up. " .

(4) In subsection (3A)--

(a) after "The ownership referred to in" insert "paragraph (a) of"; and

(b) for "this section" substitute "that paragraph".

(5) At the end of the section add--

" (6) Schedule 18 to the [1988 c. 1.] Income and Corporation Taxes Act 1988 shall apply for the purposes of paragraphs (b) and (c) of subsection (3AA) as it applies for the purposes of paragraphs (a) and (b) of section 413(7) of that Act; but this is subject to subsection (7).

(7) In determining for the purposes of this section whether a body corporate is the parent of the transferor, paragraphs 5(3) and 5B to 5E of Schedule 18 to the Income and Corporation Taxes Act 1988 shall not apply for the purposes of paragraph (b) or (c) of subsection (3AA).

(8) In this section, "control" shall be construed in accordance with section 840 of the [1988 c. 1.] Income and Corporation Taxes Act 1988. " .

(6) This section has effect in relation to instruments executed after the day on which this Act is passed.

125 Grant of leases etc between associated companies

(1) Amend section 151 of the [1995 c. 4.] Finance Act 1995 as follows.

(2) In subsection (1) (stamp duty not chargeable on leases etc) at the end insert the following paragraph--

" This subsection is subject to subsection (4A) below. " .

(3) After subsection (4) insert--

" (4A) An instrument shall not be exempt from stamp duty by virtue of subsection (1) above if at the time the instrument is executed arrangements are in existence by virtue of which at that or some later time any person has or could obtain, or any persons together have or could obtain, control of the lessee but not of the lessor. " .

(4) In subsection (8) (body to be parent of another if beneficial owner of 75% of ordinary share capital) after "if at that time the first body" insert "(a)" and at the end of the subsection add--

" (b) is beneficially entitled to not less than 75 per cent of any profits available for distribution to equity holders of the second body; and

(c) would be beneficially entitled to not less than 75 per cent of any assets of the second body available for distribution to its equity holders on a winding-up. " .

(5) In subsection (10)--

(a) after "The ownership referred to in" insert "paragraph (a) of"; and

(b) for "this section" substitute "that paragraph".

(6) After subsection (10) insert--

" (10A) Schedule 18 to the [1988 c. 1.] Income and Corporation Taxes Act 1988 shall apply for the purposes of paragraphs (b) and (c) of subsection (8) as it applies for the purposes of paragraphs (a) and (b) of section 413(7) of that Act; but this is subject to subsection (10B).

(10B) In determining for the purposes of this section whether a body corporate is the parent of the lessor, paragraphs 5(3) and 5B to 5E of Schedule 18 to the Income and Corporation Taxes Act 1988 shall not apply for the purposes of paragraph (b) or (c) of subsection (8) above.

(10C) In this section, "control" shall be construed in accordance with section 840 of the [1988 c. 1.] Income and Corporation Taxes Act 1988. " .

(7) This section has effect in relation to instruments executed after the day on which this Act is passed.

126 Future issues of stock

(1) Amend section 55 of the [1891 c. 39.] Stamp Act 1891 (calculation of ad valorem duty in respect of stock and securities) as follows.

(2) After subsection (1) insert--

" (1A) For the purposes of subsection (1), it is immaterial--

(a) whether, at the time of the execution of the conveyance on sale, the stock or marketable security is or has been issued or is to be issued; and

(b) in a case where the stock or marketable security is to be issued, when it is to be, or is, issued and whether the issue is certain or contingent. " .

(3) This section has effect in relation to instruments executed after the day on which this Act is passed.

127 Company acquisition reliefs: redeemable shares

(1) Amend section 75 of the [1986 c. 41.] Finance Act 1986 (acquisitions: reliefs) in accordance with subsections (2) and (3).

(2) In subsection (4), in paragraph (a) (which requires that the consideration for the acquisition consists of or includes the issue of shares) after "the issue of" insert "non-redeemable".

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