Finance (No. 2) Act 1992 (c. 48)

(The document as of February, 2008)

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(1B) This subsection applies to a subsidiary if--

(a) it is a property managing subsidiary, and

(b) reading each reference in subsection (2) below to 90 per cent. as a reference to 51 per cent., the conditions in that subsection are satisfied in respect of it and, except as provided by subsection (3) below, continue to be satisfied in respect of it until the end of the relevant period. "

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

" (a) a subsidiary is a property managing subsidiary if it exists wholly, or substantially wholly, for the purpose of holding or managing (or holding and managing) a single block of flats and more than half of those flats are let by the qualifying company or any of its subsidiaries in the course of qualifying activities; " . "

40 Extension of relief for private rented housing: lettings to former owner-occupiers

(1) In Part II of Schedule 4 to the [1988 c. 39.] Finance Act 1988 (extension of business expansion scheme to private rented housing: exclusion of certain dwelling-houses) paragraph 15 shall be amended as follows.

(2) In sub-paragraph (1), for "Section 50" there shall be substituted "Subject to sub-paragraphs (1A) to (1C) below, section 50".

(3) The following sub-paragraphs shall be inserted after sub-paragraph (1)--

" (1A) Section 50 of this Act is not precluded from applying to a dwelling-house by sub-paragraph (1)(a) above if the arrangements there mentioned were for letting to a person who was an owner-occupier of the dwelling-house before the relevant date.

(1B) Section 50 of this Act is not precluded from applying to a dwelling-house by sub-paragraph (1)(b) above if the letting there mentioned was to a person--

(a) who was an owner-occupier of the dwelling-house before the date of the letting, and

(b) to whom the dwelling-house or part is let on a qualifying tenancy by the company or any of its subsidiaries after the relevant date.

(1C) Section 50 of this Act is not precluded from applying to a dwelling-house by sub-paragraph (1)(c) above if the letting there mentioned was to a person--

(a) who was an owner-occupier of the dwelling-house before the relevant date, and

(b) to whom the dwelling-house or part is let on a qualifying tenancy by the company or any of its subsidiaries after the letting mentioned in sub-paragraph (1)(c). "

(4) The following sub-paragraphs shall be added after sub-paragraph (2)--

" (3) For the purposes of this paragraph, a person shall be taken to have been an owner-occupier of a dwelling-house before the relevant date or, as the case may be, the date mentioned in sub-paragraph (1B)(a) above if--

(a) at any time before that date, he occupied the dwelling-house as his only or principal home and had a freehold interest in it, or

(b) for a period of at least two years ending on that date, he occupied the dwelling-house as his only or principal home and had an interest in it under a lease for a term of years certain not less than twenty-one of which remained unexpired at that date.

(4) In the application of sub-paragraph (3) above to a dwelling-house in Scotland--

(a) for paragraph (a) there shall be substituted--

" (a) at any time before that date he occupied the dwelling-house and--

(i) was the absolute owner of it, or

(ii) was the owner of the dominium utile in it, " ; and

(b) in paragraph (b) the word "certain" shall be omitted.

(5) In the application of sub-paragraph (3) above to a dwelling-house in Northern Ireland, any conveyance or assignment of an interest in it by way of mortgage shall be disregarded. "

(5) This section shall have effect where shares are issued on or after 10th March 1992.

Films

41 Relief for preliminary expenditure

(1) Subject to the following provisions of this section and any other provisions of the Tax Acts, in computing for tax purposes the profits or gains accruing to a person in a relevant period from a trade or business which consists of or includes the exploitation of films, that person shall (on making a claim) be entitled to deduct the amount of any expenditure of a revenue nature payable by him in that or an earlier relevant period--

(a) which is expenditure to which this section applies,

(b) in respect of which no deduction has previously been made (whether under this section or otherwise) in computing for tax purposes the profits or gains accruing from the trade or business, and

(2) This section applies to any expenditure that--

(a) can reasonably be said to have been incurred with a view to enabling a decision to be taken as to whether or not to make a film,

(b) is payable before the first day of principal photography (where the decision that is taken is to make the film), and

(3) A deduction shall not be made in respect of a film that has been completed unless the master negative of the film or any master tape or master disc of the film is a qualifying film, tape or disc.

(4) A deduction shall not be made in respect of a film that has not been completed unless it is reasonably likely that if the film were completed the master negative of the film or any master tape or master disc of the film would be a qualifying film, tape or disc.

(5) The total amount deducted under this section in respect of a film shall not exceed 20 per cent. of the budgeted total expenditure on the film, as calculated at the first day of principal photography.

(6) A claim under this section shall be made not later than two years after the end of the relevant period in which the expenditure to which it relates becomes payable.

(7) To the extent that a deduction has been made in respect of any expenditure under this section, no further deduction shall be made in respect of it in computing for tax purposes the profits or gains of the trade or business concerned.

(8) This section shall have effect in relation to expenditure payable on or after 10th March 1992.

42 Relief for production or acquisition expenditure

(a) which is expenditure to which subsection (2) or (3) below applies, and

(b) in respect of which no deduction has been made by virtue of subsections (3) to (6) of section 68 of the 1990 Act and no election has been made under subsection (9) of that section.

(2) This subsection applies to any expenditure of a revenue nature incurred by the claimant on the production of a film--

(a) which was completed in the relevant period to which the claim relates or an earlier relevant period, and

(b) the master negative of which or any master tape or master disc of which is a qualifying film, tape or disc.

(3) This subsection applies to any expenditure of a revenue nature incurred by the claimant on the acquisition of the master negative of a film or any master tape or master disc of a film where--

(a) the film was completed in the relevant period to which the claim relates or an earlier relevant period, and

(b) the master negative, tape or disc is a qualifying film, tape or disc.

(4) Any amount deducted for a relevant period under subsection (1) above shall not exceed--

(a) one third of the total expenditure incurred by the claimant on the production of the film concerned or the acquisition of the master negative or any master tape or master disc of it,

(b) one third of the sum obtained by deducting from the amount of that total expenditure the amount of so much of that total expenditure as has already been deducted by virtue of section 41 above, or

(c) so much of that total expenditure as has not already been deducted by virtue of section 68(3) to (6) of the 1990 Act, section 41 above or this section,

whichever is less.

(5) In relation to a relevant period of less than twelve months, the references to one third in subsection (4) above shall be read as references to a proportionately smaller fraction.

(6) A claim under this section shall be made not later than two years after the end of the relevant period to which the claim relates and shall be irrevocable.

(7) Where any expenditure is deducted by virtue of section 68(3) to (6) of the 1990 Act in computing the profits or gains of a trade or business for a relevant period, no deduction shall be made under this section for that relevant period in respect of expenditure incurred on the production or acquisition of the film concerned.

(8) This section does not apply to the profits or gains of a trade in which the film concerned constitutes trading stock, as defined in section 100(2) of the Taxes Act 1988.

(9) This section shall have effect in relation to expenditure incurred on films completed on or after 10th March 1992.

43 Interpretation of sections 41 and 42

(1) In sections 41 and 42 above and this section--

"expenditure of a revenue nature" has the meaning given in section 68(10) of the 1990 Act,
"master disc", in relation to a film, means the original master film disc or the original master audio disc of the film,
"master negative", in relation to a film, means the original master negative of the film and its soundtrack (if any),
"master tape", in relation to a film, means the original master film tape or the original master audio tape of the film,
"qualifying disc" means a master disc of a film certified by the Secretary of State under Schedule 1 to the [1985 c. 21.] Films Act 1985 as a qualifying disc for the purposes of section 68 of the 1990 Act,
"qualifying film" means a master negative of a film certified by the Secretary of State under Schedule 1 to the [1985 c. 21.] Films Act 1985 as a qualifying film for the purposes of section 68 of the 1990 Act,
"qualifying tape" means a master tape of a film certified by the Secretary of State under Schedule 1 to the [1985 c. 21.] Films Act 1985 as a qualifying tape for the purposes of section 68 of the 1990 Act,
"relevant period" has the meaning given in section 68(3) of the 1990 Act, and
"the 1990 Act" means the [1990 c. 1.] Capital Allowances Act 1990.

(2) In sections 41 and 42 above and this section--

(a) any reference to a film shall be construed in accordance with paragraph 1 of Schedule 1 to the Films Act 1985, and

(b) any reference to the acquisition of a master negative, master tape or master disc of a film includes a reference to the acquisition of any description of rights in it.

(3) For the purposes of sections 41 and 42 above a film is completed--

(a) 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, or

(b) in a case within section 42 where the expenditure in question was incurred on the acquisition of the master negative of the film or any master tape or master disc of the film and it was acquired after the time mentioned in paragraph (a) above, at the time it was acquired.

Transfers of trade

44 Transfer of a UK trade: amendment of 1992 Act

The [1992 c. 12.] Taxation of Chargeable Gains Act 1992 shall have effect, and be deemed always to have had effect, with the insertion of the following after section 140--

" Transfers concerning companies of different member States

140A Transfer of a UK trade

(1) This section applies where--

(a) a qualifying company resident in one member State (company A)

transfers the whole or part of a trade carried on by it in the United Kingdom to a qualifying company resident in another member State (company B),

(b) the transfer is wholly in exchange for securities issued by company B to company A,

(d) section 140B does not prevent this section applying, and

(e) the appropriate condition is met in relation to company B immediately after the time of the transfer.

(2) Where immediately after the time of the transfer company B is not resident in the United Kingdom, the appropriate condition is that were it to dispose of the assets included in the transfer any chargeable gains accruing to it on the disposal would form part of its chargeable profits for corporation tax purposes by virtue of section 10(3).

(3) Where immediately after the time of the transfer company B is resident in the United Kingdom, the appropriate condition is that none of the assets included in the transfer is one in respect of which, by virtue of the asset being of a description specified in double taxation relief arrangements, the company falls to be regarded for the purposes of the arrangements as not liable in the United Kingdom to tax on gains accruing to it on a disposal.

(4) Where this section applies--

(a) the two companies shall be treated, so far as relates to corporation tax on chargeable gains, as if any assets included in the transfer were acquired by company B from company A for a consideration of such amount as would secure that on the disposal by way of transfer neither a gain nor a loss would accrue to company A;

(b) section 25(3) shall not apply to any such assets by reason of the transfer (if it would apply apart from this paragraph).

(5) For the purposes of subsection (1)(a) above, a company shall be regarded as resident in a member State if it is within a charge to tax under the law of the State because it is regarded as resident for the purposes of the charge.

(6) For the purposes of subsection (5) above, a company shall be treated as not within a charge to tax under the law of a member State if it falls to be regarded for the purposes of any double taxation relief arrangements to which the State is a party as resident in a territory which is not within any of the member States.

(7) In this section--

"qualifying company" means a body incorporated under the law of a member State;
"securities" includes shares.

140B Section 140A: anti-avoidance

(1) Section 140A shall not apply unless the transfer of the trade or part is effected for bona fide commercial reasons and does not form part of a scheme or arrangements of which the main purpose, or one of the main purposes, is avoidance of liability to income tax, corporation tax or capital gains tax.

(2) Subsection (1) above shall not apply where, before the transfer, the Board have on the application of company A and company B notified those companies that the Board are satisfied that the transfer will be effected for bona fide commercial reasons and will not form part of any such scheme or arrangements as are mentioned in that subsection.

(3) Subsections (2) to (5) of section 138 shall have effect in relation to subsection (2) above as they have effect in relation to subsection (1) of that section. "

45 Transfer of a non-UK trade: amendment of 1992 Act

The [1992 c. 12.] Taxation of Chargeable Gains Act 1992 shall have effect, and be deemed always to have had effect, with the insertion of the following sections after section 140B--

" 140C Transfer of a non-UK trade

(1) This section applies where--

(a) a qualifying company resident in the United Kingdom (company A)

transfers to a qualifying company resident in another member State (company B) the whole or part of a trade which, immediately before the time of the transfer, company A carried on in a member State other than the United Kingdom through a branch or agency,

(b) the transfer includes the whole of the assets of company A used for the purposes of the trade or part (or the whole of those assets other than cash),

(d) the aggregate of the chargeable gains accruing to company A on the transfer exceeds the aggregate of the allowable losses so accruing,

(e) a claim is made under this section by company A, and

(f) section 140D does not prevent this section applying.

(2) In a case where this section applies, this Act shall have effect in accordance with subsection (3) below.

(3) The allowable losses accruing to company A on the transfer shall be set off against the chargeable gains so accruing and the transfer shall be treated as giving rise to a single chargeable gain equal to the aggregate of those gains after deducting the aggregate of those losses.

(4) No claim may be made under this section as regards a transfer in relation to which a claim is made under section 140.

(5) In a case where this section applies, section 815A of the Taxes Act shall also apply.

(6) For the purposes of subsection (1)(a) above--

(a) a company shall not be regarded as resident in the United Kingdom if it falls to be regarded for the purposes of any double taxation relief arrangements to which the United Kingdom is a party as resident in a territory which is not within any of the member States;

(b) a company shall be regarded as resident in another member State if it is within a charge to tax under the law of the State because it is regarded as resident for the purposes of the charge.

(7) For the purposes of subsection (6)(b) above, a company shall be treated as not within a charge to tax under the law of a member State if it falls to be regarded for the purposes of any double taxation relief arrangements to which the State is a party as resident in a territory which is not within any of the member States.

(8) Section 442(3) of the Taxes Act (overseas business of UK insurance companies) shall be ignored in arriving at the chargeable gains accruing to company A on the transfer, and the allowable losses so accruing, for the purposes of subsections (1)(d) and (3) above.

(9) In this section--

"qualifying company" means a body incorporated under the law of a member State;
"securities" includes shares.

140D Section 140C: anti-avoidance

(1) Section 140C shall not apply unless the transfer of the trade or part is effected for bona fide commercial reasons and does not form part of a scheme or arrangements of which the main purpose, or one of the main purposes, is avoidance of liability to income tax, corporation tax or capital gains tax.

(2) Subsection (1) above shall not apply where, before the transfer, the Board have on the application of company A notified that company that the Board are satisfied that the transfer will be effected for bona fide commercial reasons and will not form part of any such scheme or arrangements as are mentioned in that subsection.

(3) Subsections (2) to (5) of section 138 shall have effect in relation to subsection (2) above as they have effect in relation to subsection (1) of that section. "

46 Transfer of a trade: supplementary (1)

(1) The [1992 c. 12.] Taxation of Chargeable Gains Act 1992 shall have effect, and be deemed always to have had effect, with the following amendments.

(2) In section 35(3)(d)(i) (re-basing) after "139," there shall be inserted "140A,".

(3) In section 116(11) (qualifying corporate bonds) after "139," there shall be inserted "140A,".

(4) In section 140 (transfer of assets to non-resident company) the following subsection shall be inserted after subsection (6)--

" (6A) No claim may be made under this section as regards a transfer in relation to which a claim is made under section 140C. "

(5) In section 174 (disposal or acquisition outside a group)--

(a) in subsection (2) after the word "section" (in the first place where it occurs) there shall be inserted "140A,";

(b) in subsection (3) after "section" there shall be inserted "140A,".

(6) In section 177(2) (dividend stripping) after "which section" there shall be inserted "140A,".

(7) In section 184(2) (indexation)--

(a) after the word "section" (in the first place where it occurs) there shall be inserted "140A,";

(b) for "either" there shall be substituted "one".

47 Transfer of a UK trade: amendment of 1970 Act

Subject to the repeals made by the [1992 c. 12.] Taxation of Chargeable Gains Act 1992, in relation to transfers taking effect on or after 1st January 1992 the [1970 c. 10.] Income and Corporation Taxes Act 1970 shall have effect, and be deemed to have had effect, with the insertion of the following after section 269--

" Transfers concerning companies of different member States

269A Transfer of a UK trade

(1) This section applies where--

(a) a qualifying company resident in one member State (company A)

transfers the whole or part of a trade carried on by it in the United Kingdom to a qualifying company resident in another member State (company B),

(b) the transfer is wholly in exchange for securities issued by company B to company A,

(d) section 269B below does not prevent this section applying, and

(e) the appropriate condition is met in relation to company B immediately after the time of the transfer.

(4) Where this section applies--

(b) section 127(3) of the [1989 c. 26.] Finance Act 1989 (deemed disposal at market value) shall not apply to any such assets by reason of the transfer (if it would apply apart from this paragraph).

(7) In this section--

"qualifying company" means a body incorporated under the law of a member State;
"securities" includes shares.

269B Section 269A: anti-avoidance

(1) Section 269A above shall not apply unless the transfer of the trade or part is effected for bona fide commercial reasons and does not form part of a scheme or arrangements of which the main purpose, or one of the main purposes, is avoidance of liability to income tax, corporation tax or capital gains tax.

(3) Subsections (2) to (5) of section 88 of the [1979 c. 14.] Capital Gains Tax Act 1979 shall have effect in relation to subsection (2) above as they have effect in relation to subsection (1) of that section. "

48 Transfer of a non-UK trade: amendment of 1970 Act

Subject to the repeals made by the [1992 c. 12.] Taxation [1970 c. 10.] of Chargeable Gains Act 1992, in relation to transfers taking effect on or after 1st January 1992 the Income and Corporation Taxes Act 1970 shall have effect, and be deemed to have had effect, with the insertion of the following sections after section 269B--

" 269C Transfer of a non-UK trade

(1) This section applies where--

(a) a qualifying company resident in the United Kingdom (company A)

(b) the transfer includes the whole of the assets of company A used for the purposes of the trade or part (or the whole of those assets other than cash),

(d) the aggregate of the chargeable gains accruing to company A on the transfer exceeds the aggregate of the allowable losses so accruing,

(e) a claim is made under this section by company A, and

(f) section 269D below does not prevent this section applying.

(2) The [1979 c. 14.] Capital Gains Tax Act 1979 shall have effect in accordance with subsection (3) below.

(4) No claim may be made under this section as regards a transfer in relation to which a claim is made under section 268A above.

(5) In a case where this section applies, section 815A of the Taxes Act 1988 shall also apply.

(6) For the purposes of subsection (1)(a) above--

(b) a company shall be regarded as resident in another member State if it is within a charge to tax under the law of the State because it is regarded as resident for the purposes of the charge.

(8) Section 442(3) of the Taxes Act 1988 (overseas business of UK insurance companies) shall be ignored in arriving at the chargeable gains accruing to company A on the transfer, and the allowable losses so accruing, for the purposes of subsections (1)(d) and (3) above.

(9) In this section--

"qualifying company" means a body incorporated under the law of a member State;
"securities" includes shares.

269D Section 269C: anti-avoidance

(1) Section 269C above shall not apply unless the transfer of the trade or part is effected for bona fide commercial reasons and does not form part of a scheme or arrangements of which the main purpose, or one of the main purposes, is avoidance of liability to income tax, corporation tax or capital gains tax.

49 Transfer of a trade: supplementary (2)

(1) Subject to the repeals made by the [1992 c. 12.] Taxation of Chargeable Gains Act 1992, the enactments mentioned in this section shall be amended as there mentioned.

(2) In section 268A of the [1970 c. 10.] Income and Corporation Taxes Act 1970 (transfer of assets to non-resident company) the following subsection shall be inserted after subsection (6)--

" (6A) No claim may be made under this section as regards a transfer in relation to which a claim is made under section 269C below. "

(3) In section 275 of that Act (disposal or acquisition outside a group)--

(a) in subsection (1A) after the word "section" (in the first place where it occurs) there shall be inserted "269A,";

(b) in subsection (1B) after "section" there shall be inserted "269A,".

(4) In section 281(2) of that Act (dividend stripping) after "which section" there shall be inserted "269A,".

(5) In paragraph 10(2) of Schedule 13 to the [1984 c. 43.] Finance Act 1984 (qualifying corporate bonds) after paragraph (bb) there shall be inserted--

" (bc) section 269A of the Taxes Act (transfer of United Kingdom trade between companies of different member States); or " .

(6) In section 68(7A)(b) of the [1985 c. 54.] Finance Act 1985 (indexation) after "267," there shall be inserted "269A,".

(7) In paragraph 1(3)(b) of Schedule 8 to the [1988 c. 39.] Finance Act 1988 (re-basing) after "267," there shall be inserted "269A,".

(8) In paragraph 5 of Schedule 11 to that Act (indexation)--

(a) after "section" there shall be inserted "269A,";

(b) the word "intra-group" shall be omitted;

(9) Subsections (3) and (4) above apply where the transfer referred to in section 269A takes effect on or after 1st January 1992.

(10) Subsections (5) to (7) above apply to any disposal by way of transfer where the transfer takes effect on or after 1st January 1992.

(11) Subsection (8) above applies where any disposal to which section 269A applies is by way of a transfer taking effect on or after 1st January 1992.

Double taxation relief

50 Transfer of a non-UK trade

The following section shall be inserted after section 815 of the Taxes Act 1988--

" 815A Transfer of a non-UK trade

(1) This section applies where section 269C of the 1970 Act or section 140C of the [1992 c. 12.] Taxation of Chargeable Gains Act 1992 applies; and references in this section to company A, the transfer and the trade shall be construed accordingly.

(2) Where company A produces to the inspector an appropriate certificate given by the tax authorities of the relevant member State, this Part, including any arrangements having effect by virtue of section 788, shall apply as if the amount stated in the certificate in accordance with subsection (4)(b) below were tax payable under the law of the relevant member State.

(3) In any case where--

(a) company A is unable to obtain an appropriate certificate from the tax authorities of the relevant member State,

(b) the Board is satisfied that this is the case, and

(c) company A makes a claim to the Board under this subsection and provides the Board with such information and documents in connection with the claim as the Board may require,

the Board shall determine the amount which in their opinion is the amount of tax computed on the required basis which would have been payable under the law of the relevant member State in respect of the gains accruing to company A on the transfer but for the Mergers Directive; and this Part, including any arrangements having effect by virtue of section 788, shall apply as if the amount so determined were tax payable under the law of the relevant member State.

(4) For the purposes of this section, an appropriate certificate is one containing--

(a) a statement to the effect that gains accruing to company A on the transfer would have been chargeable to tax under the law of the relevant member State but for the Mergers Directive;

(b) a statement of the amount of tax which would have been payable under that law in respect of the gains so accruing but for that Directive; and

(5) For the purposes of this section, the required basis is that--

(a) so far as permitted under the law of the relevant member State, any losses arising on the transfer are set against any gains so arising, and

(b) any relief available to company A under that law has been duly claimed.

(6) In this section--

"the Mergers Directive" means the [O.J. No. L225/1.] Directive of the Council of the European Communities dated 23rd July 1990 on the common system of taxation applicable to mergers, divisions, transfers of assets and exchanges of shares concerning companies of different member States (no. 90/434/EEC);
"relevant member State" means the member State in which, immediately before the time of the transfer, company A carried on the trade through a branch or agency. "

51 The Arbitration Convention

(1) The following section shall be inserted after section 815A of the Taxes Act 1988--

" 815B The Arbitration Convention

(1) Subsection (2) below applies if the Arbitration Convention requires the Board to give effect to--

(a) an agreement or decision, made under the Convention by the Board (or their authorised representative) and any other competent authority, on the elimination of double taxation, or

(b) an opinion, delivered by an advisory commission set up under the Convention, on the elimination of double taxation.

(2) The Board shall give effect to the agreement, decision or opinion notwithstanding anything in any enactment; and any such adjustment as is appropriate in consequence may be made (whether by way of discharge or repayment of tax, the making of an assessment or otherwise).

(3) Any enactment which limits the time within which claims for relief under any provision of the Tax Acts may be made shall not apply to a claim made in pursuance of an agreement, decision or opinion falling within subsection (1)(a) or (b) above.

(4) In this section "the Arbitration Convention" means the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises, concluded on 23rd July 1990 by the parties to the treaty establishing the European Economic Community (90/436/EEC). "

(2) In section 816 of the Taxes Act 1988 (disclosure of information) the following subsection shall be inserted after subsection (2)--

" (2A) The obligation as to secrecy imposed by any enactment shall not prevent the Board, or any authorised officer of the Board, from disclosing information required to be disclosed under the Arbitration Convention in pursuance of a request made by an advisory commission set up under that Convention; and "the Arbitration Convention" here has the meaning given by section 815B(4). "

(3) The following section shall be inserted after section 182 of the [1989 c. 26.] Finance Act 1989 (disclosure of information)--

" 182A Double taxation: disclosure of information

(1) A person who discloses any information acquired by him in the exercise of his functions as a member of an advisory commission set up under the Arbitration Convention is guilty of an offence.

(2) Subsection (1) above does not apply to any disclosure of information--

(a) with the consent of the person who supplied the information to the commission, or

(b) which has been lawfully made available to the public before the disclosure is made.

(3) It is a defence for a person charged with an offence under this section to prove that at the time of the alleged offence he believed that the information in question had been lawfully made available to the public before the disclosure was made and had no reasonable cause to believe otherwise.

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

(a) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine or both;

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

(5) No prosecution for an offence under this section shall be instituted in England and Wales or in Northern Ireland except--

(a) by the Board, or

(b) by or with the consent of the Director of Public Prosecutions or, in Northern Ireland, the Director of Public Prosecutions for Northern Ireland.

(6) In this section--

"the Arbitration Convention" has the meaning given by section 815B(4) of the Taxes Act 1988;
"the Board" means the Commissioners of Inland Revenue. "

52 Interest

(1) In the Taxes Act 1988 the following section shall be inserted after section 808--

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