Finance Act 1988
Part I Customs and Excise
Duties of excise: rates
1 Beer, wine, made-wine and cider.
2 Tobacco products.
3 Hydrocarbon oil.
4 Vehicles excise duty.
Duties of excise: other provisions
5 Relief from excise duty on goods imported for testing etc.
6 Remission of duty in respect of spirits used for medical or scientific purposes.
7 Meaning of “sparkling” in relation to wine and made-wine.
Management
8 Disclosure of information as to imports.
9 Approval and regulation of warehouses.
10 Power to search persons.
11 Time limits for arrest and proceedings.
12 Punishment of offences.
Part II Value Added Tax
Exemptions
13 Medical services and goods.
Administration
14 Registration.
15 Assessment of tax due.
Civil penalties
16 Serious misdeclaration or neglect resulting in understatements or overclaims.
17 Persistent misdeclaration resulting in understatements or overclaims.
18 Failures to notify and unauthorised issue of invoices.
19 Breaches of regulatory provisions.
Miscellaneous
20 Repayment supplement.
21 Set-off of credits.
22 Invoices provided by recipients of goods or services.
Part III Income Tax, Corporation Tax and Capital Gains Tax
Chapter I General
Tax rates and personal reliefs
23 Charge and basic rate of income tax for 1988-89.
24 Higher and additional rates of income tax.
25 Personal reliefs.
26 Charge and rate of corporation tax for financial year 1988.
27 Corporation tax: small companies.
28 Tax rates and personal reliefs
29 Life assurance premium relief.
30 Tax rates and personal reliefs
31 Non-residents’ personal reliefs.
Married couples
32 Abolition of aggregation of income.
33 Personal allowance and married couple’s allowance.
34 Jointly held property.
35 Minor and consequential provisions.
Annual payments
36 Annual payments.
37 Maintenance payments under existing obligations:
38 Maintenance payments under existing obligations:
39 Maintenance payments under existing obligations: election for new rules.
40 Provisions supplementary to sections 37 to 39.
Relief for interest
41 Qualifying maximum for loans.
42 Home loans: restriction of relief.
43 Home improvement loans.
44 Loans for residence of dependent relative etc.
Benefits in kind
45 Car benefits.
46 Car parking facilities.
47 Entertainment: non-cash vouchers.
48 Entertainment: credit-tokens.
49 Entertainment of directors and higher-paid employees.
Business expansion scheme
50 Private rented housing.
51 Restriction of relief.
52 Valuation of interests in land.
53 Approved investment funds.
Pensions etc.
54 Personal pension schemes: commencement.
55 Personal pension schemes: other amendments.
56 Occupational pension schemes.
57 Lump sum benefits paid otherwise than on retirement.
Underwriters
58 Assessment and collection.
59 Reinsurance: general.
60 Reinsurance to close.
61 Minor and consequential amendments.
Oil licences
62 Disposals of oil licences relating to undeveloped areas.
63 Allowance of certain drilling expenditure etc. in determining chargeable gains.
64 Interpretation of sections 62 and 63.
Miscellaneous
65 Commercial woodlands.
66 Company residence.
66AResidence of SE or SCE
67 Miscellaneous
68 Priority share allocations for employees etc.
69 Share options: loans.
70 Charities: payroll deduction scheme.
71 Unit trusts: relief on certain payments.
72 Entertainment of overseas customers.
73 Consideration for certain restrictive undertakings.
74 Miscellaneous
75 Premiums for leases etc.
76 Miscellaneous
chapter II Unapproved Employee Share Schemes
Preliminary
77 Scope of Chapter.
Charges to tax
78 Charge where restrictions removed etc.
79 Charge for shares in dependent subsidiaries.
80 Charge on special benefits.
Miscellaneous
81 Changes in interest.
82 Company reorganisations etc.
83 Connected persons etc.
84 Capital gains tax.
85 Information.
Supplementary
86 Meaning of “dependent subsidiary”.
87 Other interpretation provisions.
88 Transitional provisions.
89 Consequential amendments.
chapter III Capital Allowances
90. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
91. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
92. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
93. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
94. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
95. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
chapter IV Capital Gains
Re-basing to 1982
96 Assets held on 31st March 1982.
97 Deferred charges on gains before 31st March 1982.
Unification of rates of tax on income and capital gains
98 Rates of capital gains tax.
99 Husband and wife.
100 Accumulation and discretionary settlements.
101 Underwriters.
102 Other special cases.
103 Commencement of sections 98 to 102.
Married couples
104 Married couples.
Company migration
105 Deemed disposal of assets on company ceasing to be resident in U.K.
106 Deemed disposal of assets on company ceasing to be liable to U.K. tax.
107 Postponement of charge on deemed disposal.
Miscellaneous
108 Annual exempt amount for 1988-89.
109 Gains arising from certain settled property.
110 Retirement relief.
111 Dependent relative’s residence.
112 Roll-over relief.
113 Indexation: building societies etc.
114 Indexation: groups and associated companies.
115 Transfers within a group.
116 Personal equity plans.
117 Definition of “investment trust”.
118 Amendments of Finance Act 1985 s.68.
chapter V Management
Assessment
119 Current year assessments.
Returns of income and gains
120 Notice of liability to income tax.
121 Notice of liability to corporation tax.
122 Notice of liability to capital gains tax.
Other returns and information
123 Three year time limit.
124 Returns of fees, commissions etc.
125 Other payments and licences etc.
Production of accounts, books etc.
126 Production of documents relating to a person’s tax liability.
127 Production of computer records etc.
Interest and penalties
128 Interest on overdue or overpaid PAYE.
129 Two or more tax-geared penalties in respect of same tax.
Company migration
130 Provisions for securing payment by company of outstanding tax.
131 Penalties for failure to comply with section 130.
132 Liability of other persons for unpaid tax.
Appeals etc.
133 Jurisdiction of General Commissioners.
134 General Commissioners for Northern Ireland.
135 Cases stated in Northern Ireland.
Part IV Miscellaneous and General
Inheritance tax
136 Reduction of rates.
137 Gifts to political parties.
Petroleum revenue tax
138 Reduced oil allowance for certain Southern Basin and onshore fields.
139Assets generating tariff receipts: extension of allowable expenditure.
Stamp duty and stamp duty reserve tax
140 Abolition of stamp duty under the heading “Unit Trust Instrument”.
141 Abolition of stamp duty on documents relating to transactions of capital companies.
142 Stamp duty: housing action trusts.
143Stamp duty: paired shares
144Stamp duty reserve tax: paired shares etc
Miscellaneous
145 Building societies: change of status.
146 Post-consolidation amendments.
147 Interpretation etc.
148 Repeals.
149 Short title.
SCHEDULES
SCHEDULE 1 Alcoholic Liquor Duties
Part I Table of Rates of Duty on Wine and Made-Wine
Part II Beverages of an Alcoholic Strength not Exceeding 5.5 per cent.
1(1) In subsection (2) of section 1 of the Alcoholic...
2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4After subsection (4) of section 54 of that Act (wine:...
5(1) After subsection (4) of section 55 of that Act...
6After section 55 of that Act there shall be inserted—...
7In section 59 of that Act (rendering imported wine or...
8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9Section 63 of that Act (repayment of duty on imported...
10At the end of subsection (1) of section 71 of...
11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12At the end of subsection (1) of section 73 of...
13In Schedule 1 to that Act, for the Table of...
SCHEDULE 2 Vehicles Excise Duty
Part I
Part II Vehicles Carrying or Drawing Exceptional Loads
1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SCHEDULE 3 Married Couples: Minor and Consequential Provisions
Part I Amendments of the Taxes Act 1988
Introductory
1The Taxes Act 1988 shall have effect subject to the...
Commencement of trade etc.
2In section 62 (special basis for early years following commencement...
Discontinuance of trade etc.
3In section 63 (special basis on discontinuance of trade etc....
Underpayments
4In section 203 ( PAYE ) the following subsection shall...
Additional relief in respect of children
5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Widow’s bereavement allowance
7(1) The section set out in sub-paragraph (2) below shall...
Blind person’s allowance
8For the year 1990-91 and subsequent years of assessment the...
Life assurance premiums
9For the year 1990-91 and subsequent years of assessment section...
Payments securing annuities
10For the year 1990-91 and subsequent years of assessment the...
Married couples living together
11For the year 1990-91 and subsequent years of assessment the...
Business expansion scheme
12(1) For the year 1990-91 and subsequent years of assessment...
Qualifying maintenance payments
13For the year 1990-91 and subsequent years of assessment section...
Home loans
14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans for shares in employee-controlled company
15(1) In section 361 (relief for interest on loans to...
Close company loans
16(1) In section 420(2)(a)(i) (exception from charge in case where...
Trade unions and employers’ associations
17(1) In section 467(2) (tax exemption in respect of income...
Retirement benefit schemes
18(1) In section 590 (conditions for approval of retirement benefit...
Partnership retirement annuities
19For the year 1990-91 and subsequent years of assessment section...
20. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Earned income
21For the year 1990-91 and subsequent years of assessment section...
Total income
22For the year 1990-91 and subsequent years of assessment section...
Part II Other Provisions
Capital allowances
23. . . . . . . . . ....
24. . . . . . . . . ....
The transition
25The operation of section 279(1) of the Taxes Act 1988...
Returns
26Where a man is required under section 8 of the...
27Where a man delivers a return such as is mentioned...
28Where a woman is liable to a penalty under section...
Time limits for assessments
29. . . . . . . . . ....
Transfers of allowances
30For the year 1990-91 and subsequent years of assessment the...
Class 4 social security contributions
31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Annual payments
32Section 36 of this Act shall have effect in relation...
Maintenance payments
33. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SCHEDULE 4
Part I Modifications Made by Section 50
Preliminary
1The modifications of Chapter III of Part VII of the...
The relief
2(1) In subsection (1) of section 289 (relief under the...
Restriction of relief where amounts raised exceed permitted maximum
3(1) In subsection (1) of section 290A (restriction of relief...
Individuals qualifying for relief
4In section 291 (individuals qualifying for relief), after subsection (1)...
Parallel trades
5Section 292 (parallel trades) shall be omitted.
Qualifying companies
6(1) For subsection (2) of section 293 (qualifying companies) there...
Companies with interests in land etc.
7The following shall be omitted, namely— (a) section 294 (companies...
Qualifying trades etc.
8The following shall also be omitted, namely—
Replacement capital
9(1) In subsection (1) of section 302 (replacement capital), for...
Claims
10In subsections (2) and (3) of section 306 (claims), for...
Subsidiaries
11(1) For subsection (1) of section 308 (application to subsidiaries)...
12In subsection (2) of section 309 (further provisions as to...
Part II Dwelling-Houses to Which Section 50 Does Not Apply
Expensive dwelling-houses
13(1) Section 50 of this Act does not apply to...
Unfit and sub-standard dwelling-houses
14Section 50 of this Act does not apply to—
Dwelling-houses already let etc.
15(1) Subject to sub-paragraphs (1A) to (1C) below, section 50...
Dwelling-houses already qualifying for relief
16(1) Section 50 of this Act does not apply to...
Dwelling-houses qualifying for capital allowances
17Section 50 of this Act does not apply to a...
Interpretation of certain expressions: Scotland
18In the application of the above provisions of this Part...
SCHEDULE 5 Underwriters: Assessment and Collection of Tax
Preliminary
1 Underwriters: Assessment and Collection of Tax
Returns by agent
2 Underwriters: Assessment and Collection of Tax
Payments on account of tax
3 Underwriters: Assessment and Collection of Tax
Determinations by inspector
4 Underwriters: Assessment and Collection of Tax
Appeals
5 Underwriters: Assessment and Collection of Tax
Modification of determinations pending appeal
6 Underwriters: Assessment and Collection of Tax
Apportionments of syndicate profit or loss
7 Underwriters: Assessment and Collection of Tax
Individual members: effect of determinations
8 Underwriters: Assessment and Collection of Tax
Assessment of individual members: time limits
9 Underwriters: Assessment and Collection of Tax
Supplemental: penalties
10 Underwriters: Assessment and Collection of Tax
Supplemental: interest
11 Underwriters: Assessment and Collection of Tax
SCHEDULE 6 Commercial Woodlands
Preliminary
1 Commercial Woodlands
Abolition of charge under Schedule B
2 Commercial Woodlands
Abolition of Schedule D election et ceteralaetc.
3 Commercial Woodlands
Transitional provisions
4 Commercial Woodlands
5 Commercial Woodlands
Consequential amendments
6 Commercial Woodlands
SCHEDULE 7 Exceptions to Rule in Section 66(1)
Cases where rule does not apply
1 Exceptions to Rule in Section 66(1)
2 Exceptions to Rule in Section 66(1)
Cases where rule does not apply until end of transitional period
3 Exceptions to Rule in Section 66(1)
4 Exceptions to Rule in Section 66(1)
Supplemental
5 Exceptions to Rule in Section 66(1)
SCHEDULE 8
Previous no gain/no loss disposals
1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital allowances
3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part disposals
4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assets derived from other assets
5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Group transactions
6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Close companies
7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Private residence relief
8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Replacement of business assets
9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Apportionment of pre-1965 gains and losses
10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Indexation allowance
11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Elections under section 96(5): excluded disposals
12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Elections under section 96(5): groups of companies
13. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SCHEDULE 9
Reduction of deduction or gain
1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charges rolled-over or held-over
2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Postponed charges
3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Previous no gain/no loss disposals
4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assets derived from other assets
7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Claims
8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SCHEDULE 10
Charge on settlor with interest in settlement
1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Right of recovery
5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Meaning of “settlor” etc.
6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Information
7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares in non–resident companies
8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maintenance funds for historic buildings
9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commencement
10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SCHEDULE 11
Debts
1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares
3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Linked companies
4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplementary
5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commencement
7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SCHEDULE 12 Building Societies: Change of Status
Introductory
1Paragraphs 3 to 7 below apply where there is a...
Gilt-edged securities and other financial trading stock
2 Building Societies: Change of Status
Capital allowances
3(1) For the purposes of the allowances and charges provided...
Capital gains: assets acquired from society, etc.
4 Building Societies: Change of Status
Capital gains: shares, and rights to shares, in successor company
5 Building Societies: Change of Status
Distributions
6(1) Where, in connection with the transfer, qualifying benefits are...
Certified SAYE savings arrangements
7Section 702 of the Income Tax (Trading and Other Income)...
Stamp duty
8Section 109 of the Building Societies Act 1986 (exemption from...
SCHEDULE 13 Post-Consolidation Amendments
Part I Amendments of the Taxes Act 1988
1The Taxes Act 1988 shall have effect, and shall be...
2In section 61(4) after the word “where” there shall be...
3In section 162(1) after the word “Where” there shall be...
4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5In section 533(4) after “1949” there shall be inserted the...
6In section 591(5) and (6) after the word “made” there...
7In section 824— (a) in subsection (1) the following paragraphs...
8. . . . . . . . . ....
9In paragraph 2 of Schedule 10 after sub-paragraph (c) there...
10In paragraph 17(2)(a) of Schedule 15 after the words “but...
11In paragraph 18(2) of that Schedule for “1 to 9”...
12In paragraph 4(3)(b) of Schedule 27 for “416” there shall...
13In paragraph 8 of Schedule 29 for the words “added...
14In the Table in paragraph 32 of that Schedule the...
15The repeals made in section 47 of the Finance (No....
Part II Amendments of Other Enactments
The Capital Gains Tax Act 1979 (c.14)
16. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Finance Act 1980 (c.48)
19In section 101 of the Finance Act 1980 for the...
20In section 109(8)(b) of that Act for the words “Part...
The Finance Act 1981 (c.35)
21. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Finance Act 1984 (c.43)
22In section 80(5)(b) of the Finance Act 1984 for the...
The Finance Act 1986 (c.41)
23. . . . . . . . . ....
The Finance Act 1987 (c.16)
24The repeals made by the Finance Act 1987 in section...
Commencement
25The amendments made by paragraphs 16 to 23 of this...
SCHEDULE 14 Repeals
Part I Customs and Excise
1The repeal in section 1 of the Alcoholic Liquor Duties...
2The repeals in sections 42 and 43 of that Act...
3The repeals in the Betting and Gaming Duties Act 1981...
Part II Vehicles Excise Duty
Part III Value Added Tax
Part IV Income and Corporation Tax: General
1The repeals in section 482 of the Income and Corporation...
2The repeals in Schedule 10 to the Income and Corporation...
3The repeal in the Finance Act 1980 has effect from...
4The repeals in section 278 of the Income and Corporation...
5The repeal of section 351(1) to (7) of that Act...
6The repeals in sections 355, 357 and 358 of that...
7The repeals in section 577 of that Act have effect...
8The repeals in Schedule 11 to that Act have effect...
9The remaining repeals have effect for the year 1988-89 and...
Part V Commercial Woodlands
1The repeals in the Taxes Management Act 1970, the repeals...
2The repeals of section 111 of the Income and Corporation...
3The remaining repeals have effect from 6th April 1993.
Part VI Unapproved Employee Share Schemes
Part VII Capital Gains: General
1The repeals in the Income and Corporation Taxes Act 1988...
2The remaining repeals have effect in relation to disposals made...
Part VIII Married Couples
1The repeals in section 361 of the Income and Corporation...
2The repeals in sections 382 and 574 of that Act...
3The repeal in section 420(2) of that Act has effect...
4The repeal in section 525 of that Act has effect...
5The repeals in sections 527 and 535 of that Act...
6The remaining repeals have effect for the year 1990-91 and...
Part IX Tax Appeals etc. in Northern Ireland
Part X Inheritance Tax
Part XI Stamp Duty

Finance Act 1988

1988 c. 39

An Act to grant certain duties, to alter other duties, and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with Finance.

I1X1Most Gracious Sovereign,WE, Your Majesty’s most dutiful and loyal subjects, the Commons of the United Kingdom in Parliament assembled, towards raising the necessary supplies to defray Your Majesty’s public expenses, and making an addition to the public revenue, have freely and voluntarily resolved to give and grant unto Your Majesty the several duties hereinafter mentioned; and do therefore most humbly beseech Your Majesty that it may be enacted, and be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

Annotations:
Commencement Information
I1

Act partly in force at Royal Assent, partly retrospective, see individual sections; all provisions so far as unrepealed wholly in force at 1.2.1991. Some provisions came in to force at specific times of the day

Editorial Information
X1

General amendments to Tax Acts, Income Tax Acts, and/or Corporation Tax Acts made by legislation after 1.2.1991 are noted against Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1) but not against each Act