UK free legal information and UK free legal articles
 

Finance Act 2005

Home Free legal articles County courts Magistrate courts Crown courts UK parliament Acts
 
 
Free legal articles
Bulk Center
County court list
Combined court list
Magistrate court list
County and Magistrate court list
Crown court list
UK legal Acts
Sources of legal information
UK Acts Categories
Agriculture
Company and partnership
Data Protection
Environment
Finance and Tax
Health and safety
Land and Property
Trade and commerce
Wills and probate
 
Finance Act 2005 List of acts
 Selected UK Acts and Regulations
    Wills and probate
 
Crown Copyright Acknowledged
CONTENTS

Finance Act 2005

2005 CHAPTER 7

Part 1

EXCISE DUTIES

Tobacco products duty

1. Rates of tobacco products duty

Alcoholic liquor duties

2. Rate of duty on beer

3. Rates of duty on wine and made-wine

Hydrocarbon oil etc duties

4. Consolidation of current rates of hydrocarbon oil duties etc.

5. Rates of hydrocarbon oil duties etc. from 1st September 2005

Gaming duty

6. Rates of gaming duty

Vehicle excise duty

7. Rates

PART 2

INCOME TAX, CORPORATION TAX AND CAPITAL GAINS TAX

CHAPTER 1

INCOME TAX, CORPORATION TAX CHARGE AND RATE BANDS

Income tax

8. Charge and rates for 2005-06

9. Personal allowances for those aged 65 or more

Corporation tax

10. Charge and main rate for financial year 2006

11. Small companies' rate and fraction for financial year 2005

12. Corporation tax starting rate and fraction for financial year 2005

13. Non-corporate distribution rate for financial year 2005

Trusts

14. Special trust rates not to apply to first slice of trust income

CHAPTER 2

PERSONAL TAXATION

Taxable benefits

15. Childcare vouchers: exempt amount

16. Extension of exemptions for childcare, workplace parking, cycles etc

17. Transfer of previously loaned computer or cycle etc

18. Extension of outplacement services etc exemption: part-time employees

Armed forces

19. Armed forces pensions and compensation schemes

CHAPTER 3

EMPLOYMENT-RELATED SECURITIES

20. Research institution spin-out companies

21. Research institution spin-out companies: pre-2nd December 2004 cases

22. Capital gains

CHAPTER 4

TRUSTS WITH VUNERABLE BENEFICIARY

Introductory

23. Introduction

24. Entitlement to make claim for special tax treatment

Income tax

25. Qualifying trusts income: special income tax treatment

26. Amount of relief

27. Trustees' liability: TQTI

28. Vulnerable person’s liability: VQTI

29. Part years

Capital gains tax

30. Qualifying trusts gains: special capital gains tax treatment

31. UK resident vulnerable persons: section 77 treatment

32. Non-UK resident vulnerable persons: amount of relief

33. Vulnerable person’s liability: VQTG

Qualifying trusts

34. Disabled persons

35. Relevant minors

36. Parts of assets

Vulnerable persons

37. Vulnerable person election

38. Meaning of “disabled person”

39. Meaning of “relevant minor”

Miscellaneous and supplementary

40. Power to make enquiries

41. Interpretation etc.

42. Application in relation to Scotland

43. Penalties under TMA 1970

44. Consequential amendments

45. Commencement

CHAPTER 5

ALTERNATIVE FINANCE ARRANGEMENTS

Introductory

46. Alternative finance arrangements

Arrangements giving rise to alternative finance return

47. Alternative finance arrangements: alternative finance return

48. Arrangements within section 47: foreign currency and non-residents

Arrangements giving rise to profit share return

49. Alternative finance arrangements: profit share return

Treatment of alternative finance arrangements

50. Treatment of alternative finance arrangements: companies

51. Treatment of alternative finance arrangements: persons other than companies

52. Provision not at arm’s length

53. Treatment of section 47 arrangements: sale and purchase of asset

54. Section 49 arrangements: profit share return not to be treated as distribution

Supplementary

55. Further provisions

56. Application of Chapter

57. Interpretation of Chapter

CHAPTER 6

FILM RELIEF

Tax relief for limited-budget films

58. Relief for production and acquisition expenditure on limited-budget films

Restrictions on relief

59. Restrictions on relief for production and acquisition expenditure

Deferred income agreements

60. Deferred income agreements which exist when relief claimed

61. Meaning of “deferred income agreement in respect of a film”

62. Deferred income agreements entered into after relief claimed

63. Sections 60 to 62: supplementary

64. Transitional provision for years of assessment before the year 2005-06

65. Corresponding provision in ITTOIA 2005

Companies benefited by film relief: exit charges

66. When a chargeable event occurs

67. Consequences of a chargeable event: exit event X or Y

68. Exit event Z: a relevant disposal at an undervalue

69. Consequences of a chargeable event: exit event Z

70. Valuation of the “rights to guaranteed income” and “disposed rights”

71. Meaning of “company” and related terms

CHAPTER 7

AVOIDANCE INVOLVING PARTNERSHIP

Partners: restrictions on relief

72. Removal of restrictions on interest relief

73. Meaning of “contribution to the trade”

Partners: recovery of excess relief

74. Recovery of excess relief given under section 380 or 381 of ICTA

75. Computing the chargeable amount

76. Meaning of “relevant loss”

77. Transitional provision for years of assessment before the year 2005-06

78. Consequential amendments

Partners benefited by film relief

79. Meaning of “capital contribution to the trade”

CHAPTER 8

ACCOUNTING PRACTICE AND RELATED MATTERS

80. Accounting practice and related matters

81. Computation of profits: change of accounting basis

82. Change of accounting practice: deferment of transitional adjustments

83. Application of accounting standards to securitisation companies

84. Taxation of securitisation companies

CHAPTER 9

INTERNATIONAL MATTERS

Double taxation relief: general

85. Dividends by reference to which a deduction is allowed: no underlying tax

Double taxation relief: restrictions

86. Limits on credit: income tax and corporation tax: trading profits

87. Schemes and arrangements designed to increase relief

88. Self-assessment amendments

Controlled foreign companies

89. ADP dividends and double taxation relief

90. Foreign taxation of group as single entity: exclusion of ADP CFCs

Annual payments and double taxation relief

91. Tax avoidance involving annual payments and double taxation relief

CHAPTER 10

MISCELLANEOUS

Capital allowances

92. Capital allowances: renovation of business premises in disadvantaged areas

Tonnage tax

93. Tonnage tax

PART 3

STAMP TAXES

Stamp duty land tax

94. Alternative property finance

Stamp duty land tax and stamp duty

95. Raising of thresholds

96. Removal of disadvantaged areas relief for non-residential property

Stamp duty and stamp duty reserve tax

97. Demutualisation of insurance companies

PART 4

OTHER TAXES

Inheritance tax

98. Rates and rate bands for the next three years

Landfill tax

99. Rate of landfill tax

Lorry road-user charge

100. Lorry road-user charge

PART 5

PENSIONS ETC

101. Pension schemes etc.

102. Pension Protection Fund etc.

PART 6

MISCELLANEOUS

103. Civil partnerships etc

PART 7

SUPPLEMENTARY PROVISIONS

104. Repeals

105. Interpretation

106. Short title

Schedule 1: Non-UK resident vulnerable persons: interpretation

Schedule 2: Alternative finance arrangements: further provisions

Schedule 3: Films: restrictions on relief for production and acquisition expenditure

Part 1: Restrictions on circumstances in which relief may be obtained

Part 2: Restrictions on amount of relief which may be obtained

Part 3: Minor and consequential amendments

Part 4: Interpretation

Schedule 4: Accounting practice and related matters

Part 1: Bad debts and related matters

Part 2: Other provisions connected with accounting practice

Schedule 5: Section 804ZA: prescribed schemes and arrangements

Schedule 6: Capital allowances: renovation of business premises in disadvantaged areas

Part 1: New Part 3A of the Capital Allowances Act 2001

Part 2: Consequential amendments

Schedule 7: Tonnage tax

Part 1: Amendments of Schedule 22 to FA 2000

Part 2: Commencement and transitional provision

Schedule 8: Stamp duty land tax: alternative property finance

Schedule 9: Stamp duty land tax and stamp duty: removal of disadvantaged areas relief for non-residential property

Schedule 10: Pension schemes etc.

Schedule 11: Repeals

Part 1: Excise duties

Part 2: Income tax, corporation tax and capital gains tax

Part 3: Stamp taxes

Part 4: Pensions etc

 

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.

[7th April 2005]

Most 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 to 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:—

Part 1

Excise duties

Tobacco products duty

1 Rates of tobacco products duty

(1) For the Table of rates of duty in Schedule 1 to the Tobacco Products Duty Act 1979 (c. 7) substitute—

Table

1.Cigarettes An amount equal to 22 per cent of the retail price plus £102.39 per thousand cigarettes.
2.Cigars £149.12 per kilogram
3.Hand-rolling tobacco £107.18 per kilogram.
4.Other smoking tobacco and chewing tobacco £65.56 per kilogram.

(2) This section shall be deemed to have come into force at 6 o'clock in the evening of 16th March 2005.

Alcoholic liquor duties

2 Rate of duty on beer

(1) In section 36(1AA)(a) of ALDA 1979 (rate of duty on beer) for “£12.59” substitute “£12.92”.

(2) This section shall be deemed to have come into force at midnight on 20th March 2005.

3 Rates of duty on wine and made-wine

(1) For Part 1 of the Table of rates of duty in Schedule 1 to ALDA 1979 (rates of duty on wine and made-wine) substitute—

Part 1

WINE AND MADE-WINE OF A STRENGTH NOT EXCEEDING 22 PER CENT

Description of wine or made-wine

Rates of duty per hectolitre

£

Wine or made-wine of a strength not exceeding 4 per cent 51.69
Wine or made-wine of a strength exceeding 4 per cent but not
exceeding 5.5 per cent
71.07
Wine or made-wine of a strength exceeding 5.5 per cent but not exceeding 15 per cent and not sparkling 167.72
Sparkling wine or sparkling made-wine of a strength exceeding 5.5 per cent but less than 8.5 per cent
166.70
Sparkling wine or sparkling made-wine of a strength of 8.5 per cent or of a strength exceeding 8.5 per cent but not exceeding 15 per cent 220.54
Wine or made-wine of a strength exceeding 15 per cent but not exceeding 22 per cent 223.62

(2) This section shall be deemed to have come into force at midnight on 20th March 2005.

Hydrocarbon oil etc duties

4 Consolidation of current rates of hydrocarbon oil duties etc.

(1) HODA 1979 is amended as follows.

(2) In subsection (1A) of section 6 (hydrocarbon oil: rates of duty)—

(a) in paragraph (a) (ultra low sulphur petrol), for “£0.4902” substitute “£0.4710”,

(b) in paragraph (aa) (sulphur-free petrol), for “£0.4852” substitute “£0.4710”,

(c) in paragraph (b) (light oil other than ultra low sulphur petrol and sulphur-free petrol), for “£0.5790” substitute “£0.5620”,

(d) in paragraph (c) (ultra low sulphur diesel), for “£0.4902” substitute “£0.4710”,

(e) in paragraph (ca) (sulphur-free diesel), for “£0.4852” substitute “£0.4710”, and

(f) in paragraph (d) (heavy oil other than ultra low sulphur diesel and sulphur-free diesel), for “£0.5487” substitute “£0.5327”.

(3) In subsection (3) of that section (aviation gasoline), for “(1A) above in relation to light oil” substitute “(1A)(b) above”.

(4) In section 6AA(3) (biodiesel), for “£0.2852” substitute “£0.2710”.

(5) In section 6AD(3) (bioethanol), for “£0.2852” substitute “£0.2710”.

(6) In section 8(3) (road fuel gas)—

(a) in paragraph (a) (natural road fuel gas), for “£0.1110” substitute “£0.0900”, and

(b) in paragraph (b) (other road fuel gas), for “£0.1303” substitute “£0.0900”.

(7) In section 11(1) (rebate on heavy oil)—

(a) in paragraph (a) (fuel oil), for “£0.0624” substitute “£0.0482”,

(b) in paragraph (b) (gas oil which is not ultra low sulphur diesel), for “£0.0664” substitute “£0.0522”, and

(c) in paragraph (ba) (ultra low sulphur diesel), for “£0.0664” substitute “£0.0522”.

(8) In section 13AA(1) (restrictions on use of rebated kerosene), for “for rebated gas oil which is then in force, instead of at the rate then in force under section 11(1)(c) above” substitute “then in force under paragraph (b) of subsection (1) of section 11, instead of at the rate then in force under paragraph (c) of that subsection”.

(9) In section 13A(1) (rebate on unleaded petrol), for “£0.0620” substitute “£0.0601”.

(10) In section 14(1) (rebate on light oil for use as furnace oil), for “£0.0624” substitute “£0.0482”.

(11) In consequence of the preceding provisions the following instruments are revoked—

(a) the Excise Duties (Surcharges or Rebates) (Hydrocarbon Oils etc.) Order 2004 (S.I. 2004/2063),

(b) the Excise Duties (Road Fuel Gas) (Reliefs) Regulations 2004 (S.I. 2004/2069),

(c) the Excise Duties (Surcharges or Rebates) (Hydrocarbon Oils etc.) (Amendment) Order 2004 (S.I. 2004/3160), and

(d) the Excise Duties (Surcharges or Rebates) (Bioethanol) Order 2004 (S.I. 2004/3162).

(12) This section comes into force on the day on which this Act is passed.

5 Rates of hydrocarbon oil duties etc. from 1st September 2005

(1) HODA 1979 is amended as follows.

(2) In subsection (1A) of section 6 (hydrocarbon oil: rates of duty)—

(a) in paragraph (a) (ultra low sulphur petrol), for “£0.4710” substitute “£0.4832”,

(b) in paragraph (aa) (sulphur-free petrol), for “£0.4710” substitute “£0.4832”,

(c) in paragraph (b) (light oil other than ultra low sulphur petrol and sulphur-free petrol), for “£0.5620” substitute “£0.5766”,

(d) in paragraph (c) (ultra low sulphur diesel), for “£0.4710” substitute “£0.4832”,

(e) in paragraph (ca) (sulphur-free diesel), for “£0.4710” substitute “£0.4832”, and

(f) in paragraph (d) (heavy oil other than ultra low sulphur diesel and sulphur-free diesel), for “£0.5327” substitute “£0.5465”.

(3) In section 6AA(3) (biodiesel), for “£0.2710” substitute “£0.2832”.

(4) In section 6AD(3) (bioethanol), for “£0.2710” substitute “£0.2832”.

(5) In section 8(3) (road fuel gas)—

(a) in paragraph (a) (natural road fuel gas), for “£0.0900” substitute “£0.1080”, and

(b) in paragraph (b) (other road fuel gas), for “£0.0900” substitute “£0.1270”.

(6) In section 11(1) (rebate on heavy oil)—

(a) in paragraph (a) (fuel oil), for “£0.0482” substitute “£0.0604”,

(b) in paragraph (b) (gas oil which is not ultra low sulphur diesel), for “£0.0522” substitute “£0.0644”, and

(c) in paragraph (ba) (ultra low sulphur diesel), for “£0.0522” substitute “£0.0644”.

(7) In section 13A(1) (rebate on unleaded petrol), for “£0.0601” substitute “£0.0617”.

(8) In section 14(1) (rebate on light oil for use as furnace oil), for “£0.0482” substitute “£0.0604”.

(9) This section comes into force on 1st September 2005.

Gaming duty

6 Rates of gaming duty

(1) For the Table in section 11(2) of FA 1997 (rates of gaming duty) substitute—

Table

Part of gross gaming yield Rate
The first £534,500 2.5 per cent.
The next £1,186,500 12.5 per cent.
The next £1,186,500 20 per cent.
The next £2,078,000 30 per cent.
The remainder 40 per cent.

 

(2) This section has effect in relation to accounting periods beginning on or after 1st April 2005.

Vehicle excise duty

7 Rates

(1) VERA 1994 is amended as follows.

(2) In section 4 (vehicle licences: amount of duty), omit—

(a) subsection (3) (treatment of fractions of five pence in determining rate of duty on six month licence which is set at 55% of annual rate), and

(b) in subsection (7) (power to amend or repeal by order), “or (3)”.

(3) In section 13(3)(b) (trade licences: annual rate of duty for licences not to be used only for motorcycles not exceeding 450 kilograms in weight unladen) as currently in force, for “annual rate currently applicable to a vehicle under paragraph 1(2) of Schedule 1” substitute “basic goods vehicle rate currently applicable”.

(4) In section 13(4)(b) (trade licences: annual rate of duty for licences not to be used only for motorcycles not exceeding 450 kilogrammes in weight unladen) as set out in paragraph 8(1) of Schedule 4 to have effect on and after a day appointed by order, for “annual rate currently applicable to a vehicle under paragraph 1(2) of Schedule 1” substitute “basic goods vehicle rate currently applicable”.

(5) In both versions of section 13, after subsection (6) insert—

“(7) In this section “the basic goods vehicle rate” means the annual rate applicable, by virtue of sub-paragraph (1) of paragraph 9 of Schedule 1, to a rigid goods vehicle which—

(a) is not a vehicle with respect to which the reduced pollution requirements are satisfied, and

(b) falls within column (3) of the table in that sub-paragraph and has a revenue weight exceeding 3,500 kilograms and not exceeding 7,500 kilograms.”

(6) In sections 35A(5) and 36(3) (dishonoured cheques: appropriate annual rate of vehicle excise duty), for the words from “to the annual rate” to “(or” substitute—

“(a) in the case of a vehicle licence, to the annual rate which at the beginning of the relevant period was applicable to a vehicle of the description specified in the application, or

(b) in the case of a trade licence, to the basic goods vehicle rate (within the meaning of section 13) which was applicable at that time (or to the annual rate which at that time was applicable”.

(7) Schedule 1 (annual rates of duty) is amended as follows.

(8) In paragraph 1(2) (general rate of duty except in case of vehicle with engine with cylinder capacity not exceeding 1,549 cubic centimetres), for “£165” substitute “£170”.

(9) For the Table in paragraph 1B (rates of duty applicable to light passenger vehicles registered on or after 1st March 2001 on basis of certificate specifying CO2 emissions figure) substitute—

CO2 emissions figure       Rate  
(1) (2)
(3) (4)   (5)
Exceeding Not exceeding Reduced rate Standard rate   Premium rate
g/km g/km £ £
£
100 55 65   75
100 120 65 75   85
120 150 95 105   115
150 165 115 125   135
165 185 140 150   160
185 - 160 165   170

(10) In paragraph 3(1A) (rate applicable to buses with respect to which reduced pollution requirements are satisfied), for “the general rate specified in paragraph 1(2)” substitute “£165”.

(11) In paragraph 7(3A)(b) (rate applicable to haulage vehicles which are not showman’s vehicles and with respect to which reduced pollution requirements are satisfied), for “the general rate specified in paragraph 1(2)” substitute “£165”.

(12) In paragraph 10 (trailer supplement)—

(a) in sub-paragraph (2) (rate where plated gross weight of trailer exceeds 4,000 kilograms but does not exceed 12,000 kilograms), for “an amount equal to the amount of the general rate specified in paragraph 1(2)” substitute “£165”,

(b) in sub-paragraph (3) (rate where plated gross weight of trailer exceeds 12,000 kilograms), for “an amount equal to 140 per cent of the amount of the general rate specified in paragraph 1(2)” substitute “£230”, and

(c) omit sub-paragraphs (3A) and (3B) (rounding of rate set under sub-paragraph (3) as percentage of general rate specified in paragraph 1(2)).

(13) Subsection (2), and subsection (1) so far as relating to it, have effect on the day on which this Act is passed.

(14) Subsection (4), and subsections (1) and (5) so far as relating to it, have effect on and after that day.

(15) Subsection (6), and subsection (1) so far as relating to it, have effect on and after 17th March 2005.

(16) Subject to that, this section has effect in relation to licences taken out on or after 17th March 2005 for a period beginning on or after 1st April 2005.

 
See more for Finance Act 2005
 
Crown Copyright Acknowledged
 
 

Web Developers
Copyright © 2017 Agreement Desk. All right reserved