Finance Act 1975

JurisdictionUK Non-devolved
Citation1975 c. 7


Finance Act 1975

1975 CHAPTER 7

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.

[13th March 1975]

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 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:—

I Value Added Tax

Part I

Value Added Tax

S-1 VAT: eight per cent. rate.

1 VAT: eight per cent. rate.

(1) In section 9 of the Finance Act 1972 (rate of value added tax)—

(a ) in subsection (1), for the word ‘ten’ there shall be substituted the word ‘eight’; and

(b ) subsection (2) (which is spent) shall be omitted.

(2) The Value Added Tax (Change of Rate) Order 1974 is hereby revoked.

(3) This section shall be deemed to have come into force on 18th November 1974.

S-2 VAT: special rate for light hydrocarbon oil, etc.

2 VAT: special rate for light hydrocarbon oil, etc.

(1) Subject to subsection (2) below, in its application to the supply or importation of any light oil, petrol substitute or power methylated spirits, within the meaning of the Hydrocarbon Oil (Customs & Excise) Act 1971 , section 9 of the Finance Act 1972 of that section or of any order under subsection (3) thereof, there were substituted the rate of 25 per cent.

(2) Nothing in subsection (1) above—

(a ) shall affect the rate of tax chargeable on the supply or importation of light oil in containers not exceeding 20 fluid ounces, where the oil is intended for sale in those containers solely as fuel for mechanical lighters, as defined in section 221(4) of the Customs and Excise Act 1952 ; or

(b ) shall apply to any goods of a description for the time being specified in Schedule 4 to the Finance Act 1972 (zero rating).

S-3 Relief for ‘do-it-yourself’ builders.

3 Relief for ‘do-it-yourself’ builders.

(1) After section 15 of the Finance Act 1972 there shall be inserted the following section—

S-15A

15A ‘Refund of tax to persons constructing newhomes otherwise than in the course of a business.

(1) Subject to the following provisions of this section, where, on or after 13th November 1974, tax becomes chargeable on the supply of goods to, or the importation of goods by, a person constructing a dwelling lawfully and otherwise than in the course of a business carried on by him, and those goods—

(a ) are incorporated in the dwelling or its site, and

(b ) are of such a nature that, if he were a taxable person constructing the dwelling for the purpose of granting a major interest in it, within the meaning of section 5(6) of this Act, he would be entitled to deduct that tax as input tax,

the Commissioners shall, on a claim made by him in that behalf, refund to him the amount of the tax so chargeable.

(2) The Commissioners shall not be required to entertain a claim for a refund of tax under this section unless the claim—

(a ) is made within such time and in such form and manner, and

(b ) contains such information, and

(c ) is accompanied by such documents, whether by way of evidence or otherwise,

as the Commissioners may by regulations prescribe.

(3) In this section—

(a ) references to a dwelling include references to a garage constructed at the same time as the dwelling and intended to be occupied together with it; and

(b ) references to the construction of a dwelling do not include references to the conversion, reconstruction, alteration or enlargement of any existing building or buildings.’

(2) At the end of section 40(1) of the Finance Act 1972 appeals relating to value added tax) there shall be inserted the following paragraph:—

‘(j ), the amount of any refunds under section 15A of this Act’.

S-4 Refund to diplomatic missions, etc., of VAT onimportation of hydrocarbon oil.

4 Refund to diplomatic missions, etc., of VAT onimportation of hydrocarbon oil.

4. At the end of section 17 of the Finance Act 1972 there shall be added the following subsection:—

(5) In the following provisions, that is to say—

(a ) section 8(1) of the Consular Relations Act 1968 ,

(b ) paragraphs 6 and 12 of Schedule 1 to the International Organisations Act 1968 , and

(c ) section 1(1) of the Diplomatic and other Privileges Act 1971 ,

after the words 'customs duty paid on' there shall be inserted the words 'or value added tax paid on the importation of'.’

II Income Tax and Corporation Tax

Part II

Income Tax and Corporation Tax

S-5 Income tax: alteration of additional rates for 1974-75.

5 Income tax: alteration of additional rates for 1974-75.

5. Section 7(1) of the Finance Act 1974(charge of income tax for 1974-75) shall have effect with the substitution for paragraph (b ) of the following provisions, that is to say—

‘(b ) in respect of so much of the investment income included in an individual's total income as exceeds 1,000 at the additional rates of 10 per cent. for the first 1,000 of the excess and 15 per cent. for the remainder;

except that, in the case of an individual who shows that, at any time within that year, his age or that of his wife living with him was sixty-five years or more, income tax at the additional rate of 10 per cent. shall not be charged in respect of the first 500 of the excess mentioned in paragraph (b ) above.’.

S-6 Investment of pension funds in building societies.

6 Investment of pension funds in building societies.

(1) Where sums payable to exempt pension funds are among the sums with respect to which arrangements have been entered into with a building society under section 343 of the Taxes Act, paragraph (b ) of subsection (3) of that section shall not apply to the sums so payable; but the amounts paid or credited in respect of them shall be treated as paid or credited after deduction of income tax from a corresponding gross amount.

(2) In this section ‘building society’ has the same meaning as in section 343 of the Taxes Act and ‘exempt pension fund’ means any fund or scheme in the case of which provision is made by the enactments mentioned in subsection (3) below for exempting the whole or part of its income from income tax.

(3) The enactments referred to in subsection (2) above are sections 208, 211, 212, 213, 214, 216, and 226 of the Taxes Act and section 21(2) of the Finance Act 1970 .

S-7 Early surrender or conversion of life policies.

7 Early surrender or conversion of life policies.

(1) Where a policy of life insurance to which this section applies has been issued and, within four years from the making of the insurance in respect of which it was issued, any of the following events happens, that iS to say—

(a ) the surrender of the whole or part of the rights conferred by the policy;

(b ) the falling due (otherwise than on death) of a sum payable in pursuance of a right conferred by the policy to participate in profits; and

(c ) the conversion of the policy into a paid-up or partly paid-up policy;

the body by whom the policy was issued shall pay to the Board, out of the sums payable by reason of the surrender or, as the case may be, out of the sum falling due or out of the fund available to pay the sums which will be due on death or on the maturity of the policy, a sum determined in accordance with the following provisions of this section, unless the body is wound up and the event is a surrender or conversion effected in connection with the winding-up.

(2) The sum payable under subsection (1) above shall, subject to the following provisions of this section, be equal to the lower of the following, that is to say—

(a ) the appropriate percentage of the premiums payable under the policy up to the happening of the event; and

(b ) the surrender value of the policy at the time of the happening of the event less the complementary percentage of the premiums mentioned in paragraph (a )above.

(3) If the event is one of those mentioned below, the sum payable to the Board shall not exceed the following limit, that is to say,—

(a ) if it is the surrender of part of the rights conferred by the policy, the value of the rights surrendered at the time of the surrender;

(b ) if it is the conversion of the policy into a partly paid-up policy, the surrender value, at the time of the conversion, of so much of the policy as is paid up; and

(c ) if it is the falling due of a sum, that sum.

(4) If the event was preceded by the happening of such an event as is mentioned in subsection (1) above, subsection (2) above shall apply—

(a ) as if the lower of the amounts mentioned therein were reduced by the sum paid under this section in respect of the earlier event; and

(b ) if the earlier event was such an event as is mentioned in paragraph (a ) or (c ) of subsection (3)...

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