Finance Bill

House of Commons

Session 2006 - 07
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Finance Bill

Finance Bill
Schedule 21 — Exemptions from stamp duty and SDRT: intermediaries, repurchases etc
245


has the same meaning in section 88A above as it has for the purposes
of the Directive.”
      (4)
After subsection (3) insert—
“(3A)
The Treasury may by regulations amend section 88A above and this
section (as they have effect for the time being) in order to extend the
5
exemption from tax under that section.”
      (5)
In subsection (5) (power for regulations to provide for SDRT to be
chargeable at a rate not exceeding 0.1%), for “subsection (1) or (2)” substitute
“any of subsections (1) to (2C)”.
      (6)
In subsection (7) (regulations exercisable by statutory instrument and
10
subject to annulment), for “(4)” substitute “(3A)”.
      (7)
The amendments made by this paragraph have effect in relation to any
agreement to transfer securities—
(a)
in a case where the agreement is conditional, if the condition is
satisfied on or after 1st November 2007, and
15
(b)
in any other case, if the agreement is made on or after that date.
Repurchases and stock lending
5     (1)
Section 80C of FA 1986 (exemption from stamp duty: repurchases and stock
lending) is amended as follows.
      (2)
In subsection (1) (application of section), after “conditions set out in
20
subsection” insert “(2A) or”.
      (3)
After subsection (2) insert—
“(2A)
The conditions in this subsection are—
(a)
that A or B is authorised under the law of an EEA State to
provide any of the investment services or activities listed in
25
Section A 2 or 3 of Annex I to the Directive (execution of
orders on behalf of clients and dealing on own account) in
relation to stock of the kind concerned, whether or not A or B
is authorised under the Directive; and
(b)
that stock of the kind concerned is regularly traded on a
30
regulated market.”
      (4)
In subsection (3) (conditions for exemption)—
(a)
after “The conditions” insert “in this subsection”,
(b)
for “an EEA exchange” substitute “a regulated market, a multilateral
trading facility”, and
35
(c)
after “on that” insert “market, facility or”.
      (5)
In subsection (6) (meaning of arrangement being on an exchange)—
(a)
after “effected on” insert “a market, a facility or”, and
(b)
for “the exchange” (in each place) substitute “the market, facility or
exchange”.
40
      (6)
In subsection (7)—
(a)
after “In this section—” insert—
““the Directive” has the meaning given in section 80B(2)
above;

Finance Bill
Schedule 21 — Exemptions from stamp duty and SDRT: intermediaries, repurchases etc
246

“EEA State” has the meaning given in section 80B(2)
above;”, and
(b)
omit the definition of “EEA exchange” (together with the “and” at the
end of it).
      (7)
After that subsection insert—
5
“(7A)
Each of the following expressions—
“multilateral trading facility”, and
“regulated market”,

has the same meaning in this section as it has for the purposes of the
Directive.”
10
      (8)
The amendments made by this paragraph have effect in relation to any
instrument executed on or after 1st November 2007.
6     (1)
Section 89AA of FA 1986 (exemption from SDRT: repurchases and stock
lending) is amended as follows.
      (2)
In subsection (1) (application of section), after “conditions set out in
15
subsection” insert “(2A) or”.
      (3)
After subsection (2) insert—
“(2A)
The conditions in this subsection are—
(a)
that P or Q is authorised under the law of an EEA State to
provide any of the investment services or activities listed in
20
Section A 2 or 3 of Annex I to the Directive (execution of
orders on behalf of clients and dealing on own account) in
relation to securities of the kind concerned, whether or not P
or Q is authorised under the Directive; and
(b)
that securities of the kind concerned are regularly traded on
25
a regulated market.”
      (4)
In subsection (3) (conditions for exemption)—
(a)
after “The conditions” insert “in this subsection”,
(b)
for “an EEA exchange” substitute “a regulated market, a multilateral
trading facility”, and
30
(c)
after “on that” insert “market, facility or”.
      (5)
In subsection (5) (meaning of arrangement being on an exchange)—
(a)
after “effected on” insert “a market, a facility or”, and
(b)
for “the exchange” (in each place) substitute “the market, facility or
exchange”.
35
      (6)
In subsection (6)—
(a)
after “In this section—” insert—
““the Directive” has the meaning given in section 88B(2)
above;
“EEA State” has the meaning given in section 88B(2)
40
above;”, and
(b)
omit the definition of “EEA exchange”.
      (7)
After that subsection insert—
“(6A)
Each of the following expressions—

Finance Bill
Schedule 22 — Amendments and repeals consequential on extension of HMRC powers
Part 2 — Repeals
247

“multilateral trading facility”, and
“regulated market”,

has the same meaning in this section as it has for the purposes of the
Directive.”
      (8)
The amendments made by this paragraph have effect in relation to any
5
agreement to transfer securities—
(a)
in a case where the agreement is conditional, if the condition is
satisfied on or after 1st November 2007, and
(b)
in any other case, if the agreement is made on or after that date.
Exemptions from stamp duty and SDRT in cases involving recognised investment exchanges
10
7     (1)
In section 116 of FA 1991 (stamp duty: investment exchanges and clearing
houses), subsection (4) is amended as follows.
      (2)
After “In this section—” insert—
“(aa)
“the Directive” means Directive 2004/39/EC of the European
Parliament and of the Council of 21 April 2004 on markets in
15
financial instruments, as amended from time to time,”.
      (3)
In paragraph (b) (definition of “recognised investment exchange”), after
“2000” insert “, a regulated market within the meaning of the Directive or a
multilateral trading facility within the meaning of the Directive”.
Consequential repeal
20
8     (1)
In F(No.2)A 2005, omit section 50 (power to extend stamp duty and SDRT
exemptions to recognised exchanges).
      (2)
This paragraph comes into force on 1st November 2007.
Schedule 22
Section 83

Amendments and repeals consequential on extension of HMRC powers
25
Part 1
Amendments
1
In section 20D(1) of TMA 1970, for “sections 20A, 20BA and 20C” substitute
“sections 20A and 20BA”.
2
In section 67 of the Criminal Justice and Police Act 2001 (c. 16) and the
30
heading of that section, for “customs officers” substitute “officers of Revenue
and Customs”.
Part 2
Repeals
3
The provisions listed below are omitted.
35
4
In TMA 1970—

Finance Bill
Schedule 22 — Amendments and repeals consequential on extension of HMRC powers
Part 2 — Repeals
248

(a)
sections 20C and 20CC (search warrants), and
(b)
in the definition of “tax” in section 118 the word “, 20C”.
5
In CEMA 1979—
(a)
section 118C(3)(c) (gaming duty), and
(b)
the references to “a gaming duty offence” in section 118C(4)(b) and
5
(5).
6
In BGDA 1981—
(a)
paragraph 16 of Schedule 1 (general betting duty: search warrants),
(b)
paragraph 17 of Schedule 3 (bingo duty: search warrants), and
(c)
paragraph 17 of Schedule 4 (amusement machine licence duty:
10
search warrants).
7
Section 148(4) of FA 1989 (definition of “business” for purposes of section
20C of TMA 1970).
8
In VATA 1994—
(a)
section 72(9) (powers of arrest), and
15
(b)
paragraph 10(3) to (6) of Schedule 11 (search warrants).
9
In Schedule 7 to FA 1994 (insurance premium tax)—
(a)
paragraph 4(2) to (5) (search warrants), and
(b)
paragraph 4(6) and (7) (power of arrest).
10
In Schedule 5 to FA 1996 (landfill tax)—
20
(a)
paragraph 5 (search warrants), and
(b)
paragraph 6 (power of arrest).
11
In Schedule 6 to FA 2000 (climate change levy)—
(a)
paragraph 97 (power of arrest), and
(b)
paragraph 130 (search warrants).
25
12
In FA 2001 (aggregates levy)—
(a)
paragraph 6 of Schedule 6 (power of arrest), and
(b)
paragraph 7 of Schedule 7 (search warrants).
13    (1)
In the Criminal Justice and Police Act 2001 (c. 16)—
(a)
section 57(1)(c) (section 20CC of TMA 1970),
30
(b)
section 63(2)(e) (section 20C of TMA 1970), and
(c)
section 65(3) (section 20C of TMA 1970).
      (2)
In Schedule 1 to that Act—
(a)
paragraph 13 (section 20C of TMA 1970),
(b)
paragraph 28 (paragraph 17(2) of Schedule 3 to BGDA 1981),
35
(c)
paragraph 29 (paragraph 17(2) of Schedule 4 to BDGA 1981),
(d)
paragraph 57 (paragraph 4(3) of Schedule 7 to FA 1994),
(e)
paragraph 58 (paragraph 10(3) of Schedule 11 to VATA 1994),
(f)
paragraph 61 (paragraph 5(2) of Schedule 5 to FA 1996), and
(g)
paragraph 72 (paragraph 130(2) of Schedule 6 to FA 2000).
40
14
Section 36(2) and (3) of the Tax Credits Act 2002 (c. 21) (search warrants).
15
Section 323(3)(e) and (f) of the Proceeds of Crime Act 2002 (c. 29) (approval
of applications under section 20C of TMA 1970).

Finance Bill
Schedule 23 — Extension of HMRC powers: Scotland
249

16
Part 7 of Schedule 13 to FA 2003 (stamp duty land tax: search warrants).
17
In CRCA 2005—
(a)
section 13(3)(b) and (c) (Commissioners’ functions not delegable to
officers), and
(b)
section 14(2)(b) and (c) (non-delegable functions of Commissioners).
5
Schedule 23
Section 84

Extension of HMRC powers: Scotland
Criminal Law (Consolidation) (Scotland) Act 1995 (c. 39)
1
Part 3 of the Criminal Law (Consolidation) (Scotland) Act 1995 is amended
as follows.
10
2
The heading to that Part becomes “Investigation of Revenue and
Customs offences”.
3
At the beginning of that Part insert—
“Investigation of offences by HMRC
23A
Investigation of offences by Her Majesty’s Revenue and Customs
15
(1)
This Part of this Act applies to the investigation of Revenue and
Customs offences.
(2)
Subject to subsection (3) below, in this Part of this Act, a “Revenue
and Customs offence” is an offence which relates to a matter in
relation to which Her Majesty’s Revenue and Customs have
20
functions other than any matter specified in—
(a)
section 54(4)(b) or (f) of; or
(b)
paragraphs 3, 7, 10, 13 to 15, 19 or 24 to 29 of Schedule 1 to,

the Commissioners for Revenue and Customs Act 2005 (former
Inland Revenue matters).
25
(3)
In sections 23B to 23P and 26A of this Act, any reference to a
“Revenue and Customs offence” shall be construed as if, in
subsection (2) above, there were added at the end the words “and
other than any matter relating to the movement of goods which is
subject to any prohibition or restriction for the time being in force
30
under or by virtue of any enactment”.
Production orders
23B
Production orders
(1)
The sheriff may, if satisfied on information on oath given by an
authorised officer as to the matters mentioned in subsection (2)
35
below, make an order under subsection (3) below (in this Part, a
“production order”).
(2)
Those matters are—

Finance Bill
Schedule 23 — Extension of HMRC powers: Scotland
250

(a)
that there are reasonable grounds to suspect that a Revenue
and Customs offence has been or is being committed; and
(b)
that a person (in this Part, a “haver”) specified by the officer
has possession or control of a document which may be
required as evidence for the purposes of any proceedings in
5
respect of such an offence.
(3)
A production order is an order requiring the haver, before the expiry
of the period specified in the order—
(a)
to deliver the document to an officer; or
(b)
to—
10
(i)
give an officer access to the document; and
(ii)
permit the officer to make copies of or remove the
document.
(4)
The period specified in a production order is—
(a)
the period of 10 working days beginning with the day on
15
which the order is made; or
(b)
such other period as the sheriff considers appropriate.
(5)
A sheriff may make a production order in relation to a haver residing
or having a place of business in an area of Scotland notwithstanding
that it is outside the area of that sheriff and any such order shall,
20
without being backed or endorsed by another sheriff, have effect
throughout Scotland.
(6)
Subject to section 23J of this Act, a production order has effect in spite
of any restriction on disclosure of information (however imposed).
(7)
Without prejudice to section 23D(1) of this Act, failure by a person to
25
comply with a production order may be dealt with as a contempt of
court.
(8)
In subsection (4)(a) above, “working day” means any day other
than—
(a)
a Saturday;
30
(b)
a Sunday; or
(c)
any day which is a public holiday in the area in which the
production order is to have effect.
23C
Production orders: supplementary
(1)
The sheriff may deal with an application for a production order ex
35
parte in chambers.
(2)
The sheriff may, on the application of a person mentioned in
subsection (3) below—
(a)
vary; or
(b)
discharge,
40

a production order.
(3)
The persons referred to in subsection (2) above are—
(a)
the authorised officer who applied for the production order;
(b)
a person affected by the order.

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Schedule 23 — Extension of HMRC powers: Scotland
251

(4)
Without prejudice to section 305 of the Criminal Procedure
(Scotland) Act 1995, rules of court made by Act of Adjournal may
make provision in relation to—
(a)
proceedings relating to the making of production orders; and
(b)
the variation or discharge of such orders.
5
23D
Offences in relation to production orders
(1)
A person who intentionally—
(a)
falsifies;
(b)
conceals;
(c)
destroys or otherwise disposes of,
10

a document to which this section applies, or who causes or permits
any of those acts, commits an offence.
(2)
This section applies to a document which the person is required,
under a production order, to—
(a)
deliver to an officer; or
15
(b)
give an officer access to.
(3)
A person does not commit an offence if the person acts—
(a)
with the written permission of—
(i)
an officer; or
(ii)
the sheriff who made the order,
20

after the document has been delivered or the officer has had
access to it;
(b)
subject to subsection (4) below, after the expiry of the period
of 2 years beginning with the day on which the order is made.
(4)
Subsection (3)(b) above does not apply where, before the expiry of
25
the period referred to in that paragraph, an officer gives notice in
writing to the person that the order has not been complied with to
that officer’s satisfaction.
(5)
A person who commits an offence under subsection (1) above is
liable—
30
(a)
on summary conviction, to imprisonment for a period not
exceeding 12 months or to a fine not exceeding the statutory
maximum or to both;
(b)
on conviction on indictment, to imprisonment for a period
not exceeding 2 years or to a fine or both.
35
Revenue and Customs warrants
23E
Revenue and Customs warrants
(1)
The sheriff may, if satisfied on information on oath given by an
authorised officer as to the matters mentioned in subsection (2)
below, grant a warrant under subsection (3) below (in this Part, a
40
“Revenue and Customs warrant”).
(2)
Those matters are—
(a)
that there are reasonable grounds to suspect that a Revenue
and Customs offence has been or is being committed; and