Tax Bulletin Issue 24

There has been increasing interest in the Revenue's views about the tax treatment of payments in lieu of notice ("PILONS"). This article describes our established practice and comments on some current issues.

BACKGROUND

In recent years PILONS have increasingly been included in employees' contractual arrangements. This is because employees have wanted to formalise their employment rights, and also because employers have wanted to retain the effect of restrictive covenants. These covenants might be lost where the terms of a contract of employment are breached on summary dismissal. This process has heightened interest in the taxation treatment of PILONS.

NATURE OF THE PAYMENT

"Payment in lieu of notice" is not a tax term and the expression covers payments made in a wide range of circumstances. Compare, for example, a payment made on a summary dismissal, where contractual arrangements oblige an employer to make a PILON if due notice is not given, with a payment made where the contractual arrangements provide only for notice of termination. In the second situation, the employer breaches the contractual arrangements and a payment made in compensation for that breach is not an emolument from the employment within Section 19 Income and Corporation Taxes Act (ICTA) 1988. But in the first situation, the contract of employment is terminated in accordance with its terms and the payment is an emolument within Section 19 ICTA 1988. Both payments will however be labelled PILONS.

Sometimes a payment is described as "in lieu of notice" where notice is in fact given but not worked -- this is sometimes called gardening leave. In such circumstances the employee is employed until the end of the notice period but is not required to provide services during that period. Gardening leave payments are payments of emoluments from the employment and are taxable as such under Section 19 ICTA 1988.

So establishing the correct section of charge for tax purposes involves an analysis of the specific characteristics of the particular payment. This is followed by appying the principles of taxation appropriate to those characteristics.

Where that process shows that a PILON is an emolument from an office or employment, it is taxable under Section 19 ICTA 1988. Section 148 ICTA 1988 is relevant only where Section 19 ICTA 1988 does not apply.

EMOLUMENTS FROM THE EMPLOYMENT

An emolument is within Section 19 ICTA 1988 if it is an emolument from the employment. The fact that a payment is made under contractual arrangements is not of itself conclusive for taxation purposes in this context. In general, contractual sums are emoluments from employment, but that principle is subject to exceptions (most obviously, for example, pensions).

The Courts have held that certain contractual payments on termination are emoluments from employment and we see contractual PILONS as within that line of cases. But a payment for the loss of some personal right, or for complete abrogation of contractual terms, is not from the employment. In our view contractual PILONS are not of those types.

For tax purposes, emoluments by definition include wages. It has been suggested that, since for some purposes it has been held that a PILON is not wages (whether or not it is paid under contractual arrangements), it cannot be within Section 19 ICTA 1988.

However, what constitutes wages under employment law is not the same as what constitutes emoluments under tax law. The former depends on the provision of services whereas tax case law shows that the latter includes payments which are not strictly a reward for services, for example, compensation paid for the loss of the protection of certain employment law rights.

This point demonstrates that it may be inappropriate to use cases on the construction of one piece of legislation in the construction of the same or similar words in different legislation.

CONTRACTUAL PILONS AND BREACH OF CONTRACT

Where contractual arrangements provide that a PILON is to be paid as an alternative to notice, the contract is terminated in accordance with its terms where there is summary dismissal. Compensation will be a matter of contractual entitlement rather than liquidated damages and the payment is chargeable under Section 19 ICTA 1988.

Some taxpayers have suggested that such a provision for a PILON merely quantifies the sum of damages payable following any failure to give due notice of termination. Employment law in this area indicates that, because the contract itself provides for the PILON, its character is not damages for breach of contract.

Employer and employee may agree at the time of terminating the employment that it is to be terminated without proper notice but on the making of a PILON. Provided that there was no existing understanding in respect of that payment which could be viewed as a contractual provision or amendment, its source lies only in the agreement to terminate the employment. It does not lie in any bargain struck between the parties governing the employment relationship and its termination. The payment is not an emolument from the employment and so it is properly taxed under Section 148 ICTA 1988.

Where contractual arrangements do not provide for a PILON and there is no other agreement of the sort mentioned in the previous paragraph, failure to give due notice is a breach of contract by the employer. A payment made for such a breach represents liquidated damages and is not an emolument from the employment within Section 19 ICTA 1988. As a payment in connection with the termination of the employment, it is chargeable under Section 148 ICTA 1988 subject to the exemptions and reliefs in Section 188 ICTA 1988.

SCOPE OF CONTRACTUAL ARRANGEMENTS

In establishing whether contractual arrangements provide for a PILON, it is necessary to consider all relevant terms and conditions which have governed the employment relationship. For example, rules dealing with PILONS which are expressed only in a Staff Handbook or wage agreement may nonetheless be part of the contractual arrangements. Similarly, where there have been oral agreements about the employment relationship these may also constitute part of the contractual arrangements.

Even where there is no such contractual arrangement, an employer may regularly make a PILON instead of giving whatever notice is due. It is then possible that an implied contractual term of service may come into being, and where it does the payment is also properly regarded as made under contractual arrangements. All the facts of an individual case, including the employee's knowledge of an established practice, would need to be considered in deciding whether this was so.

RESERVED RIGHTS AND DISCRETION

Some contractual arrangements give the employer a reserved right, or discretion -- as opposed to imposing an obligation -- to make a PILON where due notice is not given on termination of employment. Where an employer exercises such a reserved right or discretion, we regard the contract as being terminated in accordance with its terms under the agreed contractual arrangements for the provision of services generally.

The existence of such a reserved right or discretion is not therefore a determining factor for tax purposes, any more than it is where a bonus of remuneration is payable subject to an employer's discretion.

SECTION 49 EMPLOYMENT PROTECTION (CONSOLIDATION) ACT 1978

It has been suggested that Section 49 Employment Protection (Consolidation) Act 1978 may result in a contractual PILON being properly analysed as a payment of damages for breach of contract.

Section 49(1) specifies the minimum statutory notice period to which an employee is entitled. This period, when it exceeds the contractual notice entitlement of the employee, effectively supplants the contractual term.

It has been argued that any provision for a contractual PILON which purports to permit termination on notice shorter than that statutory notice period may then be void. However, the Courts have rejected the contention that failure to give the statutory notice period necessarily constitutes a breach of contract. Section 49(3) expressly allows contracting parties to accept a PILON and in that event the payment is not made in breach of the contractual terms.

PAYMENT CONTEXT

A PILON is often paid in association with other sums of money or benefits when an employment is terminated. What determines its taxation treatment is not the context in which a sum is paid, but the characteristics of the payment. In particular, the fact that a PILON is paid in the context of redundancy does not affect its character and the way in which it is taxed.

We accept that payments for redundancy, within the meaning of Section 81 Employment Protection (Consolidation) Act 1978, fall outside Section 19 ICTA 1988 as a matter of law (see Statement of Practice 1/94). We include "bumped redundancies" as within this statement -- that is, where a reduced need for employees leads to dismissal of employees whose functions are not specifically disappearing.

In our view a PILON is not a payment for redundancy. It does not share the qualities which characterise such a payment, such as, for example, the variation in amount related to service, the concept of compensation for a stake in the employment and the distress element of the employee being out of work in circumstances beyond their control. Such characteristics are special and have their roots in the fact that redundancy is a creation of statute.

Another aspect of the context of a payment is its timing. The fact that a payment is made after termination is simply one factor in considering whether it is from an employment and assessable under Section 19 ICTA 1988. It is not in itself a determining factor.

SUMMARY

The Revenue's approach to PILONS will continue to be based on the principles outlined in this article.

(Superceded by CG 60609 CG 60700-09)
CAPITAL GAINS TAX: ROLL-OVER RELIEF AND SELF ASSESSMENT PROVISIONAL RELIEF

Section 153A Taxation of Chargeable Gains Act (TCGA) 1992, introduced by Section 141 Finance Act (FA) 1996, provides a new mechanism for a person carrying on a trade (including the activities in Section 158 TCGA 1992) to obtain provisional roll-over relief before the acquisition of new assets. A similar provisional relief is available in new Section 247A TCGA 1992 where roll-over relief may be claimed in respect of gains arising on the compulsory purchase of land by a local authority. The new mechanism does not apply to any other relief, for example, reinvestment relief, Enterprise Investment Scheme and Venture Capital Trust deferral reliefs. It applies to individuals who make disposals in 1996-97 or subsequent years; and to companies that make disposals after the appointed day, to be determined by Treasury Order.

For disposals in years up to and including 1995-96, roll-over relief could not be obtained until a replacement asset had been acquired. However, Revenue practice has been to accept postponement of the CGT due if the trader could demonstrate an intention to acquire a qualifying asset shortly after the normal payable date for the tax and within the normal three year time limit.

Without specific legislation, a trader would not be able to take roll-over relief into account for Self Assessment unless a new asset had been acquired or an unconditional contract had been entered into to acquire such an asset by the time the Self Assessment Return was due. It was recognised that this would be harsh as the whole of the consideration received for the old asset must be applied in acquiring the new asset for full roll-over relief to be obtained. The disposal consideration would be reduced if Capital Gains Tax had to be paid before an acquisition took place. Section 153A TCGA 1992 was introduced to overcome this problem. The new section allows a trader who has made a disposal of a qualifying asset to obtain provisional roll-over relief, pending reinvestment, if they declare in their Return an intention to acquire new qualifying assets, within the time limit in Section 152(3) TCGA 1992.

FORM OF DECLARATION

The declaration must identify the old assets that have been disposed of and must specify the amount of the consideration that is to be applied in acquiring new assets. The amount specified can be all or part of the consideration. The Self Assessment can then be made as if there had been an actual acquisition of new assets for the amount specified.

A form on which the declaration can be made is provided in the help sheet on roll-over relief that will be available from April 1997. The declaration may also be made in any other form a person chooses provided that it is attached to the Return and contains the required information.

The specified amount declared in the Return can only be increased by amending the Return. When the period available for amendment has expired the specified amount can only be wholly or partly withdrawn .

DURATION OF PROVISIONAL RELIEF

Where a declaration is made and provisional roll-over relief is obtained in this way, no action will be taken by the Inland Revenue until the earliest of the following events:

Roll-over relief claim

The trader submits a claim to roll-over relief for the same disposal where the cost of acquisition of the new asset is the same as, or greater than, the specified amount. If the claim is valid the relief is confirmed and there is no need for further action. If the cost of the acquisition is less than the specified amount, no action will be considered in relation to the excess until there is a further claim to relief or until the earlier of the following two events.

Provisional relief withdrawn

The trader informs the Inland Revenue that they no longer wish to reinvest as much as the specified amount. The treatment of this withdrawal of provisional relief depends upon whether it is made within the time limit allowed under Section 9 Taxes Management Act (TMA) 1970 (as introduced by Section 179 FA 1994) or Section 28A TMA 1970 (as introduced by Section 188 FA 1994) for a person to notify amendments to their Return. Both Sections apply for years 1996-97 onwards. If the withdrawal is made within the period of possible amendment by the trader, then it is treated as an amendment to the Return with a corresponding amendment to the Self Assessment. If the withdrawal is made within the period of an enquiry into the Return, the Revenue may amend the Self Assessment to recover the relief withdrawn. Alternatively, the trader may pay the capital gains tax due to the Revenue as a result of the withdrawal to limit the interest accruing. If the withdrawal occurs outside these times, then some or all of the relief obtained will be recovered by the Revenue making an assessment. The amount of the assessment will depend on whether the trader still intends to reinvest some of the consideration. No action will be taken about the balance of provisional relief until there is a claim to roll-over relief; a further withdrawal by the trader; or the period of availability of provisional relief ends.

Provisional relief period ends

The period of provisional relief automatically ends on the relevant day. If provisional relief has not been replaced by a claim to roll-over relief, or been withdrawn, the tax due on the gain not covered by roll-over relief will be assessed. The relevant day for individuals is three years from 31 January in the year following the year of assessment in which the disposal was made . For companies the relevant day is four years from the end of the accounting period in which the disposal took place.

DECEASED PERSON

If a trader dies while provisional relief is in place, it will be the personal representatives who should withdraw the declaration. If a declaration is not withdrawn, interest will accrue until the relevant day. The Revenue cannot raise an assessment to recover tax until a declaration is withdrawn or the relevant day arrives.

RECOVERY OF TAX

If the provisional relief has not been replaced by claims to roll-over relief by the relevant day, or is withdrawn before the relevant day, an assessment will be raised for the year of disposal. The assessment will be on the amount of the gain on the original disposal after taking account of any claims to roll-over relief .

The due date for payment of tax for interest purposes will be the date the tax would have been paid if no declaration had been made.

REINVESTMENT TIME LIMIT

If an assessment is raised because the relevant day has passed without a reinvestment taking place, no postponement application on the basis that reinvestment will take place shortly will be accepted. By the relevant day the normal three year reinvestment time limit in Section 152(3) TCGA 1992 will have long passed and claims to relief can only be accepted in these circumstances by the exercise of the Board of Inland Revenue's discretion. The Board will not exercise its discretion in advance of reinvestment taking place. But this does not rule out the possibility, in an appropriate case, of roll-over relief being given where reinvestment is made after the provisional relief period has expired. In these circumstances, where provisional relief has been recovered, any tax will be repaid.

Example 1

An individual disposes of an asset in June 1996 for £50,000 making a gain of £20,000. In his Return for 1996-97 he makes a declaration that he intends to reinvest the whole of the consideration in new assets for the purpose of a claim to roll-over relief.

No tax is paid on 31 January 1998 on the gain of £20,000. The relevant day is 31 January 2001. If no valid claim to roll-over relief has been made by that date, an assessment will be raised to recover the tax on the gain. Interest is due from 31 January 1998.

Example 2

An individual disposes of an asset in September 1996 for £80,000 making a gain of £30,000. She makes a declaration in her Return for 1996-97 that she intends to reinvest £70,000 in new assets for the purpose of a claim to roll-over relief.

She will pay tax on 31 January 1998 on a gain of £10,000 (the gain that is not to be reinvested). The relevant day is 31 January 2001. In August 1999 she submits a valid claim to roll-over relief on new assets costing £65,000 and says that she no longer wishes to reinvest any greater amount. An assessment will be raised to recover the tax on a gain of £5,000. Interest on that tax is due from 31 January 1998.

! This Article Is No Longer Current (Deleted Index 2001)

COLLECTING AGENTS FOR FOREIGN
DIVIDENDS -- DEDUCTION OF TAX

This article explains the scope of the new rules for the deduction of tax by collecting agents for foreign dividends (including overseas public revenue dividends). The rules also apply to collecting agents for quoted UK Eurobond interest and manufactured overseas dividends.

The new rules were introduced by Schedule 29 Finance Act 1996 which inserted Sections 118A - K in the Income and Corporation Taxes Act (ICTA) 1988 as Chapter VIIA of Part IV. As well as containing the rules for collecting agents, Chapter VIIA contains new rules for paying agents of foreign dividends and United Kingdom public revenue dividends (which are not the subject of this article).

AN OUTLINE OF THE RULES

Broadly, a collecting agent is a person in the United Kingdom (including the United Kingdom branch of an entity resident outside the United Kingdom) who, in the course of his trade or profession, collects foreign dividends for another person. Banks and dealers who sell or buy coupons for foreign dividends are also collecting agents.

A person is a collecting agent in relation to foreign dividends (or the sale proceeds of coupons in the case of a bank or dealer) which are received or arise by virtue of his performance of one or more of five "relevant functions".

Foreign dividends (or the sale proceeds of coupons) collected in this way are called "relevant receipts". Collecting agents must account for tax in respect of relevant receipts which are "chargeable receipts". But not all relevant receipts will be chargeable receipts and a collecting agent will collect them without deducting tax, provided he satisfies certain compliance rules.

For example, the foreign dividends of a person who is not resident in the United Kingdom are not chargeable receipts and a collecting agent will collect them without deducting tax, provided he has obtained the relevant declaration form, or received a notice from the Inland Revenue, in respect of the dividends.

THE FIVE CATEGORIES OF COLLECTING AGENT

Table B in Section 118C(2) consists of two columns:

column 1 contains five descriptions of persons and relevant functions which define a collecting agent; and
column 2 contains five descriptions of foreign dividends, or sale proceeds, which, when they are received or arise by virtue of a collecting agent's performance of the corresponding relevant function, are relevant receipts.

CATEGORY 1 -- ACTING AS CUSTODIAN

Any person in the United Kingdom who, in the course of a trade or profession, acts as custodian of shares, etc. giving rise to foreign dividends is a collecting agent. A person acts as custodian of shares, etc. 'if he holds them, or an entitlement to them, for another person'. This includes a person who physically holds shares for someone else and a person who indirectly holds shares for someone else, perhaps through a sub-custodian or through a dematerialised holding (shares held in electronic form rather than in paper).

Examples of custodians are:

a solicitor who holds shares for a client;
a professional trustee who holds shares for beneficiaries of the trust; and
a bank which holds shares for a borrower as security for a loan.

A person who acts as a custodian is a collecting agent in relation to foreign dividends which are received or arise by virtue of his acting as custodian and which are either:

received by him; or
paid to another person at his direction or with his consent.

Where the owner of shares gives a payment instruction direct to the issuer of the shares and the collecting agent does not receive the dividends, they will not be relevant receipts and the collecting agent will not have to account for tax in respect of them. This is the case even where the collecting agent is aware of the owner's instruction.

Where a collecting agent acts as custodian of shares, etc. by virtue of their lodgement with him for safekeeping and dividends are received by him by virtue of some other function performed by another part of his organisation, the dividends will not be relevant receipts within category 1.

For example, where a bank offers safety deposit boxes for the storage of share certificates and dividends are incidentally lodged to an account operated by the bank, the dividends are not received by the bank by virtue of its performance of a relevant function of acting as custodian. Consequently they are not relevant receipts within category 1.

CATEGORY 2 -- COLLECTING DIVIDENDS BY MEANS OF COUPONS

Any person in the United Kingdom who, in the course of a trade or profession, by means of coupons collects, secures payment of or receives foreign dividends for another person is a collecting agent.

Examples of persons who fall within category 2 are:

a bank which, on behalf of a customer, presents coupons for foreign dividends to the issuer; and
a stockbroker who, on behalf of a client, arranges for a correspondent overseas to present coupons for foreign dividends to the issuer.

' "Coupons" include warrants for and bills of exchange purporting to be drawn or made in payment of ..... dividends'. But see below where the coupon is a cheque and the collecting agent does no more than clear the cheque or arrange for the clearing of the cheque.

A person is a collecting agent in relation to foreign dividends which are received or arise by virtue of his performance of the relevant function - in the case of category 2, the dividends that he collects, secures payment of, or receives.

CATEGORY 3 -- COLLECTING DIVIDENDS OTHERWISE THAN BY MEANS OF COUPONS

Any person in the United Kingdom who, in the course of a trade or profession, and otherwise than by means of coupons, acts for another person in arranging to collect or secure payment of foreign dividends is a collecting agent. The relevant function does not include mere passive receipt --
positive action is required.

For example, where a bank merely accepts receipt of funds representing foreign dividends to an account, perhaps by electronic transfer, that will not be a relevant function and the bank will not be a collecting agent within the third category.

Where back office services such as IT support are provided, for example to an overseas custodian, this is not regarded as arranging to collect or secure payment of foreign dividends where the support is limited to maintaining securities records and generating reports. In other words, there must be no :

direct involvement from the United Kingdom with the client of the person to whom the services are provided;
receipt of dividends in the United Kingdom; or
pursuance of non-receipt of expected dividends from the United Kingdom.

A person is a collecting agent in relation to foreign dividends which are received or arise by virtue of his performance of the relevant function - in the case of category 3, the dividends that he collects or of which he secures payment.

CATEGORY 4 -- BANKS SELLING COUPONS

A bank in the United Kingdom (including the United Kingdom branch of a bank resident outside the United Kingdom) which sells or otherwise realises coupons for foreign dividends and pays over the proceeds to another person, or carries them into an account for another person, is a collecting agent. For example, where, on behalf of a client, a bank sells dividend coupons which have been physically stripped from a paper bearer security.

For the purposes of the fourth category the relevant receipts are the proceeds of sale or other realisation of the coupons. In other words, where the bank sells coupons for foreign dividends on behalf of a customer, as opposed to collecting the dividends, the rules for collecting agents apply to the sale proceeds of the coupons.

CATEGORY 5 -- DEALERS PURCHASING COUPONS

A dealer in the United Kingdom (including the United Kingdom branch of a dealer resident outside the United Kingdom) who purchases coupons for foreign dividends otherwise than from a bank or another dealer is a collecting agent. For the purposes of category 5 the relevant receipts are the proceeds of sale of the coupons. In other words, the dealer must apply the rules for collecting agents to the price he pays for the coupons.

CLEARING OF A CHEQUE OR ARRANGING FOR THE CLEARING OF A CHEQUE

Where a person within one of the five categories above does no more than clear a cheque, or arrange for the clearing of a cheque for foreign dividends, that will not be a relevant function and the person will not be a collecting agent in relation to the dividends. This exception will mainly apply to collecting agents in category 2 where the collection of foreign dividends by cheque would otherwise be a relevant function. It will not generally affect the operation of the other four categories.

Examples of clearing of a cheque or arranging for the clearing of a cheque are:

a bank which, on behalf of a customer, accepts a deposit to an account of a cheque for foreign dividends and presents it to the drawer for payment; and
a stockbroker who, on behalf of a client, arranges for a bank to present a cheque for foreign dividends to the drawer for payment.

It is immaterial whether the cheque is drawn in a foreign currency or in sterling.

STOCK DIVIDENDS, STOCK/CASH OPTIONS, RE-INVESTMENT SCHEMES

Collecting agents may receive foreign dividends in the form of cash and/or stocks or shares. But collecting agents are only required to account for tax on foreign dividends which constitute income in the hands of the shareholder.

The following foreign dividends are not regarded as income:

bonus issues of new stock;
dividends satisfied by the issue of new stock (but not previously issued stock purchased as part of a dividend re-investment scheme);
stock dividends paid to a UK 'Marking Name'(firms in the UK which are registered holders, but not beneficial owners, of shares in foreign companies), even if the Marking Name sells the stock for cash which is passed on to the investor;
stock dividends paid to a
nominee, even if the nominee sells the stock for cash which is passed on to the investor;
cash for fractions -- where a shareholder opted to receive all of a dividend in the form of stock and receives a cash payment for a fraction;
the sale proceeds of a coupon entitling the holder solely to a stock dividend;
liquidation payments;
returns of the shareholder's capital; and
the sale proceeds of a coupon entitling the holder solely to subscribe for additional shares.

The following foreign dividends are regarded as income:

cash dividends (other than liquidation payments, returns of share capital and cash for fractions -- see above);
dividends received in cash as a result of taking a cash option, including any cash for fractions where the shareholder opted to receive part of the dividend in cash and part in the form of stock;
distributions in the form of shares in another company (with the exception of shares issued as a result of a take- over or merger);
previously issued stock purchased as part of a dividend re-investment scheme; and
payments in cash in consideration of the cancellation of a cash dividend.

INTERACTION WITH THE RULES FOR PAYING AGENTS

Where foreign dividends are chargeable payments of a paying agent in the United Kingdom, so that the paying agent is required to deduct tax from them, they cannot also be chargeable receipts of a collecting agent from which the collecting agent is required to deduct tax.

For example, where a person in the United Kingdom acts as custodian of shares for a client, he is a collecting agent within category 1 in Table B. If he receives foreign dividends arising on the shares from a paying agent in the United Kingdom who deducted income tax from them, the collecting agent will not be required to deduct tax from them.

Where foreign dividends are not chargeable payments of a paying agent in the United Kingdom they may be chargeable receipts of a collecting agent, notwithstanding that they were in fact paid by a paying agent in the United Kingdom.

For example, where a collecting agent acts as custodian of shares for a person who is not resident in the United Kingdom and gives an appropriate person's declaration (on form PA2) to a paying agent in relation to foreign dividends arising on those shares, the dividends will not be chargeable payments of the paying agent and he will not deduct tax from them. In the hands of the collecting agent the dividends will be relevant receipts and will be chargeable receipts, unless he in turn has obtained a declaration from his client.

THE E ARRANGEMENT

In some circumstances intermediaries may wish to accept delegation of the responsibilities of a UK paying agent and operate the rules for paying agents themselves. Currently there is an arrangement called the E Arrangement which enables persons approved by the Inland Revenue to accept delegation of the responsibilities of a paying agent. The Inland Revenue plans to reform the E Arrangement in Regulations in Autumn 1996. In the meantime the E Arrangement remains in force as before.

INTERACTION WITH SECTION 349 ICTA 1988

The main provision governing deduction of income tax from income falling within Case III of Schedule D is Section 349. In some circumstances foreign dividends may fall within Case III of Schedule D because they have a source in the United Kingdom.

For example, where the United Kingdom branch of a foreign bank issues a certificate of deposit, interest arising on the certificate will be a foreign dividend and will also be within Case III of Schedule D.

Further details of the rules for determining when interest is within Case III of Schedule D are in Tax Bulletin Issue 9 (November 1993, page 100) entitled Schedule D Case III -- Meaning of "Source".

There is express provision that the rules for paying agents of foreign dividends should take precedence over the rules in Section 349. But, with the exception of quoted UK Eurobond interest, there is no equivalent provision that the rules for collecting agents for foreign dividends should take precedence and Section 349 remains the main provision governing the deduction of tax from foreign dividends which fall within Case III of Schedule D.

It follows that where foreign dividends fall within Case III of Schedule D so that Section 349 applies to them, or would apply but for some exclusion in that Section, they are not also treated as relevant receipts of a collecting agent.

For example, where the United Kingdom branch of a foreign bank issues a certificate of deposit, the interest arising will be a foreign dividend and, because it has a United Kingdom source, will also be within Case III of Schedule D. Where the interest is paid through a United Kingdom collecting agent, Section 349 would apply to the interest but for the exception in Section 349(3)(b) which excludes interest paid by such a bank in the ordinary course of its business. But because Section 349 takes precedence the interest is not treated as a relevant receipt of the collecting agent.

In practice, it is not always easy for collecting agents to tell whether foreign dividends fall within Case III of Schedule D so that Section 349 applies to them. Where a collecting agent is unable to determine whether foreign dividends fall within Case III of Schedule D so that Section 349 applies he should treat the dividends as a relevant receipt and apply the rules for collecting agents.

MORE THAN ONE COLLECTING AGENT FOR THE SAME FOREIGN DIVIDENDS

In some circumstances there may be two or more collecting agents in relation to the same foreign dividends. Currently there is an arrangement called the F Arrangement which determines which collecting agent is responsible for applying the rules for collecting agents in relation to the dividends. The Inland Revenue plans to reform the F Arrangement in Regulations in Autumn 1996. In the meantime the F Arrangement remains in force as before.

SCHEDULE E:
CHANGES TO THE PAYE REGULATIONS
FOR SELF ASSESSMENT

The first set of changes to the PAYE regulations for Self Assessment was the Income Tax (Employments) (Amendment No 4) Regulations 1995 (Statutory Instrument (SI) 1995 No. 1284) which came into force on 6 April 1996 but had been laid before the House of Commons on 12 May 1995.

They were laid nearly a year before they came into force because they concentrated on the new obligations on employers -- particularly in relation to reporting the cash equivalent of benefits in kind and to copying P11D information to employees. Employers needed to be given time to plan ahead for 6 April 1996. The Inland Revenue booklet "Self Assessment: What it will mean for employers"--SAT3 (1995) was sent to all employers in July 1995. It set out in detail the new procedures.

But it was always recognised that some further changes would be needed to link PAYE with the Self Assessment system. These changes were made in the Income Tax (Employments) (Amendment No 3) Regulations 1996 (SI 1996 No. 1312 ) which were laid before the House of Commons on 15 May 1996 and came into force on 5 June 1996.

The changes do not have any significant impact on employers or employees. They fall naturally into four groups:

Changes because formal assessments will normally be self assessments, rather than Schedule E assessments.
Changes because of the cessation of the direct collection and assessment arrangements.
Changes relating to appeals.
Changes relating to interest on tax.

CHANGES BECAUSE FORMAL ASSESSMENTS WILL BE TOTAL INCOME SELF ASSESSMENTS RATHER THAN SCHEDULE E ASSESSMENTS

For 1996-7 onwards, as now, most taxpayers whose income is wholly or mainly within Schedule E will not need formal assessments. PAYE will continue to try to get things right in the tax year. Where adjustments are needed after the end of the tax year, repayments will be made directly and underpayments collected through coding. The present practice of sending taxpayers informal calculations and explanations will continue in such cases.

But, where a taxpayer is required to self assess, any income which has been subjected to PAYE, and the associated PAYE tax, will be taken into account in the calculation of the self-assessment.

New Regulation 101A covers the fitting of Schedule E and PAYE tax into a self-assessment. This regulation simply replicates the present position for assessments whereby the PAYE tax taken into account in an assessment can be adjusted to cover matters such as repayments before an assessment is made, credits to taxpayers where an employer fails to deduct tax, and directions that tax should be recovered from employees.

CHANGES BECAUSE OF THE CESSATION OF THE DIRECT COLLECTION AND ASSESSMENT ARRANGEMENTS

These are the arrangements whereby, for tax year 1995-6 and earlier years,
persons within Schedule E are assessed and pay tax directly on income for which there is no employer on whom an obligation to operate PAYE falls. For tax year 1996-7 onwards people with this type of income will be within self assessment and will pay tax, including any necessary payments on account, through the self assessment system. Regulation 103 is revoked except for 1995-6 and earlier years.

CHANGES RELATING TO APPEALS

Until the changes the PAYE regulations did two things relating to appeals:

where there was a Schedule E assessment they could direct which General Commissioners were to hear an appeal;
where the right of appeal was created by the PAYE regulations, for example, the right of appeal against a code number, the regulations set out how to determine which General Commissioners could hear an appeal.

In Self Assessment the PAYE regulations will no longer cover appeals against assessments because most assessments will be self assessments. The normal rules relating to appeals, in the Taxes Management Act (TMA) 1970, will apply to all assessments.

Where a right of appeal is created by the PAYE regulations, such as that against coding, the regulations will continue to specify a place for hearing but, as now, the taxpayer will have a right, set out in the TMA 1970, to specify an alternative place for the hearing. Paragraph 3 of Schedule 3 TMA 1970 (substituted by paragraph 10 Schedule 22 Finance Act (FA) 1996) covers PAYE appeals.

CHANGES RELATING TO INTEREST ON TAX

FA 1994 changed, for tax year 1996-7 onwards, the law relating to interest on tax overpaid by employers. Interest paid with any repayment will be calculated from the 14th day after the end of the tax year or, if it is later, the date the tax for the year was paid. (At present interest is not paid for the first 12 months). The regulations have been changed to reflect this.

SCHEDULE E:
SUBSTITUTE FORMS P11D

We have received requests for central authorisation of substitute forms P11D. This article describes:

the current arrangements for obtaining approval of substitute forms P11D from the Officer in Charge of each tax office to whom they will be submitted. These arrangements will continue to apply to most substitute versions,
a new central approval service which is being introduced in response to requests. The central approval service will only apply to substitute forms P11D which are copies or very near copies of the official form and are expected to be sent to more than one tax office. Central approval will first be available for 1996-97 substitute forms P11D (ie those for the year ended 5 April 1997) and will avoid the need to approach local tax offices. The arrangements are described in detail below.

BACKGROUND

The employer must complete a form P11D for every director and every employee falling within the provisions of Part V Chapter II Income and Corporation Taxes Act (ICTA) 1988 showing expenses and benefits in kind. The Employments Regulations require that the return to the Inland Revenue must be "in such form as the Board may approve or prescribe".

For the tax year 1996-97 onwards employers have to give the same P11D information that is supplied to the Inland Revenue to the director or employee. Employers are free to choose how to provide this information and may decide to photocopy the official form P11D or an approved substitute version. The official form P11D has been designed to make it as easy as possible for the director or employee to complete their tax return correctly.

In this article references to employer includes anyone who pays expenses or provides benefits.

LOCAL AUTHORISATION OF SUBSTITUTES

Employers may ask the Officer in Charge of their tax office for authority to use a substitute form P11D or provide P11D information in list form. List form can be administratively convenient for some employers. The Officer in Charge may give authority for this provided the employer undertakes to include on the substitute forms or list, the full range of benefits and expenses required by form P11D and the national insurance number of each employee. Any list must be in a readily manageable form and the employer will be required to provide a covering certificate that according to the best of his or her knowledge and belief the particulars required are fully and truly stated. The Tax Office may ask for the completion of individual forms P11D for directors and certain employees.

CENTRAL AUTHORISATION OF SUBSTITUTES

Where the substitute form P11D is in non-standard form (including a list), or will be sent to only one tax office, authorisation will remain the responsibility of the Officer in Charge of the local office. That is because it is the local office that has to process the forms and should therefore have the final say in whether the substitute form or list is acceptable. But we have received requests for authorisation from firms who produce substitute forms which are very close to the official version and which are then used by a number of clients. Having to seek authorisation from each tax office for these copy or near copy versions of the official form P11D is inconvenient and time consuming for all concerned. We have therefore decided to introduce a central authorisation service for substitute forms P11D which are:

copies or near copies of the official form P11D; and
are intended to be sent to more than one tax office.

DEFINITION OF COPY OR NEAR COPY

In order to qualify for central approval the substitute form P11D will need to be:

printed on A4;
list the same benefits and expenses in the same order as the official version;
show the same box numbers;
contain the same factual information as required by the official version;

In other words, to qualify as a copy or near copy of the official version, the substitute P11D must closely resemble the official version. However, minor changes will be acceptable, as will, for example, changes to spacing, typeface, colour and background.

CENTRALLY APPROVED SUBSTITUTES RETURNED TO TAX OFFICES

The centrally approved substitute will be the full version of the substitute form P11D. For centrally approved substitutes which are produced by computer printing it is acceptable for the completed substitute forms sent to Tax Offices to differ from the approved version in certain important respects. The following major differences are permissible:

a completed form need only show benefits provided or expenses made to the particular employee. This would mean the omission of any of the sections headed A-P which did not apply, or where a section has more than one numbered box, omission of the numbered box or boxes which did not apply and adjacent information. The omission of these entries is the Revenue's preferred approach;
it is not necessary to print the notes for employer or employee, although we strongly recommend that P11D information given to an employee is accompanied by an explanation;
the substitute forms may be printed on a smaller paper size than A4 providing a uniform size is used for all substitute forms returned by the employer.

APPLYING FOR CENTRAL APPROVAL

The central approval service will be available for substitute forms P11D for 1996-97 and later years. The latest draft of the official version of the form P11D for 1996-97 is printed in Appendix 9 of Booklet 480 (1996) "Expenses and Benefits: a Tax Guide". Appendix 9 also contains some guidance on the preferred format of substitute forms P11D from 1996-97. To help with the production of substitute forms P11D, advance copies of the final version of the official form P11D will be available from December 1996 from the address below. A facsimile of the official form will also be attached to the "Notes on PAYE for Computer Users" which are issued to registered computer users shortly after the November Budget.

Applications for central approval of substitute P11Ds may normally be made from December in the relevant tax year eg 1997-98 substitute P11Ds will be centrally approved from December 1997.

For 1996-97 special arrangements apply and applications for central approval of substitute P11Ds can be made immediately. The substitute P11Ds should be based on the official version of form P11D in Appendix 9 of Booklet 480 (1996). Applications made prior to December 1996 may be approved on a provisional basis. The provisional approval will be subject to:

any possible changes needed as a consequence of the 1996 Budget;
any other changes needed to reflect the final version of the official form P11D;
a final version of the substitute P11D being supplied before April 1997.

All applications will be considered as quickly as possible. Applications should be made to:

Inland Revenue
Business & Management Services Division
Room 116
Accounts Office
Shipley
West Yorkshire
BD98 8AA

When authorisation is given, a unique reference number will be issued which should be printed at the foot of the front of each substitute P11D. The authorisation will be valid for that particular year only.

Where authorisation is not given centrally, the substitute form will still be accepted in specific tax offices provided authorisation is obtained from the Officers in Charge of the local offices involved.

TAX LAW REWRITE:
THE WAY FORWARD AN INLAND REVENUE
CONSULTATIVE DOCUMENT

On 23 July 1996 the Inland Revenue published a consultative document "Tax Law Rewrite: The way forward".

The consultative document sets out the Inland Revenue's proposals for taking the tax law rewrite project forward. They would welcome comments and views from all interested parties on these proposals. The deadline for comments is Friday 1 November 1996.

BACKGROUND

Following the work carried out by the Inland Revenue in 1995, the Chancellor of the Exchequer announced in his Budget Statement that he hoped to make a start in 1996 on a major project to simplify tax legislation for the benefit of businesses and taxpayers generally.

THE REWRITE PROJECT

Key points of the project:

a rewrite over a period of about five years, of most existing primary legislation on Inland Revenue taxes,
the use of plain language to make legislation simpler, clearer and more user-friendly,
a tax code which businesses and other taxpayers would find easier to understand and work with,
lower taxpayer compliance costs, and better service from the Inland Revenue,
help to taxpayers within the new system of Self Assessment.

The project relates to Inland Revenue taxes only: Income Tax, Corporation Tax, Capital Gains Tax, Inheritance Tax, Petroleum Revenue Tax and Stamp Duties. It is about making tax legislation easier to use and understand. Other than where minor changes to the rules are needed to support that objective, it is not about simplifying the policy underlying those taxes. Tax policy changes will continue to be considered in the normal way.

CONSULTATIVE DOCUMENT

This consultative document is the next major milestone in the rewrite project. To be successful the rewrite needs careful planning and the close involvement of those who use the law. The consultative document sets out the Inland Revenue's proposals for taking the rewrite forward. It covers such areas as the general drafting approach, design and layout, ordering and numbering of tax legislation and priorities for the rewriting.

DETAILS OF THE PROPOSALS

The Inland Revenue will aim to make the rewritten law as easy as possible to understand, through the logical ordering of sections and subsections, directness of expression and the way the law is laid out.

Drafting guidelines are necessary to try to ensure a measure of broad consistency, and the consultative document includes some proposed drafting guidelines. These cover some of the more important aspects:

length of sentences,
use of "shall",
drafting in second person,
choice of words and phrases,
definitions,
gender-free drafting, and
explanatory material.

The consultative document says that purposive or general principles drafting cannot be used as a blanket approach to the rewrite. But the use of more generally drafted provisions, or even statements of purpose, will be considered where the Inland Revenue is sure that this does not increase uncertainty for users.

On design and layout, the Inland Revenue will look for improvements in both typography -- the size and shape of the print, etc. -- and in the text's layout on the page, including the spaces around it, signposting and other matters.

The Inland Revenue has looked at a number of options for reordering the rewritten legislation:

making minimal changes to the current order,
ordering on the basis of a series of activities or transactions,
ordering on the basis of a series of subjects or topics,
ordering by separate taxes, and
ordering by the type of taxpayer e.g. individuals, companies, employers, etc.

No single approach is ideally suited -- a combination may be the best way forward.

A numbering system for tax legislation should be both durable and brief; it is an added advantage if it assists with signposting. No system will completely satisfy all these criteria, but some may be better than others. There are two main alternatives to the present sequential numbering system:

a multi-character system with either two or three components to denote the Part, section and (in the 3-part variant) Chapter,
leaving gaps in the legislation when first enacted might allow new legislation to be slotted in without disturbing existing numbers.

The Inland Revenue feel that there are advantages in a multi-character system, but not in leaving gaps.

There are four main approaches to implementing the ordering and numbering proposals:

reordering after rewriting,
reordering before rewriting,
rewriting alongside a reordered Act,
a 'ghost code'.

The first two options have too many disadvantages when applied to such a large project. Of the other two, the Inland Revenue feel the 'ghost code' approach gives the best balance between discipline and flexibility. The 'ghost code' would provide a guide to how the finished rewritten code would look like and how the rewriting should be done to fit in. But the 'ghost code' would not be implemented in advance.

There are two basic options for implementing the legislation:

bring all the rewritten legislation into effect on a single date ('Big Bang'); or
bring the legislation into effect in stages.

The rewrite would be easier to do with the flexibility given by 'Big Bang'. But staged implementation would pose no insuperable difficulties, although making the new and old legislation work together would be complicated.

The Inland Revenue has concluded that the charging provisions for trading income of individuals should be the central element in the first tranche of the rewrite. But, to provide a fuller test of the various possible drafting techniques, the first tranche should include one or two reasonably sized pieces of more technical legislation.

Treasury Ministers have concluded that a dedicated project team within the Inland Revenue should carry out the rewrite. But a very high degree of user-involvement is essential -- the team will include a number of members drawn from the private sector. There will also be close consultation with the users' representatives through a standing consultative committee. There will also be a small joint private sector/Revenue steering committee, reporting to the Financial Secretary but feeding its advice on day-to-day matters direct to the Project Director, to provide strategic guidance on the project.

The Inland Revenue expect the full rewrite project to take about five years. But there will be a stocktake once the first tranche or tranches of rewritten law are complete -- this stocktake should take place in the latter part of 1997. It should gather as much cost/benefit information as possible as well as looking at whether the right processes are in place and, if not, how these can be improved.

Comments should be sent to:

Basil Rajamanie
Room 826
S W Wing
Bush House
Strand
London
WC2B 4RD
020 7438 7606

Copies of the consultative document (price £4.00, post free) can be obtained from: the Inland Revenue Reference Library, Ground Floor, South West Wing, Bush House, Strand, LONDON WC2B 4RD. The consultative document is also available on the Internet in the 'Technical Information' section from the top menu. Comments can be sent by e-mail to Basil Rajamanie.

interpretations

CAPITAL GAINS TAX:
VALUATIONS FOR CAPITAL GAINS TAX APPLYING
GRAY V IRC [1994] STC 360

We have been asked whether the decision of the Court of Appeal in Gray (Surviving Executor of Lady Fox deceased) v IRC [1994] STC 360 has any implications for the valuation of assets for the purpose of capital gains tax.

The Gray case concerned the valuation of assets for what is now inheritance tax (IHT) but was at the material time capital transfer tax (CTT). Section 4 Inheritance Taxes Act (IHTA) 1984 deems a transfer of value to have been made for the purpose of CTT/IHT immediately before death equal to the value of the deceased's estate at that time. Section 5 IHTA 1984 defines a person's estate as "the aggregate of all the property to which he is beneficially entitled". And Section 160 IHTA 1984 provides that ".....the value of any property at any time is......the price which the property might reasonably be expected to fetch if sold in the open market at that time....". The main question in Gray was whether two items of property comprised in the deceased's estate must be taken separately or whether they could be treated as one unit for valuation under Section 160 IHTA 1984.

The principle that emerged from Gray is that two or more different assets comprised in an estate can be treated as a single unit of property if disposal as one unit was the course that a prudent hypothetical vendor would have adopted in order to obtain the most favourable price without undue expenditure of time and effort.

This principle will be applicable to capital gains tax (CGT) valuations in which the statutory hypothesis on which the valuation is based deems two or more assets to be disposed of together. Examples will include:

an acquisition by personal representatives or legatees under Section 62 Taxation of Chargeable Gains Act (TCGA) 1992 of assets of which a deceased person was competent to dispose,
an acquisition of settled property under Section 71(1) TCGA 1992 on the occasion of a person becoming absolutely entitled to that settled property.

Where the principle established in Gray is followed, so as to value a number of assets collectively to produce a total valuation in excess of the value of the assets valued separately, an apportionment will be required in accordance with Section 52(4) TCGA 1992. The apportionment is to be made on a just and reasonable basis and so must reflect the value of each of the assets. Commonly this will require an apportionment of the total value in proportion to the value of each asset.

Where the statutory hypothesis requiring a valuation proceeds on the assumption of a disposal of a single asset by itself the principle established in Gray cannot apply. For example, in Henderson v Karmel's Executors [1984] STC 572 the court held that even though at 6 April 1965 Mrs Karmel owned both the freehold interest in a farm and controlled the tenant company, so having the power one way or another to terminate the company's interest, that was insufficient to value the freehold interest on a vacant possession basis for CGT rebasing to 6 April 1965.

Other examples of valuation hypotheses for which assets will continue to be valued singly include:

Section 17 TCGA 1992 where there is a disposal of an asset for consideration deemed to be equal to its market value,
Section 35 TCGA 1992 when a valuation of an asset is required for the purpose of rebasing to 31 March 1982.

The single asset valuation for Section 17 TCGA 1992 is modified by Section 19 TCGA 1992 where there is a series of linked transactions between connected persons. Each disposal in the series may be treated as being made for consideration equal to a proportion of the aggregate value of all the assets in the series. [Gray v IRC [1994] STC 360]

(Superceded by CT13700 onwards)

THE EXCHANGE GAINS AND LOSSES
(ALTERNATIVE METHOD OF CALCULATION
OF GAIN OR LOSS) (AMENDMENT)
REGULATIONS 1996 (SI 1996/1347)

These Regulations were laid before the House of Commons on 21 May 1996 and came into force on 30 June 1996. They introduce amendments to that part of the Exchange Gains and Losses (Alternative Method of Calculation of Gain or Loss) Regulations 1994 (Statutory Instrument (SI) 1994/3227) which deals with matched assets and liabilities ('the matching regulations'). One change - designed to block an avoidance loophole -- has given rise to concern that its effects go further than intended.

The matching regulations are designed to enable tax treatment broadly to follow normal accounting practice. Normally exchange differences on monetary assets and liabilities (for instance, cash or debt) are dealt with for accounting purposes through a company's profit and loss account and generally this is followed for tax purposes. The off-set method permitted by Statement of Standard Accounting Practice (SSAP) 20 allows exchange differences on liabilities used to fund or hedge equity investments to be dealt with as a reserve movement set against exchange differences arising on the translation of the net investment. As a result the exchange differences are not recognised in the profit and loss account. Where the exchange movements on the liability are brought to account for tax purposes on a translation basis following Finance Act (FA) 1993, but those on the asset are not because it is not a "monetary asset" (for example shares rather than debt) then without special provision, accountancy treatment and tax treatment would diverge. The matching regulations aim to mirror as far as possible the accounting treatment permitted by SSAP 20 by providing for an election to enable exchange differences on certain matched liabilities (i.e. certain debt and duties under currency contracts) to be deferred or in certain circumstances to be left out of account altogether. The regulations allow the whole or a specified part of an asset to be matched in this way.

Regulation 4 of SI 1996/1347 inserts a new Regulation 5(3A) into SI 1994/3227. This is designed to prevent companies taking advantage of these matching regulations by using the time limits for making an election or increasing the proportion of an asset to be matched to defer the recognition of exchange gains for tax purposes but obtaining immediate tax relief for exchange losses. It does this by preventing companies gaining immediate relief for exchange losses where for accounting purposes they have been taken to reserves to offset exchange gains on an equity investment or foreign enterprise, but which would otherwise be recognised as they accrue for tax purposes. It is intended to operate where less than 100% of an asset is the subject of a matching election. It is not intended to deny relief for losses arising on liabilities on which exchange differences are taken to reserves in accordance with SSAP20 where no matching election has been made in respect of an asset.

Concern has been expressed that the new Regulation 5(3A) goes too far, that it:

disallows completely those losses which would have been recognised on disposal of the matched asset under the original regulations,
disallows exchange losses dealt with as an adjustment to reserves to offset exchange gains on long term loans, inter-company balances or other assets not subject to a matching election which have also been dealt with as a movement to reserves in accordance with normal accounting practice.

To allay these concerns, the Inland Revenue can offer reassurance that in applying new Regulation 5(3A):

a. Where the matched asset is one to which Regulation 7 of SI 1994/3227 would otherwise apply, so that deferred exchange differences on matched liabilities would have been recognised on disposal of the asset under the original regulations, then any exchange loss not recognised as it accrues as a result of Regulation 5(3A) will also be relieved on disposal of the asset.

b. New Regulation 5(3A) will only be applied where an asset is partially matched. In that case, it will only be applied to deny immediate tax recognition for exchange losses on one or more liabilities matching that asset to the extent that such losses relate to the excess of:

the amount of such liabilities which hedge or fund that asset (and in respect of which exchange differences are consequently taken to reserves in accordance with SSAP20); over
the amount of such liabilities matched for tax purposes.

c. New Regulation 5(3A) will only be given effect where such exchange losses taken to reserves remain outside a matching election at a time on or after 30 June 1996. Where, for example, a revised matching election is made before 30 June 1996 bringing the proportion of the asset matched into line with accounting treatment, Regulation 5(3A) will have no effect.

This article sets out how the Revenue will apply new Regulation 5(3A) and will be followed in all circumstances where that regulation is applied.

[SI 1996/1347]

(Superseded by BIM45565 onwards)

SCHEDULE D
CASES I AND II
LOCUM AND FIXED COSTS
INSURANCE POLICIES

An Inland Revenue Press Release on 30 April 1996 explained that the premiums on a certain type of sickness insurance policies are a deductible business expense.

These insurance policies indemnify the policyholder against business costs such as payments to a locum tenens, or other fixed overheads, in the event of the policyholder's incapacity to carry on the business during a period of illness. These locum and fixed costs insurance policies are held mainly by medical professionals such as doctors and dentists who practise alone or in partnership.

The benefits received under the policies are taxable as business receipts because they diminish allowable business expenses. They are not within the exemption legislated in Finance Act 1996 (Section 580A(6) Income and Corporation Taxes Act (ICTA) 1988) and nor are they within the earlier Extra Statutory Concession (A83) -- the premiums are a deductible business expense.

The 30 April Press Release describes arrangements for the holders of locum and fixed costs insurance policies to claim repayments under the error or mistake provisions (Section 33 Taxes Management Act (TMA) 1970). Any such claims will be subject to the general rules for error or mistake relief, in particular the six year time limit. A claim may be beneficial if premiums and benefits under the policies have been excluded in computing the profits for settled periods of account. But relief for the previously unallowed premiums will be reduced by any untaxed benefits for the earliest period of account to which the claim relates and any subsequent settled periods.

If an error or mistake claim is made, the premiums must also be deducted and benefits treated as taxable receipts for any periods of account for which the profits and assessments are not yet settled.

We have been asked how error or mistake relief claims should be made by persons who carry on business in partnership. Relief for the premiums paid on locum and fixed costs policies are a deduction in computing the taxable profit of the single trade or profession the partnership carries on, even if they have been paid personally by one partner (paragraph 5.17 SAT 1 (1995) "The new current year of assessment"). The claim must therefore take into account both the premiums paid and the benefits received on locum and fixed costs policies for all the members of the partnership for the period of the claim and subsequent periods, as explained in the Press Release. It is not possible to determine whether the profits of the partnership already taxed (and hence the share of any individual partner) have been excessive unless the premiums and benefits on all such policies held by the partners are given the same treatment.

Some partnerships may include partners who hold locum and fixed costs policies and other partners whose sickness insurance cover is under other permanent health insurance
arrangements. The two types of policy must be distinguished in making error or mistake claims. There is no relief for premiums on policies that provide ordinary life, accident or sickness cover. For tax the premiums are a private expense of the individual and the benefits received under the policies are not business receipts.

[Section 33 TMA 1970 Section 580A(6) ICTA 1988 Extra Statutory Concession A83 Paragraph 5.17 SAT 1 (1995 edition)]

SELF ASSESSMENT:
EXTENDED TIME LIMITS FOR
ASSESSMENT OF PARTNERSHIP PROFITS
WHERE THERE HAS BEEN 'FRAUDULENT
OR NEGLIGENT CONDUCT' IN CONNECTION
WITH A PARTNERSHIP RETURN:
SECTION 36(2) TMA 1970

We have been asked to clarify the operation of Section 36(2) Taxes Management Act (TMA) 1970 (as amended by para 11(2) Schedule 19, Finance Act (FA) 1994) as it applies to the assessment of profits from a trade or profession carried on in partnership under Self Assessment.

We can confirm that it was never the intention that Section 36(2) TMA 1970 (as amended by para 11(2) Schedule 19, FA 1994) should preserve 'joint liability' to the tax on the profits of a trade or profession carried on in partnership. We would add that in our view the revised subsection does not -- indeed cannot -- have that effect.

The purpose of Section 36 TMA is to provide the Revenue with extended time limits for assessments to make good to the Crown a loss of tax attributable to "fraudulent or negligent conduct". Under Self Assessment a partnership return will be given to all the relevant partners, collectively, but (as now) a single partner will be required to complete the return for the partnership. Where the partnership return is made in circumstances such that there has been 'fraudulent and negligent conduct' -- whether by the partner responsible for the return, or attributable to some other relevant partner -- then Section 36 TMA 1970 may apply. But clearly it would be quite inappropriate for the Revenue's right to collect the additional tax due to be limited to the additional tax due on the share of profit allocated to the partner who is actually 'the person in default'. In these circumstances "new" Section 36(2) TMA 1970 simply allows the Revenue to make individual assessments on each of the partners who have additional tax to pay on their revised share of the partnership profit.

The original version of Section 36(2) TMA operated in a regime in which the profits of a trade or profession carried on in partnership could only be assessed by means of a composite partnership assessment (Section 111 ICTA 1988). In that context any assessment made on the authority of Section 36(2) TMA must be a composite partnership assessment for which the partners have joint liability. The new version of Section 36(2) TMA operates in a regime in which the profits of a trade or profession carried on in partnership can only be assessed by means of separate assessment of each partner's share of profit (Section 111 ICTA 1988 as amended by Section 117(2) FA 1995). In this context any assessments made on the authority of Section 36(2) TMA must be separate assessments of each partner's shares of partnership profit. There is no longer any mechanism by which a composite partnership assessment can be made and therefore no means of creating a joint liability to the tax due on the profits of a trade or profession carried on in partnership.

[Section 36(2) TMA 1970 as amended by para 11(2) Schedule 19 FA 94 Section 111 ICTA 1988 as amended by Section 117(2) FA 95]

miscellaneous

CORPORATION TAX PAY & FILE
COMPUTATION OF TAX CHARGEABLE --
APPORTIONMENT OF PROFITS
BETWEEN FINANCIAL YEARS

Section 8(3) Income and Corporation Taxes Act (ICTA) 1988 says that Corporation Tax for any Financial Year is charged upon the profits arising in that year, but is to be computed and charged by reference to Accounting Periods. The profits chargeable are therefore, where necessary, to be apportioned between the Financial Years in which the Accounting Period falls.

Note 16 to the Return Form CT200(1995) explains that in practice the return only needs to show an apportionment of profits between Financial Years when it could affect the tax calculation. This would be when the Accounting Period straddles two Financial Years and the tax rates are different in each year. It is then necessary to apportion the profits to determine how much is chargeable at each rate. The Small Companies' Rate of Corporation Tax was 25% in Financial Year 1995 and this was reduced to 24% for Financial Year 1996 so that any company claiming to be charged at the Small Companies' Rate for an Accounting Period straddling 1 April 1996 will need to apportion its profits, using boxes 55 -58, as well as boxes 44-47 on the CT200(1995).

Section 72 ICTA 1988 directs that when an apportionment of profits is necessary for the purposes of charging Corporation Tax then any apportionment is to be made by reference to the number of days in the respective periods. The use of months in making the apportionment would result in an incorrect tax charge. For example:

Accounting Period 1.1.96 - 31.12.96 Corporation Tax Profits £250,000
a) Apportionment by reference to months
3/12 x 250,000 = 62,500 x 25% =      15,625.00
9/12 x 250,000 = 187,500 x 24% =     45,000.00      60,625.00
b) Apportionment by reference to days
91/366 x 250,000 = 62,158 x 25% =    15,539.50
275/366 x 250,000 = 187,842 x 24% =  45,082.08      60,621.58 
Difference                                                  3.42

It causes inconvenience all round if Tax Computations are submitted containing apportionment by reference to months rather than days, and often leads to small over- or under-payments of tax which have to be sorted out. We urge companies and their agents always to apportion by days.

The table below may be helpful when apportioning profits for Accounting Periods which last for twelve months. It sets out the number of days falling into each Financial Year for the most common Accounting Period end dates which straddle Financial Years.

AP End Date        Normal Year       Leap Year    
Days                Days
FY1      FY2        FY1      FY2
30 April             335       30        336       30
31 May               304       61        305       61
30 June              274       91        275       91
31 July              243      122        244      122
31 August            212      153        213      153
30 September         182      183        183      183
31 October           151      214        152      214
30 November          121      244        122      244
31 December           90      275         91      275
31 January            59      306         60      306
28/29 February        31      334         31      335

Determine the relevant number of days falling within each Financial Year from the appropriate columns in the table. The denominator is, of course, the number of days in the Accounting Period. For example:

NORMAL YEAR

Accounting Period 1.1.95 - 31.12.95 CT Profit £250,000
FY1994 90/365 x 250,000 FY1995 275/365 x 250,000

LEAP YEAR

Accounting Period 1.1.96 - 31.12.96 CT Profit £250,000
FY1995 91/366 x 250,000 FY1996 275/366 x 250,000

! This Article Is No Longer Current (Deleted Index 2004)

INHERITANCE TAX:
ALLOWABLE DEDUCTIONS -- REPUBLICATION
OF EXISTING CONCESSION

By a Press Release of 1 August 1978, marking the termination of the 1946 death duties Convention between the UK and Canada, the Board announced an Extra-Statutory Concession (ESC) relating to UK capital transfer tax (CTT) and the Canadian income tax charge on gains arising on a deemed disposal on death.

In 1986, CTT was replaced by inheritance tax (IHT). Under the IHT rules, a person's outstanding debts are deducted in arriving at the value of his estate immediately before his death. As the Canadian income tax charge arises after the death, it is strictly not an allowable debt for IHT but a deduction is allowed by concession.

The concession, the text of which we have reproduced below, was unintentionally omitted from our booklet, IR1. It will be included in the next edition of IR1 as ESC F18.

TEXT OF CONCESSION

INHERITANCE TAX (IHT): TREATMENT OF INCOME TAX IN CANADA ON CAPITAL GAINS DEEMED TO ARISE ON A PERSON'S DEATH

Under 5(3) of the IHT Act 1984 a person's liabilities at the time of death are taken into account in arriving at the value of their estate for the purposes of IHT. The Board of Inland Revenue will by concession regard this provision as applying to income tax in Canada charged on a deemed disposal immediately before death, even though the liability may not in strictness have arisen until the person had died.
Where there is an IHT charge on a deceased person's world-wide estate, and income tax in Canada is charged on deemed gains which are attributable to assets forming part of that estate, the Canadian tax will rank as a deduction in arriving at the value of the estate for IHT purposes. The Canadian tax will normally be treated as reducing the value of assets outside the United Kingdom whether those assets are liable to IHT or not; but if the Canadian Tax exceeds the value of those assets, the excess will be set off against the value of the United Kingdom assets.

! This Article Is No Longer Current (Deleted Index 2001)

PENSION SCHEMES OFFICE
SYNOPSIS OF UPDATES

On 30 May 1996 the Pension Schemes Office (PSO) issued two further Updates to all practitioners on the PSO Mailing List.

PSO Update No. 16 covers two topics:-

REVISED MAXIMUM FUNDING REQUIREMENTS FOR SMALL SELF-ADMINISTERED SCHEMES

Update No. 16 introduced with effect from 1 June 1996 new requirements for the funding of small self-administered schemes (SSASs). The revised requirements were introduced following consultation with the Government Actuary's Department and the Association of Pensioneer Trustees (APT), which represents SSAS practitioners. Known as "the SSAS 1996 Method" the requirements apply immediately to any SSAS set up on or after 1 June 1996. For SSASs set up before that date, there is a transitional period of five years by the end of which they must comply fully with the SSAS 1996 Method, although certain events would trigger its earlier application.

Full details of the new requirements were set out in an APT Guidance Note which is reproduced in full as an Annex to the Update.

SPECIAL CONTRIBUTIONS TO EXEMPT APPROVED SCHEMES: SPREADING OF TAX RELIEF

Update No. 16 also gave details of the new criteria for spreading tax relief on certain special contributions to exempt approved schemes, which took effect for chargeable periods ending on or after 1 June 1996.

Broadly these mean that if the aggregate special contributions made by an employer to a scheme exceed the other contributions by the employer to that scheme in the same chargeable period and amount to £500,000 or over, tax relief will be spread, normally on the following basis:

£500,000 or over but less than £1,000,000...............2 years
£1,000,000 or over but less than £2,000,000.............3 years
£2,000,000 or over......................................4 years

The aggregate special contributions will be apportioned equally over the period in question (pro-rata if a chargeable period is other than 12 months) and will not normally be reapportioned if further special contributions are made in the years covered by the spread. An exception to this latter rule is where during the period of the spread the employer ceases to trade or is taken over by another employer. In these circumstances any necessary reallocation will be made as set out in existing PSO practice.

Special contributions made in chargeable periods which ended on or before 31 May 1996 will not be subject to the new spreading rules and continue to be treated on the old basis as set out in PSO Practice Notes.

Where there is evidence of manipulation to reduce the period of spread the PSO reserve the right, under Section 592(6) Income and Corporation Taxes Act (ICTA) 1988, to determine the spread on some other basis.

PSO Update No. 17 is concerned with several topics:

Customer Service -- sets out some simple guidelines for PSO customers to help the Office maintain its current level of service. It gives guidance on how the PSO will deal with general enquiries and telephone calls and gives details of the availability in both paper and compact disk form of the PSO's internal guidance manual, the Pension Scheme Instructions (PSI).
Continued Rights -- amends definitions in Practice Notes on Approval of Occupational Pension Schemes, IR 12 (1991), relating to guidance on continued rights for scheme members where there has been a second or subsequent transfer to a new scheme.
Definition of "Dependant" -- gives a new definition of "Dependant" which clarifies existing PSO practice in a number of areas and incorporates supplementary advice regularly given by the PSO in response to enquiries.
Schemes at Interim Stage -- deals with the final phase in the programme to clear by 5 April 1997, all schemes which have been operating on interim scheme documentation for more than 2 years.
Transfer Payments to small self-administered schemes (SSASs) -- includes an Appendix which sets out the information needed by the PSO for each of five classes of transfer payment in order that a transfer request can be dealt with speedily.

Copies of PSO Updates can be obtained by writing to

PSO Supplies Section
Yorke House
PO Box 62
Castle Meadow Road
Nottingham
NG2 1BG

or by telephoning 0115-974 1670.

Copies of the Practice Notes on Approval of Occupational Pension Schemes, IR 12 (1991), may also be obtained from the above address at a cost of £10 for a paper version or £15 for a 3 1/2 inch PC compatible disk (ASCII format).

(Superceded by SA Manual)
REPAYMENT CLAIMS

Where a taxpayer wishes, he or she may authorise the Revenue to make a repayment to his or her agent. Agents should, however, be aware that a Revenue form containing such an authority does not impose a legally binding obligation on the Revenue and is a service to the taxpayer rather than creating obligations to the agent.

There have been a number of complaints recently from agents where the Revenue has failed to observe an authority on form R38 and the agent has subsequently had difficulty in obtaining payment of fees from a client. Among others, the Institute of Chartered Accountants of England & Wales has made representations to the Revenue to improve our procedure. The Revenue regrets such mistakes and is doing what it can to eliminate errors of this kind. However, it cannot accept responsibility for any financial or other loss incurred by an agent as a result of the failure. The form is for the convenience of taxpayers who may use it and may at any time, before a repayment is made, cancel it.

In a recent case, the Parliamentary Commissioner for Administration asked us to review the wording of the form to consider whether this should be made clear on the form itself. He told us that he appreciated that our review might result in no changes being made.

Following a review we have decided that the form, which is a simple one to help taxpayers, should remain as it is but that agents should be warned of the position through Tax Bulletin. The PCA is aware of our decision and the general content of this article.

! This Article Is No Longer Current (Deleted Index 2004)

TAX BULLETIN
CORRECTION TO ISSUE 23

The article entitled "Self Assessment Key Dates and Events -- November 1996 to February 1998" on page 315, 3rd column, top paragraph, unfortunately omitted a line at the start of the second sentence. The paragraph should have read as follows:

"To be sure that the Inland Revenue can calculate the tax due in time for taxpayers to pay it by 31 January, they must get their returns in by 30 September. If they fail to do so, we shall still calculate the tax for them but we cannot guarantee that this will be done before the filing and payment date. And that could mean that interest -- and perhaps surcharge -- will run on any sums unpaid."

The Editor apologises for any confusion or inconvenience caused.

INLAND REVENUE STATEMENTS OF PRACTICE AND
EXTRA-STATUTORY CONCESSIONS ISSUED BETWEEN
1 JUNE 1996 AND 31 JULY 1996.

EXTRA STATUTORY CONCESSION

Number    Title                                Date of Issue
D53       Section 50 Taxation of Chargeable          19/06/96
Gains Act 1992: Grants repaid.
D49       Capital Allowances Act 1990:               19/06/96
Grants repaid.
A62       Pensions to employees disabled at work     17/07/96 (revised)

There have been no statements of practice issued in this period.

You can get copies of SPs and ESCs from Christine Jordan at the Public Enquiry Room, Somerset House. Telephone 071-438 7772.

CONTENT

The content of Tax Bulletin gives the views of our technical specialists on particular issues. The information published is reported because it may be of interest to tax practitioners. Publication will be six times a year, and include a cumulative index on an annual basis.

You can expect that interpretations of the law contained in the Bulletin will normally be applied in relevant cases, but this is subject to a number of qualifications.
Particular cases may turn on their own facts, or context, and because every possible situation cannot be covered there may be circumstances in which the interpretation given here will
not apply.
There may also be circumstances in which the Board would find it necessary to argue for a different interpretation in appeal proceedings.
"Revenue decisions" report conclusions that were reached on the facts of individual cases, but do not necessarily include all the detailed facts which may have been relevant to the decision. They provide an indication of the approach the Revenue has adopted in the past, but have not been drafted as generally applicable statements of the Revenue's position. It cannot be assumed therefore, that interpretations of the law contained or implicit in these decisions will necessarily be applied in other cases.
The Bulletin does not replace formal Statements of Practice.
The Board's view of the law may change in the future. Readers will be notified of any changes in future editions.

Nothing in this Bulletin affects a taxpayer's right of appeal on any point.

Letters on any article appearing in Tax Bulletin should be sent to the Editor, David Richardson,
Room 402, 22 Kingsway, London WC2B 6NR. We are sorry though that neither he nor our contributors will normally be able to enter into correspondence about Tax Bulletin or its contents.

SUBSCRIPTION

The subscription for 1996 is £20. If you would like to subscribe to Tax Bulletin please send your name and address together with your cheque to Inland Revenue, Finance Division, Barrington Road, Worthing, West Sussex BN12 4XH. Cheques should be crossed and made payable to "Inland Revenue".

If you would like further information regarding Tax Bulletin please contact Ms Nahid Shariff,
Room 435, 22 Kingsway, London WC2B 6NR. Telephone: 020 7438 7842.

Tax Bulletin is covered by Crown Copyright. There is no objection to firms copying the Bulletin for their own use. Anyone wishing to republish Tax Bulletin or extracts more widely should write for permission to Ms Nahid Shariff, Room 435, 22 Kingsway, London WC2B 6NR.

TAX BULLETIN PROVIDED IN WEB READY FORMAT COURTESY OF TAX ANALYSTS AND TAXBASE

Tax Bulletin Issue 24

INLAND REVENUE TAX BULLETIN Issue 24

CONTENTS

PAYMENTS IN LIEU OF NOTICE

NATURE OF THE PAYMENT

EMOLUMENTS FROM THE EMPLOYMENT

CONTRACTUAL PILONS AND BREACH OF CONTRACT

SCOPE OF CONTRACTUAL ARRANGEMENTS

RESERVED RIGHTS AND DISCRETION

SECTION 49 EMPLOYMENT PROTECTION (CONSOLIDATION) ACT 1978

PAYMENT CONTEXT

SUMMARY

(Superceded by CG 60609 CG 60700-09) CAPITAL GAINS TAX: ROLL-OVER RELIEF AND SELF ASSESSMENT PROVISIONAL RELIEF

FORM OF DECLARATION

DURATION OF PROVISIONAL RELIEF

DECEASED PERSON

RECOVERY OF TAX

REINVESTMENT TIME LIMIT

! This Article Is No Longer Current (Deleted Index 2001)

COLLECTING AGENTS FOR FOREIGN DIVIDENDS -- DEDUCTION OF TAX

AN OUTLINE OF THE RULES

THE FIVE CATEGORIES OF COLLECTING AGENT

CATEGORY 1 -- ACTING AS CUSTODIAN

CATEGORY 2 -- COLLECTING DIVIDENDS BY MEANS OF COUPONS

CATEGORY 3 -- COLLECTING DIVIDENDS OTHERWISE THAN BY MEANS OF COUPONS

CATEGORY 4 -- BANKS SELLING COUPONS

CATEGORY 5 -- DEALERS PURCHASING COUPONS

CLEARING OF A CHEQUE OR ARRANGING FOR THE CLEARING OF A CHEQUE

STOCK DIVIDENDS, STOCK/CASH OPTIONS, RE-INVESTMENT SCHEMES

INTERACTION WITH THE RULES FOR PAYING AGENTS

THE E ARRANGEMENT

INTERACTION WITH SECTION 349 ICTA 1988

MORE THAN ONE COLLECTING AGENT FOR THE SAME FOREIGN DIVIDENDS

SCHEDULE E: CHANGES TO THE PAYE REGULATIONS FOR SELF ASSESSMENT

CHANGES BECAUSE FORMAL ASSESSMENTS WILL BE TOTAL INCOME SELF ASSESSMENTS RATHER THAN SCHEDULE E ASSESSMENTS

CHANGES BECAUSE OF THE CESSATION OF THE DIRECT COLLECTION AND ASSESSMENT ARRANGEMENTS

CHANGES RELATING TO APPEALS

CHANGES RELATING TO INTEREST ON TAX

SCHEDULE E: SUBSTITUTE FORMS P11D

BACKGROUND

LOCAL AUTHORISATION OF SUBSTITUTES

CENTRAL AUTHORISATION OF SUBSTITUTES

DEFINITION OF COPY OR NEAR COPY

CENTRALLY APPROVED SUBSTITUTES RETURNED TO TAX OFFICES

APPLYING FOR CENTRAL APPROVAL

TAX LAW REWRITE: THE WAY FORWARD AN INLAND REVENUE CONSULTATIVE DOCUMENT

BACKGROUND

THE REWRITE PROJECT

CONSULTATIVE DOCUMENT

DETAILS OF THE PROPOSALS

interpretations

CAPITAL GAINS TAX: VALUATIONS FOR CAPITAL GAINS TAX APPLYING GRAY V IRC [1994] STC 360

(Superceded by CT13700 onwards)

THE EXCHANGE GAINS AND LOSSES (ALTERNATIVE METHOD OF CALCULATION OF GAIN OR LOSS) (AMENDMENT) REGULATIONS 1996 (SI 1996/1347)

(Superseded by BIM45565 onwards)

SCHEDULE D CASES I AND II LOCUM AND FIXED COSTS INSURANCE POLICIES

SELF ASSESSMENT: EXTENDED TIME LIMITS FOR ASSESSMENT OF PARTNERSHIP PROFITS WHERE THERE HAS BEEN 'FRAUDULENT OR NEGLIGENT CONDUCT' IN CONNECTION WITH A PARTNERSHIP RETURN: SECTION 36(2) TMA 1970

miscellaneous

CORPORATION TAX PAY & FILE COMPUTATION OF TAX CHARGEABLE -- APPORTIONMENT OF PROFITS BETWEEN FINANCIAL YEARS

! This Article Is No Longer Current (Deleted Index 2004)

INHERITANCE TAX: ALLOWABLE DEDUCTIONS -- REPUBLICATION OF EXISTING CONCESSION

TEXT OF CONCESSION

INHERITANCE TAX (IHT): TREATMENT OF INCOME TAX IN CANADA ON CAPITAL GAINS DEEMED TO ARISE ON A PERSON'S DEATH

! This Article Is No Longer Current (Deleted Index 2001)

PENSION SCHEMES OFFICE SYNOPSIS OF UPDATES

REVISED MAXIMUM FUNDING REQUIREMENTS FOR SMALL SELF-ADMINISTERED SCHEMES

SPECIAL CONTRIBUTIONS TO EXEMPT APPROVED SCHEMES: SPREADING OF TAX RELIEF

(Superceded by SA Manual) REPAYMENT CLAIMS

! This Article Is No Longer Current (Deleted Index 2004)

TAX BULLETIN CORRECTION TO ISSUE 23

INLAND REVENUE STATEMENTS OF PRACTICE AND EXTRA-STATUTORY CONCESSIONS ISSUED BETWEEN 1 JUNE 1996 AND 31 JULY 1996.

CONTENT

INLAND REVENUE TAX BULLETIN
Issue 24

(Superceded by CG 60609 CG 60700-09)
CAPITAL GAINS TAX: ROLL-OVER RELIEF AND SELF ASSESSMENT PROVISIONAL RELIEF

COLLECTING AGENTS FOR FOREIGN
DIVIDENDS -- DEDUCTION OF TAX

SCHEDULE E:
CHANGES TO THE PAYE REGULATIONS
FOR SELF ASSESSMENT

SCHEDULE E:
SUBSTITUTE FORMS P11D

TAX LAW REWRITE:
THE WAY FORWARD AN INLAND REVENUE
CONSULTATIVE DOCUMENT

CAPITAL GAINS TAX:
VALUATIONS FOR CAPITAL GAINS TAX APPLYING
GRAY V IRC [1994] STC 360

THE EXCHANGE GAINS AND LOSSES
(ALTERNATIVE METHOD OF CALCULATION
OF GAIN OR LOSS) (AMENDMENT)
REGULATIONS 1996 (SI 1996/1347)

SCHEDULE D
CASES I AND II
LOCUM AND FIXED COSTS
INSURANCE POLICIES

SELF ASSESSMENT:
EXTENDED TIME LIMITS FOR
ASSESSMENT OF PARTNERSHIP PROFITS
WHERE THERE HAS BEEN 'FRAUDULENT
OR NEGLIGENT CONDUCT' IN CONNECTION
WITH A PARTNERSHIP RETURN:
SECTION 36(2) TMA 1970

CORPORATION TAX PAY & FILE
COMPUTATION OF TAX CHARGEABLE --
APPORTIONMENT OF PROFITS
BETWEEN FINANCIAL YEARS

INHERITANCE TAX:
ALLOWABLE DEDUCTIONS -- REPUBLICATION
OF EXISTING CONCESSION

PENSION SCHEMES OFFICE
SYNOPSIS OF UPDATES

(Superceded by SA Manual)
REPAYMENT CLAIMS

TAX BULLETIN
CORRECTION TO ISSUE 23

INLAND REVENUE STATEMENTS OF PRACTICE AND
EXTRA-STATUTORY CONCESSIONS ISSUED BETWEEN
1 JUNE 1996 AND 31 JULY 1996.