OpenLegislation

Finance Act 1986

1986 c. 41 · Enacted 25 July 1986 · Extends to United Kingdom

Not fully up to date. 2 changes made by later legislation have not yet been written into this text, which is revised to 1 April 2026.

See the changes not yet applied
ProvisionChangeMade by
s. 107(4)words substitutedFinance (No. 2) Act 2015 s. 15(1)(a)
s. 107(5)words substitutedFinance (No. 2) Act 2015 s. 15(1)(b)
An Act to grant certain duties, to alter other duties, and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with Finance.[25th July 1986]

X1I1X2Most Gracious Sovereign, WE, Your Majesty’s most dutiful and loyal subjects, the Commons of the United Kingdom in Parliament assembled, towards raising the necessary supplies to defray Your Majesty’s public expenses, and making an addition to the public revenue, have freely and voluntarily resolved to give and grant unto your Majesty the several duties hereinafter mentioned; and do therefore most humbly beseech Your Majesty that it may be enacted, and be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—C1C2

Contents

  1. Part I: Customs and Excise and Value Added Tax
  2. Chapter I: Customs and Excise
  3. The rates of duty
  4. 1Tobacco products.
  5. 2Hydrocarbon oil.
  6. 3Vehicles excise duty.
  7. Other provisions
  8. 4Beer duty: minor amendments.
  9. 5Warehousing regulations.
  10. 6Betting duties and bingo duty in Northern Ireland.
  11. 7Betting and gaming duties: evidence by certificate, etc.
  12. 8Licences under the customs and excise Acts.
  13. Chapter II: Value Added Tax
  14. 9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repealed
  15. 10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repealed
  16. 11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repealed
  17. 12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repealed
  18. 13. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repealed
  19. 14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repealed
  20. 15. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repealed
  21. Part II: Income Tax, Corporation Tax and Capital Gains Tax
  22. Chapter I: General
  23. Tax rates and main reliefs
  24. 16. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repealed
  25. 23Employee share schemes: general amendments. Repealed
  26. 24Approved profit sharing schemes: workers’ co-operatives.
  27. 25. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repealed
  28. 33. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repealed
  29. Foreign element: expenses
  30. 34. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repealed
  31. Chapter II: Capital Allowances
  32. 55. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repealed
  33. Chapter III: CAPITAL GAINS
  34. 58. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repealed
  35. 59. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repealed
  36. 60. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repealed
  37. Chapter IV: Securities
  38. 61. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repealed
  39. Part III: STAMP DUTY
  40. Securities
  41. 64. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repealed
  42. 65. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repealed
  43. 66Company's purchase of own shares
  44. Depositary receipts
  45. 67Depositary receipts 1.5% charge
  46. 68Depositary receipts: notification
  47. 69Depositary receipts: supplementary
  48. Clearance services
  49. 70Clearance services 1.5% charge
  50. 71Clearance services: notification
  51. 72Clearance services: supplementary
  52. Meaning of “exempt capital-raising instrument” and “exempt listing instrument”
  53. 72ZAMeaning of “exempt capital-raising instrument”
  54. 72ZBMeaning of “exempt listing instrument”
  55. Transfers between depositary receipt system and clearance system
  56. 72ATransfers between depositary receipt system and clearance system.
  57. Reconstructions and acquistions
  58. 73. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repealed
  59. 74Reconstructions etc: repeals.
  60. 75Acquisitions: reliefs.
  61. 76Acquisitions: further provisions about reliefs. Repealed
  62. 77Acquisition of target company's share capital
  63. 77ADisqualifying arrangements
  64. Loan capital, letters of allotment etc.
  65. 78Loan capital.
  66. 79Loan capital: new provisions.
  67. 80. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repealed
  68. 80ASales to intermediaries.
  69. 80BIntermediaries: supplementary.
  70. 80CRepurchases and stock lending.
  71. 80DRepurchases and stock lending: replacement stock on insolvency
  72. 81. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repealed
  73. 82. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repealed
  74. 83. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repealed
  75. 84Miscellaneous exemptions
  76. 85Supplementary
  77. Resolution of financial institutions
  78. 85AResolution of financial institutions
  79. Part IV: Stamp Duty Reserve Tax
  80. Introduction
  81. 86The tax: introduction
  82. The principal charge
  83. 87The principal charge
  84. 88Special cases.
  85. 88ASection 87: exceptions for intermediaries.
  86. 88BIntermediaries: supplementary.
  87. 89Section 87: exceptions for market makers etc. Repealed
  88. 89ASection 87: exceptions for public issues.
  89. 89AASection 87: exception for repurchases and stock lending.
  90. 89ABSection 87: exception for repurchases and stock lending in case of insolvency
  91. 89BSection 87: exceptions for stock lending and collateral security arrangements.
  92. 89CSection 87: UK listing relief
  93. 90Section 87: other exceptions
  94. 91Liability to tax
  95. 92Repayment or cancellation of tax
  96. Other charges : depositary receipts
  97. 93Depositary receipts : 1.5% charge
  98. 94Depositary receipts: supplementary
  99. 95Depositary receipts: exceptions
  100. 95ADepositary receipts: exception for replacement securities.
  101. Other charges: clearance services
  102. 96Clearance services : 1.5% charge
  103. 97Clearance services: exceptions
  104. 97ZAClearance services: exception for replacement securities.
  105. 97AClearance services: election for alternative system of charge.
  106. Depositary receipts and clearance services: further exceptions
  107. 97ABExempt capital-raising transfers
  108. 97ACExempt listing transfers
  109. 97ADException for transfers of shares held by issuing company
  110. 97BTransfer between depositary receipt system and clearance system.
  111. 97CTransfers to non-EU depositary receipt and clearance services systems Repealed
  112. General
  113. 98Administration etc.
  114. 99Interpretation
  115. 99ASection 99(4B): “listed” and “recognised growth market”
  116. Part V: INHERITANCE TAX
  117. 100Capital transfer tax to be known as inheritance tax.
  118. 101Lifetime transfers potentially exempt etc.
  119. 102Gifts with reservation.
  120. 102ZAGifts with reservation: termination of interests in possession
  121. 102AGifts with reservation: interest in land.
  122. 102BGifts with reservation: share of interest in land.
  123. 102CSections 102A and 102B: supplemental.
  124. 103Treatment of certain debts and incumbrances.
  125. 104Regulations for avoiding double charges etc.
  126. 105Application of business and agricultural relief where transfer partly exempt.
  127. 106Changes in financial institutions business property.
  128. 107Changes in financial institutions: interest.
  129. Part VI: OIL TAXATION
  130. 108The on-shore/off-shore boundary.
  131. 109Alternative valuation of light gases.
  132. 110Attribution of certain receipts and expenditure between oil fields.
  133. Part VII: Miscellaneous and Supplementary
  134. 111Broadcasting: additional payments by programme contractors.
  135. 112Limit for local loans.
  136. 113“Securities” for purposes of Exchange Equalisation Account Act 1979.
  137. 114Short title, interpretation, construction and repeals.
  138. Schedule 1
  139. IProvision Substituted for Part II of Schedule 2 to the Acts of 1971 and 1972
  140. Part II: Tables Substituted in Part II of Schedule 4 to the Acts of 1971 and 1972
  141. Table A(1)Rates of Duty on Rigid Goods Vehicles Exceeding 12 Tonnes Plated Gross Weight
  142. Table C(1)Rates of duty on Tractor Units Exceeding 12 Tonnes Plated Train Weight and Having Only 2 Axles
  143. Table D(1)Rates of duty on Tractor Units Exceeding 12 Tonnes Plated Train Weight and Having Three or More Axles
  144. Schedule 2: Vehicles Excise Duty: Miscellaneous Amendments
  145. Part I
  146. Additional days to be included in duration of certain licences
  147. 1Paragraph 1
  148. Tower wagons used by street lighting authorities etc.
  149. 2Paragraph 2
  150. Visiting forces
  151. 3Paragraph 3
  152. Trade licences
  153. 4Paragraph 4
  154. Surrender of licences
  155. 5Paragraph 5
  156. Removal of fee for duplicate registration document
  157. 6Paragraph 6
  158. Part II
  159. Additional days to be included in duration of certain licences
  160. 7Paragraph 7 Repealed
  161. Tower wagons used by street lighting authorities etc.
  162. 8Paragraph 8 Repealed
  163. Trade licences
  164. 9Paragraph 9 Repealed
  165. Surrender of licences
  166. 10Paragraph 10 Repealed
  167. Removal of fee for duplicate registration document
  168. 11Paragraph 11 Repealed
  169. Schedule 3: Warehousing Regulations
  170. 1Paragraph 1
  171. 2Paragraph 2 Repealed
  172. 3Paragraph 3
  173. 4Paragraph 4
  174. 5Paragraph 5
  175. 6Paragraph 6 Repealed
  176. 7Paragraph 7
  177. 8Paragraph 8
  178. Schedule 4: Extension to Northern Ireland of Provisions of Betting and Gaming Duties Act 1981
  179. Part I: Amendments of the Betting and Gaming Duties Act 1981
  180. General betting duty and pool betting duty
  181. 1Paragraph 1
  182. 2Paragraph 2
  183. 3Paragraph 3
  184. 4Paragraph 4
  185. Bingo duty
  186. 5Paragraph 5
  187. 6Paragraph 6
  188. 7Paragraph 7
  189. General
  190. 8Paragraph 8 Repealed
  191. 9Paragraph 9 Repealed
  192. 10Paragraph 10
  193. Administration of betting duties
  194. 11Paragraph 11
  195. Exemptions from, and administration of, bingo duty
  196. 12Paragraph 12
  197. Part II: Consequential Amendments of Northern Ireland Legislation
  198. 13Paragraph 13
  199. 14Paragraph 14
  200. 15Paragraph 15
  201. Part III: Subordinate Legislation
  202. 16Paragraph 16
  203. Schedule 5: Licences Under the Customs and Excise Acts
  204. General provisions as to payment of duty on excise licences
  205. 1Paragraph 1
  206. 2Paragraph 2
  207. Licences to manufacture spirits
  208. 3Paragraph 3
  209. Licences relating to hydrocarbon oil etc.
  210. 4Paragraph 4
  211. Licences to manufacture mechanical lighters
  212. 5Paragraph 5 Repealed
  213. Schedule 6
  214. 1Paragraph 1
  215. 2Paragraph 2
  216. 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repealed
  217. 4Paragraph 4
  218. 5Paragraph 5
  219. 6Paragraph 6
  220. Schedule S 7, 8. . . . . . . . . . . . . . . . . . . . . .
  221. Schedule 9: Business Expansion Scheme
  222. Part I
  223. 1Paragraph 1 Repealed
  224. Part II: Consequential Amendments
  225. 22Paragraph 22
  226. 23Paragraph 23 Repealed
  227. Schedule S 10–12. . . . . . . . . . . . . . . . . . . . . .
  228. Schedule S 13–:16. . . . . . . . . . . . . . . . . . . . .
  229. Schedule 17. . . . . . . . . . . . . . . . . . . . . . . .
  230. Schedule 18: Securities: Other Provisions
  231. Sale and re-purchase of securities
  232. 1Paragraph 1 Repealed
  233. Information
  234. 7Paragraph 7 Repealed
  235. 8Paragraph 8
  236. Miscellaneous
  237. 9Paragraph 9 Repealed
  238. General
  239. 10Paragraph 10
  240. Schedule 19: INHERITANCE TAX
  241. Part I: AMENDMENTS OF 1984 ACT
  242. 1Paragraph 1
  243. 2Paragraph 2
  244. 3Paragraph 3
  245. 4Paragraph 4
  246. 5Paragraph 5
  247. 6Paragraph 6
  248. 7Paragraph 7
  249. 8Paragraph 8
  250. 9Paragraph 9
  251. 10Paragraph 10
  252. 11Paragraph 11
  253. 12Paragraph 12
  254. 13Paragraph 13
  255. 14Paragraph 14
  256. 15Paragraph 15
  257. 16Paragraph 16
  258. 17Paragraph 17
  259. 18Paragraph 18
  260. 19Paragraph 19
  261. 20Paragraph 20
  262. 21Paragraph 21
  263. 22Paragraph 22
  264. 23Paragraph 23
  265. 24Paragraph 24
  266. 25Paragraph 25
  267. 26Paragraph 26
  268. 27Paragraph 27
  269. 28Paragraph 28
  270. 29Paragraph 29
  271. 30Paragraph 30
  272. 31Paragraph 31
  273. 32Paragraph 32
  274. 33Paragraph 33
  275. 34Paragraph 34
  276. 35Paragraph 35
  277. 36Paragraph 36
  278. 37Paragraph 37
  279. 38Paragraph 38
  280. 39Paragraph 39
  281. Part II: TRANSITIONAL PROVISIONS
  282. 40Paragraph 40
  283. 41Paragraph 41
  284. 42Paragraph 42
  285. 43Paragraph 43
  286. 44Paragraph 44
  287. 45Paragraph 45
  288. 46Paragraph 46
  289. Schedule 20: GIFTS WITH RESERVATION
  290. Interpretation and application
  291. 1Paragraph 1
  292. 2Paragraph 2
  293. 3Paragraph 3
  294. Donee predeceasing the material date
  295. 4Paragraph 4
  296. Termination of interests in possession
  297. 4AParagraph 4A
  298. Settled gifts
  299. 5Paragraph 5
  300. Exclusion of benefit
  301. 6Paragraph 6
  302. 7Paragraph 7
  303. Agricultural property and business property
  304. 8Paragraph 8
  305. Schedule 21: Modifications of Finance Act 1982, Schedule 18 in Relation to Elections Under Section 109 of this Act
  306. General modifications
  307. 1Paragraph 1
  308. Specific modifications
  309. 2Paragraph 2
  310. 3Paragraph 3
  311. 4Paragraph 4
  312. 5Paragraph 5
  313. 6Paragraph 6
  314. 7Paragraph 7
  315. 8Paragraph 8
  316. 9Paragraph 9
  317. 10Paragraph 10
  318. 11Paragraph 11
  319. Schedule 22: Broadcasting: Additional Payments by Programme Contractors
  320. Part I: Amendment of Broadcasting Act 1981
  321. 1Paragraph 1 Repealed
  322. 2Paragraph 2
  323. 3Paragraph 3
  324. 4Paragraph 4 Repealed
  325. Part II: Transitional Provisions
  326. 9Paragraph 9
  327. 10Paragraph 10
  328. Schedule 23: Repeals
  329. ICustoms and Excise: Miscellaneous
  330. IIVehicles Excise Duty
  331. IIIBetting and Gaming Duties
  332. Paragraph
  333. IVLicences Under the Customs and Excise Acts
  334. VIncome Tax and Corporation Tax: General
  335. 1Paragraph 1
  336. 2Paragraph 2
  337. 3Paragraph 3
  338. 4Paragraph 4
  339. 5Paragraph 5
  340. 6Paragraph 6
  341. 7Paragraph 7
  342. 8Paragraph 8
  343. VIIncome Tax and Corporation Tax: Capital Allowances
  344. 1Paragraph 1
  345. 2Paragraph 2
  346. VIICapital Gains
  347. VIIISecurities
  348. IXStamp Duty
  349. 1Paragraph 1
  350. 2Paragraph 2
  351. 3Paragraph 3
  352. XInheritance Tax
  353. 1Paragraph 1
  354. 2Paragraph 2
  355. XIBroadcasting: Additional Payments by Programme Contractors